The Central Bank of the Russian Federation

participant-recipient’s account with the Bank of Russia’s servicing institution

during operational day with the same calendar date as the date on which

the payment was processed via the BESP system.

Payment carried out through BESP system is considered irrevocable

from the moment when funds were debited from the bank account of BESP

system participant–payer with the institution of the Bank of Russia and final

from the moment when funds were credited to the bank account of BESP

system participant - recipient with the institution of the Bank of Russia,

accompanied by sending corresponding electronic service information

messages to BESP system participant-payer and BESP system participantrecipient.

The BESP system can settle a payment to its full value only; partial

settlement of payments is not allowed.

Settlements in the BESP system are effected using funds in the

participants’ bank accounts, including the correspondent accounts (sub

accounts) of credit institutions and their branches, which are opened with

the Bank of Russia territorial institutions, in view of the limit set on intraday

and overnight credit, and through which payments are effected in the Bank

of Russia payment system (including VER and MER) in accordance with

banking (correspondent) account (sub account) agreement.

Liquidity of the direct settlement participants in BESP system is

determined within the amount of funds in the correspondent account (sub

account) of direct settlement participant with the servicing institution of the

Bank of Russia, taking into consideration the limit of intraday credit and

overnight credit set by the Bank of Russia to the correspondent account

(sub account) of direct settlement participant in the servicing institution of

the Bank of Russia, taking into consideration restrictions related to

disposition of funds (sequestration of funds, and other restrictions).

There are several different kinds of payments in the BESP system:

regular payments, time-critical payments (express payments), which have

the highest priority, and limit payments, that is, the regular payments whose

effectuation requires the maintenance of the bilateral or multilateral limit set

by the participant - payer.

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The BESP system enables direct settlement participants to use in real

time the mechanism of liquidity management and monitoring and intraday

queue management procedures and receive information including:

− the amount of funds in the direct settlement participant’s

correspondent account (sub account) with the Bank of Russia service

institution and liquidity for the direct settlement participant making

settlements within the BESP system,

− the intraday and overnight credit limit set by the Bank of Russia for

direct settlement participant’s corresponding account (sub account)

and its use,

− the amount of expected incoming payments from other participants in

the BESP system and other information.

The management and monitoring of the BESP system in the Bank of

Russia is the responsibility of the Control and Monitoring Centre, a division

of the Bank of Russia Payment System Regulation, Management and

Monitoring Department.

The BESP system operating rules and settlement procedures as well

as regulation of relations between the Bank of Russia and BESP

participants are expounded in Bank of Russia Regulation No. 303-P, dated

April 25, 2007, ‘On the Bank of Russia Real Time Gross Settlement

System,’ Bank of Russia Ordinance No. 1822-U, dated April 25, 2007, ‘On

the Procedure for Passing Payments and Effectuating Settlements in the

Bank of Russia Real Time Gross Settlement System,’ and some other Bank

of Russia regulatory documents, which are published in the Bank of Russia

Bulletin and posted on the Bank of Russia’s web-site in the Internet.

The functions of the BESP system described above will allow the

participants:

- to increase economic gain from the acceleration of the funds turnover

because of the carrying out of settlements in real time throughout the

country;

- to receive equal access to the system services and processing of

payments regardless of the participant’s location inside the country;

- to achieve a more fast finalisation of a payment with a lower amount of

liquidity and thus reduce the possibility of unforeseen risk in the

settlement process;

- to use advanced liquidity management facilities in real time for the

purpose of ensuring the optimal distribution of liquidity during the

operational day, consolidating resources and efficiently monitoring a

participant’s liquidity;

- to reduce credit and settlement risk while making transactions on the

securities and foreign exchange market, using the ‘delivery versus

payment’ and ‘payment versus payment’ models;

- to share information with the system in real time and use on this basis

more flexible settlement control and management mechanisms;

- in addition, multi-branch credit institutions will be able to receive

information from the system from the point of view of the branches

participating in it.

4

The Bank of Russia has set differentiated rates for its services in the

BESP system, taking into consideration that direct and associated

settlement participants are entitled to different services and that the carrying

out of immediate and ordinary payments for a direct settlement participant

involves different expenses for the Bank of Russia. The Bank of Russia has

also introduced rates for a number of information services in the BESP

system. The price of an immediate payment for a direct settlement

participant is 30 rubles and the price of a regular payment is 25 rubles; the

price of an regular payment for an associated settlement participant is 20

rubles. The price of one fulfilment of liquidity inquiry and/or balances of

funds inquiry is 10 rubles and the price of fulfilment of one inquiry for other

services is 7 rubles.

Following international practice, to encourage its customers to

participate in BESP system and according to the number of payments, the

Bank of Russia has introduced a discount system.

To qualify for participation in the BESP system, a credit institution or

its branch should meet the following requirements:

- have a correspondent account (sub account) with the Bank of Russia

service institution;

- comply with the Bank of Russia reserve requirements;

- not to have delayed liabilities to the Bank of Russia;

- not to have delayed debt on payment for Bank of Russia settlement

services;

- not to have unpaid settlement documents to the bank (correspondent)

account (sub account) with the Bank of Russia service institution;

- participate in the exchange of electronic documents with the Bank of

Russia;

- comply with the technical requirements for the electronic messages

exchange and information security requirements.

To initiate the procedure of joining the BESP system, a credit

institution or its branch submits to the Bank of Russia service institution a

request to participate it to the BESP system as a direct or associated

settlement participant.

The Bank of Russia service institution notifies the credit institution or

its branch about the Bank of Russia’s consent or refusal to admit it to BESP

no later than 15 business days after the receipt of the request.

After it has received the Bank of Russia’s consent to joint the BESP

system as a direct settlement participant, a credit institution or its branch:

- make sure that it has the qualified staff to handle the hardware and

software designed for carrying out payments via the BESP system;

- ensures the use of the cryptographic information security devices

installed by the Bank of Russia to exchange electronic messages with

the BESP system;

- runs the procedure for testing the hardware, software and exchange of

electronic messages with BESP.

After it has received the Bank of Russia’s consent to admit it to BESP

as an associated settlement participant, a credit institution or its branch:

5

- makes sure that it has the qualified staff to handle the hardware and

software designed for carrying out payments via the BESP system;

- runs the procedure for testing the hardware, software and exchange of

electronic messages with the Bank of Russia payment system at the

level of the Bank of Russia’s regional branch to carry out payments

through the BESP system.

Based on the results of the work done, the Bank of Russia no later

than 10 operational days takes a decision whether the credit institution or its

branch is ready or not to participate in the BESP system as a direct or

associated settlement participant.

Processing of payments in the BESP system has started on

December 21, 2007.