Russia's SPB Exchange enters custody agreement with BNY Mellon before IPO

MOSCOW (Reuters) - Russia’s second-largest bourse, SPB Exchange, which plans to apply for a U.S. listing in the first half of 2022, said on Thursday it had entered into a global custody agreement with Bank of New York Mellon Corp.

SPB, which specialises in listing foreign securities, hopes to raise $150 million in an initial public offering on its own platform this year ahead of a larger U.S. listing, people familiar with the matter told Reuters earlier this month.

The exchange confirmed its listing plans on Monday and said it intends to use net proceeds from the IPO for general corporate purposes, including the increase of capital of its key operating subsidiaries, Best Efforts Bank (SPB Bank) and MFB Clearing Center (SPB Clearing).

On Thursday, SPB said in a statement that BNY Mellon had agreed to begin providing custody services for Best Efforts Bank on Sept. 27, with the agreement covering services including asset servicing, securities, transaction processing and settlement.

Procedures related to activating accounts were completed on Oct. 8, SPB said.

It said the agreement would significantly improve the reliability of settlements and safe-keeping of securities of foreign issuers, as well as provide faster access to investment instruments from new jurisdictions for investors on the bourse.

The exchange, which saw a surge in volumes during the COVID-19 pandemic, intends to register new and existing shares in the form of American Depository Shares in the United States as part of a subsequent offering, aimed at listing on the Nasdaq Global Select Market.

SPB, which was previously known as Saint-Petersburg Exchange before a rebranding this summer, said in July it was planning a public offering of additional shares to double its registered capital.

Reporting by Andrey Ostroukh, Writing by Alexander Marrow; Editing by Emelia Sithole-Matarise