Russia's finance ministry and central bank want to extend the financial recovery mechanism used for banks, pension funds and insurance companies to also cover the country's central depository and central counterparties, Kommersant reported.

Under the proposal, which is included in draft legislation on the financial recovery system for non-state pension funds, the central bank would launch a financial recovery procedure in central counterparties and the central depository in the event of a threat to the financial stability of these organizations or the stability of the financial market, according to the Jan. 16 report.

The regulator would also be allowed to set conditions under which it would become shareholder in the bailed-out organizations. In addition, its employees would have the right to participate in the management bodies of the central depository, the newspaper noted.

The rescue mechanism was developed to unify Russian legislation with international standards related to the resolution of central counterparties and central depositories in order to ensure the continuity of their work as key infrastructure organizations of the financial market, the central bank was cited as saying.

At the moment, the status of the central depository in Russia is held by National Settlement Depository, which is part of PJSC Moscow Exchange MICEX-RTS Group. There are also three central counterparties: Non-banking credit institution - Central Counterparty National Clearing Center, Open Joint Stock company Clearing Centre MFB and Settlement Depository Company SDCO, Kommersant noted.