Comments on registrar ratings based on performance in the 1st half of 2005

The Professional Association of Registrars, Transfer Agents and Depositories (PARTAD) presented a national registrar rating based on performance in the 1st half of 2005 as well as registrar ratings and rankings based on performance in quarters 1 and 2, 2005.

The registrar rating based on performance in the 1st half of 2005 was developed using registrar ratings based on performance in quarters 1 and 2, 2005, which, in their turn, were developed using information submitted by registrars to PARTAD Registrars of Russia information database. Registrar's total score (and, accordingly, place) was calculated in the rating based on performance in the 1st half of 2005 as an average over its quarterly rating scores.

The national registrar rating based on performance in the 1st half of 2005 includes 50 registrars from those included in ratings based on performance in quarters 1 and 2, 2005. The rating based on performance in the 1st half of 2005 includes non-PARTAD members that submitted necessary information to PARTAD Registrars of Russia information database on a par with PARTAD member registrars.

The methods used to calculate ratings based on performance in quarters 1 and 2, 2005 took into consideration the proposal made by PARTAD Working Group for Risk Monitoring and Management to eliminate and replace irrelevant or interdependent indicators and to include new indicators characterizing registrar service quality on a stage-by-stage basis during 2005. The latter include quarterly rating indicators used in the 1st half of 2005 such as registrar staff qualification and registrar's conformity with the requirements of PARTAD Registrar Operation Standards.

Interdependent indicators connected, in particular, with a basic indicator such as number of ownership rights re-registrations are replaced or eliminated from the rating calculation method on a stage-by-stage basis, and the basic indicator weight is simultaneously increased to offset such replacement or elimination, in order to eliminate the "multiplicative" effect of "basic" indicator impact growing by a number of times through indicators depending on it. The rating point distribution is expected to become more uniform, and the gap between leaders and the main group of rating participants to decrease, as a result of such metod modifications.

To avoid double counting when rating issuers traded at stock exchanges that simultaneously passed the ADR issuance procedure, the relevant indicator weights were reduced on a stage-by-stage basis during the 1st half of 2005 to introduce professional securities market participant unified qualitative indicator taking into consideration the fact that the registrar has "traded" issuers (irrespective of their quantity) either ad domestic or foreign stock exchanges instead of keeping separate records of such indicators from quarter 3, 2005.

Changes were also made to the procedure used by settlement depository organizations (DKK, DRS, SPb RDTs and ROSBANK) to take into consideration expert valuations of the registrars included in the rating. So, from quarter I, 2005 on, the rating calculation method also takes into consideration the quantity of expert evaluations received by the registrar in addition registrar expert evaluation obtained using the double ranking mechanism, which undoubtedly makes this indicator more objective.

The number of nominee holders registered in the shareholder register keeping system as well as the use of electronic document circulation technologies by the registrar in accordance with PARTAD recommendations will be taken into consideration as a further novelty in the rating calculation method in the 2nd half of 2005.

Taking into consideration the changes made to the rating calculation methods used in quarters 1 and 2, 2005, the leading group (TOP 15) of the national rating based on performance in the 1st half of 2005 included the following registrars: Central Moscow Depository open joint-stock company, National Registration Company closed joint-stock company, Register open joint-stock company, NIKoil Registrar open joint-stock company, Irkol closed joint-stock company, and Registrar-Sviaz closed joint-stock company, RK-REGISTER closed joint-stock company, SR-DRAGA closed joint-stock company, and SR AVISTA open joint-stock company (Moscow), Siberian/Urals Registration Center closed joint-stock company (Yekaterinburg), Stock Capital open joint-stock company (Almetievsk), Unified Registrar closed joint-stock company (Saint Petersburg), Tsentralnaya Registratura open joint-stock company (Ufa), Intrako Registrar closed joint-stock company (Perm), and PARTNER closed joint-stock company (Cherepovets).

The following rankings (TOP 15) of largest registrars based on performance in quarters 1 and 2, 2005 were presented in addition to the national registrar rating based on performance in the 1st half of 2005:

• TOP 15 registrars ranked by own capital, led by NIKoil Registrar open joint-stock company (RUR263,421,000 at 31.03.2005) and National Registration Company closed joint-stock company (RUR288,866,000 at 30.06.2005)
• TOP 15 registrars ranked by own capital + insurance cover, led by National Registration Company closed joint-stock company (RUR396,219,000 at 31.03.2005 and RUR432,226,500 at 30.06.2005)
• TOP 15 registrars ranked by the number of registered issuers having more than 500 holders, led by Central Moscow Depository open joint-stock company (234 and 259 issuers, respectively)