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FINANCIAL CENTRES OF THE WORLD 2021: FOCUS ON

Evgeny Dridze, Deputy Head, Department Of Foreign Economic & International Relations For The City Of Moscow

Webinar 18 May 2021, 10:00 BST A Word From Today’s Chairman

Ian Harris Director Z/Yen Group 2 FS Club

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• 10:00 – 10:05 Chairman’s Introduction • 10:05 – 10:25 Focus On Moscow • 10:25 – 10:30 An External View • 10:30 – 10:45 Questions, Answers & Observations

4 Today’s Speaker

Evgeny Dridze Deputy Head Department Of Foreign Economic & International Relations For The City Of Moscow

5 Moscow International Financial Centre

Moscow 2021 6 Moscow International Financial Centre Stable positions MIFC in numbers in international rankings

Moscow is a gateway to the neighbouring markets with over 280 million consumers. 1st place 6th place In United Nations In the European Cities and E-Government Regions of the Future ranking: Survey 2018 Financial Times / FDI Intelligence > $250 bn GRP > $180 bn $236 bn

(Moscow is among the world’s annual consumer spending (3rd in total accumulated Top-10 by Gross place among European cities) foreign direct investment 5th place 18th place Regional Product (GRP) (as of October 1, 2020). In the quality of life ranking: In Global Cities Index Investment grew World’s Best Cities AT Kearney 2,1 times in 8 years

11m people > $4,9 bn > 400 Quality investment and business - reserve pool of local total market capitalization R&D and CIS headquarters professionals * of companies listed on MSE of global corporations climate:

28th place Doing business % % *economically active population 123th place per sqm in the Moscow metropolitan Since 2010, * has $394 17 -25 area - attraction centre for qualified workforce from other gone up 95 places to 28st Average rental for Class A reduction in the overall tax Russian regions and CIS place in the World Bank’s countries office burden 2010 2019c Doing Business Ranking. 7 Moscow International Financial Centre Russian Economy Rebounding Intensively From Covid Slump

Real GDP growth dynamics (YoY, %)

5 4.3 4 3.7 3.5 4 3 2.5 3 1.8 1.8 1.3 2 0.7 0.3 1 0 -1 -2 -2 -3 -3 -4 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’23

Public debt. % International reserves Total value of assets Capitalization of the Russian of GDP of Russia have increased of Russian banking system Stock Market has grown more more than 45 times has risen 25 times then 15 times

2019 2019 2019 2019 1c4% $550c bn $1.498c bn $617c bn

x 5 1999 x 45 1999 x 25 1999 x 15 1999 92.1c % $12c bn $59c bn $40c bn

8 Moscow International Financial Centre Macrofinance: solid fiscal and external positions

Current account surplus amounted to USD 34 bn in 2020 Strong fiscal position: budget consolidation and fiscal rule

12.0 120 113 104 Russian Federal Budget Balance, % of GDP, Ihs 97 100 8.0 Urals, $ / bbl, rhs

80 72 71 68 4.0 2.6 67 65 1.8 58 0.4 60 50 - 40 33 33 34 -0.2 -0.8 -0.7 -1.3 24 -4.0 -2.8 20 -3.9 -3.9 -4.3 -6.0 -8.0 0 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ‘09 ’10 ‘11 ’12 ‘13 ’14 ‘15 ’16 ‘17 ’18 ‘19 ’20

Significant international reserves assuring financial stability Sovereign debt to GDP lowest in both EM and DM spaces

Developed countries Emerging countries Russia 800 120% 104% 700 98% 100% 583.4 600 80%

500 463.7 60% 52% 400 38% 40% 300 14% 20% 8% 200 0%

‘09 ’10 ‘11 ’12 ‘13 ’14 ‘15 ’16 ‘17 ’18 ‘19

03.16 06.20 09.13 12.13 03.14 06.14 09.14 12.14 03.15 06.15 09.15 12.15 06.16 09.16 12.16 03.17 06.17 09.17 12.17 03.18 06.18 09.18 12.18 03.19 06.19 09.19 12.19 03.20 09.20 06.13 9 Moscow International Financial Centre Moscow in rankings: overview

c Moscow top 3 top 5 top 10 in rankings

Moscow occupies high positions in more than Most effective transport systems, Best cities, according Startup ecosystems, according 30 international rankings in various fields: according to Kantar to Resonance Consultancy to StartupBlink

c Positive top 10 12 position top 20 trends In 2020, Moscow improved or retained its high Cities with mostly developed Most economically influential cities in the Tech cities of the future, according positions in 21 rankings and took a high position e-services, according to the UN world, according to CeoWorld Magazine to fDi in 4 rankings published for the first time, including:

c Moscow economic 6 nominatio +27 +4 positions achievements ns positions 9 Moscow's achievements in the field of economic In the fDi’s Global Free Zones From 2017 to 2020, Moscow climbed In 2019, Moscow climbed 49 positions development are confirmed by leading of the Year 27 places in the Z/Yen Global Financial in the LaSalle’s European Regional international rankings: Centres Index Economic Growth Index

10 Moscow International Financial Centre Moscow in GFCI ranking

Moscow takes the lead in Eastern & Central Asia. Since 2020 Moscow rose five places in the rankings.

Moscow is one of the world’s largest business and financial centres. It is a global running a large-scale programme of urban infrastructure development and offering a wide range of opportunities for investors from around the world.

700 100 611 610 615 606 591 601 600 581 585 579 571 90 600 506 80

500 70

60 400 50 300 40

200 30

20 100 10 68 61 64 65 73 75 67 89 83 71 62 57 0 0 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21

11 Moscow International Financial Centre International cooperation

Bank of Russia cooperates with international financial institutions, regulators and associations

Multilateral cooperation

Financial market authorities Regional financial integration

12 International cooperation: World Alliance of International Financial Centers (WAIFC)

In July 2018 the World Alliance of International Financial Centers (WAIFC) was formed under the initiative of Moscow by founding members from Abu Dhabi, Brussels, Busan, Casablanca, Frankfurt, Luxembourg, Moscow, Muscat, Nur-Sultan, , and Toronto.

Brussels

Moscow Frankfurt Nur-Sultan Stuttgart Toronto Paris Luxembourg

Malta Busan Tokyo

Casablanca Doha Dubai

Muscat Hong Kong Abu Dhabi

Kigali

Mauritius

WAIFC is a non-profit association registered in Brussels, Belgium, which represents leading international financial centers and facilitates cooperation and the exchange of best practices. Today there are 19 WAIFC members, including representatives from Doha, Dubai, Hong Kong, Kigali, London, Mauritius, Stuttgart, and Tokyo. Member Observer 13 Moscow International Financial Centre

The importance of developing Moscow as an international financial center was formulated in 2008. 2010 The high-level working group was created, with a view to establish an international financial center in the Russian Federation (MIFC Taskforce), which formed an ambitious and comprehensive plan for reforms in the financial market.

The following reforms carried out:

Activating local investors Regulation and protecting investors

Market and payment Corporate law infrastructure

Corporate governance Sustainable finance

14 Moscow International Financial Centre Financial Market Development Strategy

The Bank of Russia Guidelines for the Development of the Russian Financial Market in 2019 – 2021 cover the following key areas and activities:

Building reliable Improving financial Developing Ensuring financial inclusion and market financial environment availability of capital competitiveness stability

◉ Involvement of financial consumer ◉ Introduction of individual pension ◉ Implementation of integrated road ◉ Control for the population ombudsmen capital accounts Introduction of map for developing competition in indebtedness and prevention of in disputes resolution “green” bonds various sectors of Russian economy excessive risk accumulation in the approved by the Government segment ◉ Increase of personal responsibility ◉ Crowdfunding of management ◉ Building biometric database ◉ Risk-based approach to insurance ◉ Introduction of new rules for market participants ◉ Limited employment opportunities crediting private-public partnerships ◉ Credit history bureau reform in financial sector for malicious ◉ Widening the list of financial (unscrupulous) people ◉ Development of concession projects ◉ Marketplace project launch non-credit institutions subject to stress testing ◉ Development of qualified investor ◉ Marketplace project launch ◉ Faster payment system in force institute ◉ Improving the toolkit for ◉ Introduction of financial services ◉ Testing of digital identification macroprudential stress testing ◉ Increase of responsibility access points map ◉ platform for substandard sale of financial products ◉ Development of remote identification ◉ “Regulatory sandbox” project and unified biometric system development ◉ Unified financial transactions register ◉ Development of electronic insurance ◉ Bank of Russia’s withdrawal from services distribution channels the capital of banks undergoing resolution after their financial ◉ Improving insurance services rehabilitation inclusion in Russian regions 15 Moscow exchange MSE position among world exchanges

Value Indicator Position Competitors (bln. USD)

BME, Spain Bond trading 44c 800 1c 460 8c 800 000 02 3 403 SE, South Africa Legal entities Professional Individuals traders Derivative Korea Exchange, South Korea exchanges 09 2 120 Futures Exchange, Key projects 2020 China

Major markets Financial Balance Capitalization SGX, Singapore development platform management 14 4.9 TMX Group, Canada ◉ Evening trading session ◉ automatic exchange ◉ MOEX Treasury on the stock market of financial messages corporate marketplace

◉ Trading in foreign ◉ Financial Transaction ◉ NTPro currency Markets 2020 2019 shares Registrar platform

450 426.8 400 Development goals 2021 329 346.3 350 308.3 300 ◉ Attracting private investors ◉ Sustainability 250 200 ◉ Expanding trading time ◉ International cooperation 150 129.9 in foreign exchange market 100 82.4 85.5 78 40.7 54.5 ◉ OTC-services development 50 ◉ MOEX Treasury platform 0 development Stock Derivatives Fereign Money Commodities exchange 16 Moscow International Financial Centre Doing Business in Russia

Rankings on Doing Business topics (1-190) – Russian Federation

40 26 7 12 25 72 58 99 21 57

Dealing with Protecting Trading Starting construction Getting Registering Getting minority Paying across Enforcing Resolving a business permits electricity property credit investors taxes borders contracts insolvency

The Russian Direct Investment Fund (RDIF)

Entry point for international PROJECTS BN 2 TN RUB 9 : 1 > 80 $40 investors and businessmen. For each rouble In more than 95% Attracted into joint Invested in the ◉ Russian economy invested it attracted 9 of Russian regions funds Multi-purpose site for investors running roubles from partners projects or planning to start a business in Moscow % % % ◉ Access to Moscow’s single > 800.000 90 60 6 OF GDP e-commerce site Of direct Of investments RDIF portfolio ◉ Prompt and personalized Employees in RDIF investments in technology portfolio companies communication with the Moscow revenue Government 17 Moscow International Financial Centre City Infrastructure: Economy & Investments

Economy Investments

% EUROREAN > 17.9 TN RUB + 11.2 1.4 M RUB TOP 3 CITIES $236 bn in total accumulated foreign Iin terms of Moscow GRP in 2018 Moscow GRP growth GRP per capita direct investment (as of October consumer spending (Rosstat) in comparable price in 2018 (Rosstat) 1, 2020). for 8 years (estimated, in 2019 (Euromonitor Rosstat) International INVESTMENT GREW 2,1 TIMES IN 8 YEARS

MOSCOW CREDIT RATINGS FINANCIAL ВВВ Stable HUB

18 Moscow International Financial Centre City Infrastructure: Life Quality

High security level Costs of living World Urban Safety Index, January 2021 1200 Longterm Residence Cost for Expats, 956 2020, USD per month 1000 871 800 625 Sao paulo 29.55 603 589 600 400 Washington 42.89 200

Paris 45.84 0 Shanghai Moscow Sao Paulo

London 46.86

Brussels 49.41 Ecology Dublin 49.94 The average annual concentration 120 104 in the atmosphere of microparticles New York 53.07 100 92 of harmful substances with a diameter of 10 microns or less g/m2 80 Berlin 58.38 60 48 42 38 36 34 30 40 28 28 23 23 Moscow 61.4 17 14 20 0

Shanghai 65.33

Paris

Seoul Berlin

Tokyo

Beijing

London Sydney

Istanbul Mumbai

Beijing 65.78 Moscow

NewYork

Singapore Hong Kong Hong

0 10 20 30 40 50 60 70 deRioJaneiro 19 Moscow International Financial Centre Talents: Quality labour force & High scientific potential

Top 10 cities by universities included in: thousand 11 m people > 180 people QS, THE, RWU: 2019 – 2020, pcs. economically active population annual number of university Tokyo 32 in the Moscow graduates Beijing 21 London 21 of employed 19 Attraction centre for qualified % Moscow 15 50 people workforce from other Russian Paris have a higher education regions and CIS countries 14 New York 13 Shanghai 11 9 Scientific City Profiles Hong Kong 8

Natural and exact sciences Engineering sciences Medical sciences Top 11 cities by scientist articles: Social sciences Linguistic sciences Agrarian sciences 2014-2018, thousand pcs. 120

Beijing 498.7 100 4.5 5.3 5.1 6.2 9.8 9.8 12 11.2 9.6 Washington 340 17.2 7.1 14.4 80 18.6 New York 315.5 27.1 25.9 27.4 Boston 278 22.9 28.6 27.6 60 London 232.6 32.1 35.5 19 13.5 23.1 34.6 36.2 27.2 16.4 Shanghai 228.4 40 11.6 12.6 San Francisco 215.2 20 183.1 36.2 44.5 54.5 42.1 39 41 46.9 41.4 27.7 32.4 Seoul 179 0 Tokyo 152.2 Seoul Shanghai Moscow San Los Paris Beijing Tokyo London New York Moscow 131.9 Francisco Angeles 20 Moscow International Financial Centre MIFC Technology Agenda

Goals of the Bank of Russia as a high-tech regulator Moscow Innovation Cluster (MIC)

Facilitate the competition in the Lower risks and costs in the financial MIC is a large platform aimed at fostering innovation and financial market market enabling cooperation between business, industry, science and city authorities Enhance accessibility, quality Advance the level of competitiveness and range of financial services of Russian technologies DIGITAL FINANCIAL Digital platform i.moscow Subsidies and grants Key areas of development 4. “Regulatory Sandbox” for experimentation with innovative services for cluster members with innovative financial technologies, for business products and services 1. Legal regulation of FinTech, including protection of consumer rights and security of personal data 5. Cooperation within the Eurasian Economic DEVELOPMENT INVESTMENT Union and development of single payment 2. Development of digital technologies in area for member states PROGRAMS Preparing startups for pitches, the financial market and development of digital educating future investors infrastructure 6. Ensuring technological safety and Tech contests and accelerators sustainability in FinTech implementation 3. Transition to electronic interaction between the Bank of Russia, government, market 7. Development of human resources in the participants and their clients financial market

Shaping the future of financial services experience in Russia 21 419 3 126 322 registered companies locations for rent innovation projects → New system for online sales of financial products

→ Aimed to complement traditional sales channels with websites and smartphone apps which will enable customers to compare multiple financial product offers

→ In July 2020 the State Duma adopted the law on financial transactions through a financial platform that enabled launching the Marketplace system 14 866 217 10 participants from Moscow support measures cross -industry clusters → Marketplace 2.0 launched for corporate clients 21

An External View

• The Leading Centre In the Eastern Europe & Central Asia Region in the Global Financial Centres Index • Rating improving quickly • Strong in the areas of infrastructure and human capital

Area of Competitiveness

Moscow Rank

GFCI 57 Business Environment 77 Human Capital 59 Infrastructure 41 22 Financial Sector Development 70 Reputation 76 Connectivity

 A well-connected centre  Good connections in New York and London  Strong links to Dubai  Very well-connected with China

23 Questions, Answers & Observations

24 FS Club

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Forthcoming Events • Wednesday 19 May (15:00) AI made Inventions And AI Created Works In Europe. What Does This Have To Do With My Business? • Friday 21 May (14:00) On the Shoulders Of Giants: The Digital Exploration Of Newton’s Career At The Royal Mint • Monday 24 May (11:00) Emerging Central & South Asian Tech Hubs: The Indonesian & Malaysian Hubs Of 10 Years Ago? • Tuesday 25 May (09:00) How Biodiversity underpins Economic Prosperity

• Visit https://fsclub.zyen.com/events/forthcoming-events/

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