Clear Concept Ahead

Fri, 15/07/2016

The Slovenian T2S National User Group, which includes UniCredit Banka Slovenija as its member, has coordinated all activities related to the T2S implementation in the market.

Due to the prevailing end-investor securities account structure at the Slovenian CSD KDD, a layered model will be used for the mapping of securities accounts to T2S, with the following options:

  • 1:1 mapping - where the accounts at KDD will be directly mapped onto T2S enabling settlement in DCP mode
  • N:1 mapping - where a group of accounts at KDD will be mapped onto one T2S account, which will be accessible only via KDD and not directly via the T2S interface (i.e. in ICP mode) and which will keep its current functions
  • 1:1R with restrictions - the account at KDD will be replicated in T2S, third-party rights will be allowed in KDD’s system CRVP but only settlement will be possible through this system, KDD will validate and block securities on such accounts, which will enable other CSDs and DCPs to view the positions on the account in T2S

The ISO15022 standard will be used for KDD - participant communication before and after T2S implementation, the new ISO20022 standrd will only be used between KDD and T2S.

Main characteristics of the settlement process:

  • KDD will provide a matching service for internal transactions, this service will be aligned with T2S matching
  • KDD will only accept NEWM (all PREA MT54x will be rejected by the CSD's system)
  • hold and release will only be possible manually through the KDD client (CRVP) or within the settlement instruction (MT54x)
  • instructions prioritisation will not be offered by KDD and will only be available to DCPs
  • night-time settlement will be limited for ICPs and available to DCPs
  • partial settlement will be possible only for DCPs when instructing directly T2S
  • blocking of securities through MT524 will not be possible and is not possible in general, blocking is generally done through the CSD client as third-party rights maintenance
  • KDD will send instructions for OTC trades in real time and for on-exchange trades in batches
  • cash funding for stock exchange trades (mandatory settlement) will be done directly through the participant’s DCA

A new corporate actions process will be implemented with T2S. The corporate actions will be executed through KDD and its members. Details of the new processes for corporate actions will be prescribed by KDD in line with international CAJWG / CASG standards. KDD’s regulations will define deadlines, methods of notification for option choices for voluntary corporate actions, important days for execution of corporate actions (e.g. record date, ex date, last trading date, etc.), market claims and other details inherent to corporate actions' processing. The rules prescribing the new corporate actions process will be prepared in the second half of 2016.

The upgrade of KDD's system CRVP will materialise in two phases - the first one was completed in April 2016 and the second one is scheduled for October 2016. The functionalities of the first upgrade were presented to KDD’s members in February 2016, while the second upgrade and the migration process will be presented to KDD’s members at two workshops in September 2016 and in October 2016.

The implementation of T2S in Slovenia goes in line with the set schedule. Bank of Slovenia will take care of the cash part of the project, the most important legal changes have been approved and others are in the pipeline and should be approved by the middle of 2016.

In addition to providing a high level of settlement and safekeeping services to our clients, UniCredit GSS Slovenia will be able to improve its corporate actions services and offer new services in the post-T2S environment thanks to the implementation of the new corporate actions system by KDD.

 

Elmedina Garibović Vanda Močnik-Kohek
Head of Global Securities Services Slovenia Relationship Manager
  Global Securities Services Slovenia
Tel. +386 1 587 6597 Tel. +386 1 587 6450
elmedina.garibovic@unicreditgroup.si vanda.mocnik-kohek@unicreditgroup.si