Talking T2S

Thu, 03/03/2016

A User Group meeting dealt with future market claim and transformation processes in Hungary. By Beáta Szőnyi, Relationship Manager, GSS Hungary                                                                                  

In preparation for Hungary’s joining T2S in February 2017, the T2S Corporate Actions National User Group was summoned by KELER (the Hungarian CSD) to initiate a discussion on the key points related to centralised market claims and the transformation that KELER will implement in line with the T2S CASG standards.

Local sub-custodians and issuers participated in the meeting. The establishment of the working group is part of a project that aims to enable the market to adapt to these standards and to initiate lobbying activities to amend certain local regulations necessary to the implementation and operations of market claims and transformation processes. Among other, these changes are expected to take place in the area of taxation including the possibility of a quick refund, a simplified tax reclaim process and the extension of the nominee concept to all types of securities.

KELER summarised the achievements already accomplished. Most importantly, the Capital Market Act has been amended this year with regards to dematerialised securities; (i) the definition of the corporate action was introduced, (ii) KELER was defined as central source for corporate action announcements, and (iii) issuers will pay income on the announced payday via KELER, a financial institution or an investment service provider registered with KELER.

Additionally, the following topics were highlighted to be discussed in more depth:

  • separation of the ownership identification process from the income collection process
  • introduction of a standardised income collection process via the CSD
  • identification of the applicable tax rate in the securities transaction process
  • simplification of tax deduction, relief at source and tax reclaim as well as harmonising them with international standards
  • revision and optimisation of data required to disclose by shareholders.

A series of working group meetings during the upcoming months have been scheduled to ensure continuous discussion.