UniCredit Bulbank AD
Summary:
Amended texts of the government securities regulations have been approved, which, among other things, introduce the possibility for settlement against payment for EUR denominated government securities, facilitate the access of EU/EEA CSDs to become direct ESROT participants, and allow the transfer of Bulgarian government securities to such CSDs.
Wed, 27/11/2013
The Bulgarian National Bank (BNB) has approved amendments to the government securities regulations, the most important of which are as follows:
- introduction of settlement against payment for EUR denominated government securities, which will be performed in accordance with the BIS Settlement Model 1 via the TARGET2-BNB system component
- secondary market settlement against payment for government bonds will be mandatory for transactions between ESROT participants, but will not be possible for transactions between ESROT participants and their clients or between clients of ESROT participants
- common record date for interest and redemption payments, irrespective of the government securities' currency of denomination: transactions with such government securities will be possible until 12:00 local time on the day preceding the respective payment date
- introduction of government securities lending
- Bulgarian government securities can be transferred to and safekept in the BNB accounts of CSDs registered in a member state of the European Union or in another state which is a contracting party to the Agreement on the European Economic Area (EU/EEA CSDs), which have become direct ESROT participants - upon the transfer of Bulgarian government securities to such EU/EEA CSDs, the transactions with these securities will be regulated in accordance with the legislation of the EU/EEA state, where the CSD has been registered
- introduction of a 'technical operator' function, where local ESROT participant banks can perform all ESROT communication on behalf of and for the account of EU/EEA CSDs, which have become direct ESROT participants
- regulation of settlement finality: the settlement will be considered final when the receiver's account has been credited
The changes have become effective as of 22 November 2013.
Impact on investors: The changes in the government securities regulations are a further step towards aligning this segment of the market with established international practices and creating an environment that is able to attract investor interest.
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