UniCredit Bulbank AD
Tue, 12/09/2023
The Bulgarian National Bank (“BNB”) has amended as of 11 September 2023 Ordinance No 5 of 4 October 2007 on the Terms and Procedure for Acquistion, Registration, Redemption and Trade in Government Securities (‘Ordinance No 5’) and Ordinance No 31 of 4 October 2007 on Government Securities Settlement (‘Ordinance No 31’), mainly as a result of the CSD’s joining to TARGET2-Securities (“T2S”) as of 11 September 2023.
The main amendments include among others:
- Ordinance No 5:
- Introduction of provisions related to T2S Dedicated Cash Accounts (“T2S DCA”) which are to be used for settlement and corporate action proceeds of T2S-eligible government securities.
- Participation to ESROT (BNB’s electronic system for registration and servicing of trades in government securities) will now be decided by a commission appointed by the Central Bank’s Deputy Governor in charge of the Banking Department and not by the Head of Fiscal Services Directorate at BNB.
- Enforcement of crisis management measures or crisis prevention measures against an ESROT participant shall not be a sole reason for suspension or termination of its participation in ESROT.
- On the day preceding the payment date of an interest or redemption payment for a government security, BNB shall apply earlier settlement deadlines, i.e. settlement instructions for transactions in the respective government security shall be accepted until 15:00 local time (CET + 1) and processed until 15:30 local time (CET + 1).
- Ordinance No 31:
- Introduction of provisions related to (i) T2S Dedicated Cash Accounts (“T2S DCA”) and (ii) T2S securities accounts which are to be used for settlement at T2S.
- Settlement shall be considered final upon credit of the buyer’ securities account in BGN at BNB or in EUR at T2S, as applicable.
- Recycling of settlement at T2S shall be in line with the T2S rules.
Impact on investors: Government securities regulations in Bulgaria aligned with the BNB’s migration to T2S.