Amendments to the Capital Market Act

Zagrebacka Banka d.d.
Summary: 
Harmonisation of the Capital Market Act with EU Standards.
Wed, 22/05/2013

The Croatian Parliament adopted the amendments to the Capital Market Act prescribing further organisational and reporting requirements for the market participants providing investment and ancillary services, investor protection requirements, supervision measures, risk management measures and measures preventing market abuse.

The amendments also prescribe OTC transactions to be reported to the Zagreb Stock Exchange in case financial instruments listed on the regulated market are traded. The obligation to report the OTC transaction is the buyer’s responsibility, if the buyer is an institutional investor. Otherwise, the reporting obligation is on the seller’s side. OTC transactions must be reported by the end of the trading day when the transaction was executed, or by the beginning of the next trading day if the transaction was executed after the closure of the trading session. This requirement is not related to repurchase agreements, buy/sell back, etc. (borrowing based on financial instruments).

Furthermore, if held on custody accounts, shares of the Zagreb Stock Exchange (ISIN HRZB00RA0003), the Central Depository and Clearing Company (ISIN HRSDA0RA0007) have to be safekept in segregated accounts.

There is a transition period until 30 September 2013, by which all participants have to move their positions in ZSE and CSD shares to the accounts in their name. In the same period ZSE has to provide all the necessary conditions to enable OTC transaction reporting.

Impact on investors: Amendments to the Capital Market Act come into effect once Croatia is amalgamated into the EU (1 July 2013).