Migration to T+2 Settlement Cycle

Dear Client,

As it was earlier communicated in line with the draft CSDR, the regulation on central securities depositories and the Board Resolution of KELER CCP concerning shortened settlement cycle will be introduced in Hungary. On 1 September 2014 KELER CCP issued further information on this subject.

With effective date of 6 October 2014, migration from the current T+3 to T+2 settlement cycle, applicable to the Equities Section of the Budapest Stock Exchange and BETa Market, will take place. (The settlement cycle for bonds is already T+2 in the market)

The migration will be handled under the following schedule:

• Securities transactions with trade date prior to or on 3 October 2014 will be settled following the T+3 settlement cycle;
• Securities transactions with trade date on 06 October 2014 or after will be settled following the T+2 settlement cycle.

With respect to the clearing of the transactions with settlement date on 8 October 2014, KELER CCP will combine the netting of all transactions with trade date on 3 October and with trade date on 6 October 2014 and clear them in one single clearing cycle on 8 October 2014.

After the migration all transactions guaranteed and cleared by KELER CCP will be following the T+2 settlement cycle (Budapest Stock Exchange, BETa Market and MTS Hungary).

Additionally, KELER CCP decided not to extend the clearing cut off time from the current 2:00 pm.

Impact on investors:  The transactions of foreign investors that are non-clearing members of the Budapest Stock Exchange are OTC transactions from settlement point of view and therefore the parties may freely agree on the settlement cycle. However, the settlement cycle of such OTC transactions normally follows the one applicable to the regulated market, which will become T+2  from 6 October 2014.

Related Newsflash: Migration to T+2 Settlement Cycle