Amendments to the Central Depository Code of Rules

Romania
UniCredit Bank S.A.
Summary: 
Financial Supervisory Authority approved on 07.12.2017 amendments to the Central Depository Code of Rules
Tue, 19/12/2017

On 07.12.2017 the Financial Supervisory Authority (FSA) decided the approval of the modifications to the Central Depository (CSD) Code of Rules, previously approved by the Board of CSD and reviewed by the National Bank of Romania (NBR).

The amendments on the CSD Code of Rules were made mainly for compliance with the FSA measures after the assessment of the CSD System with the CESR-ESCB Recommendations for the securities settlement systems.

 

The main changes refer to:

 

- Additional provisions for the CSD participants such as:

  • Additional obligations on operational risk management documentation to be sent to the CSD
  • New provisions regarding the assessment of the CSD of the admission requirements for all types of participants, including clearing participants, based on the criteria set-up by the UE Regulation 392/2016
  • New provisions applicable to the participants for which the custody and settlement obligations are took over by a custodian, regarding the mandatory clauses that shall be included in the agreement between them
  • Replacement of the clause related to the suspension of a participant with the measure of blocking the access of that participant to the Central Depository
  • Measures for informing the market’s participants regarding the access blocking of a participant in order to avoid sending instructions to that participant
  • New provision regarding the possibility for depositories having the quality of direct participants to the Central Depository system to empower a custodian to operate in their name in the CSD system
  • Introducing of criteria for identification of the critical participants in the CSD system and set-up of their obligations

 

- Provisions on clearing, settlement and risk management in the regulated market

  • Provisions regarding the trading and settlement activity in case of participants for which the access to the CSD is blocked
  • Sanctions added for the clearing participant (settlement bank) in case of breaching the provisions regarding the crediting of the participant’s accounts in the deadlines provided by the CSD
  • Set-up of the principles of trades exclusion and the sanctions in case of a clearing participant (settlement bank) that does not confirm the participation to the settlement, even if it received the funds from the participants (i.e. brokers)
  • Set-up of measures in case of unavailability of ReGIS system (the payments system) due to force majeure
  • New provisions regarding the custodian option to use the exposure technical limit in its relationship with the indirect participant
  • New provision on the possibility to revoke bilaterally the transfer orders associated to the allocation trades on the custodian accounts
  • Amendments on the option to correct allocation trades, in case of wrong account used in the settlement instructions

 

- Provisions on the settlement of trades OTC

  • New provision on the obligation of participants which concluded OTC trades, including turnaround, to confirm on reciprocal basis, the trades on the trade day; the obligation is applicable to the participants which concluded allocation trades as well
  • New provision on the possibility to revoke bilaterally of the transfer orders associated to the allocation trades on the custodian accounts
  • Extension of turnaround applicability for shares, rights and fund units for which an offer is under development on the Bucharest Stock Exchange

 

- Provisions on the management and custody of the financial instruments in the participants’ accounts

  • Enclosure the  obligation for custodians to make the daily reconciliation on the entire custodian chain
  • Additional provisions for the participants to inform Central Depository on the reasons in case of wrong records on the daily reconciliation
  • New provision on the possibility of participants to maintain in their own systems global accounts in the name of other entities authorised to open securities accounts for their clients
  • New provision on the participants’ obligation to send to the CSD upon request, the necessary information for identifying the owner of the financial instruments

 

- Provisions on the depository and registry activity

  • New provisions on the allocation by the CSD of FISN codes according to ISA 18774
  • Amendments brought in order to harmonise the CSD Code with other applicable laws (i.e. Civil Code)
  • Revision on the documentation required for direct transfers
  • Amendments to the changes of identification data of the securities accounts by the CSD

 

Other amendments were made in order to harmonise the entire content of the CSD Code of Rules.

 

The changes on the Central Depository Code of Rules will be enforced starting to 1February 2018.

Impact on investors: Amendments to the Central Depository Code of Rules were approved by Financial Supervisory Authority and will enter in force on 1 February 2018.

 

Your contact
Irina Savastre, Head of Global Securities Services Romania
Tel. +40 21 200 2670, Fax +40 21 200 2682
irina.savastre@unicredit.ro