During the last Services Committee meeting of the Slovak Central Securities Depository (CDCP), the representatives of the Ministry of Finance informed the CDCP members of the creation of a second CSD on the market, which would operate under the name Slovakia Clearing CDCP.
The entire capital market infrastructure and specifically the operation and the future of CDCP were analysed by the Ministry of Finance as a part of its new Strategy for capital market development, with the following alternatives considered:
- creating new CSD
- outsourcing the CSD services to one or more foreign CSDs
- eliminating the CSD and transferring its duties to Bratislava Stock Exchange
- modernising the CSD and implementing a full membership principle
- transferring the duties of the CSD to the National Bank of Slovakia
As a result, the creation of a new CSD was evaluated as being the best alternative and was presented by the Ministry of Finance to the Slovak Government, which subsequently approved it as part of the whole Strategy for capital market development.
At present, the only available information with respect to the new CSD is that the new institution has applied for a CSD license with the National Bank of Slovakia and is expected to begin operations in 2015. Slovakia Clearing CDCP would be established by the Slovak Guarantee and Development Bank (Slovenská záručná a rozvojová banka, SZRB) - a bank focusing specifically on the development of small and medium-sized businesses in Slovakia, the ultimate owner and sole shareholder of which is the Slovak Republic, represented by the Ministry of Finance.
The new CSD is expected to operate on a full membership principle in line with international standards and will become a competitor to the currently functioning CDCP. The statutory representatives of Slovakia Clearing CDCP are to provide details of its planned operations to the market participants after receiving the CSD license, which is expected to happen in the autumn.
Impact on investors: A second CSD will be established in Slovakia and should start operating from 2015. The operations of the current CDCP remain unchanged for the time being and both CSDs will operate in parallel and compete.