Termination of KELER intraday government securities lending service

UniCredit Bank Hungary Zrt.
Summary: 
The Hungarian CSD, KELER Zrt. (KELER) announced yesterday that pursuant to the decision of the Government Debt Management Agency (GDMA), KELER terminated the intraday government securities lending service related to MTS Hungary as of 26 June 2013.
Mon, 08/07/2013

Under the agreement concluded by KELER and GDMA in December 2011, KELER offered intraday government securities lending services to facilitate the seamless settlement of trades made on the MTS Hungary market. The aim of KELER and GDMA was to assist market participants (i.e. trading members of MTS Hungary) who could not provide necessary securities cover in time for multinet settlement on settlement date with an intraday government bond lending facility.

After one and a half years GDMA decided to terminate the intraday lending services due to the low level of market demand. In line with the decision made by GDMA, KELER will not provide this type of securities lending services for its clients trading on MTS Hungary. KELER Treasury and the GDMA continue however weekly and overnight repo services to foster the smooth settlement of MTS securities trades.

Related Newsflash: Newsflash Hungary - Bond Market Update

Impact on investors:

In line with the decision of GDMA, KELER terminated intraday government bond lending system due to rather low market demand. The service was exclusively available for MTS Hungary trading members so did not apply to the OTC market.