It is a pleasure to address to you this month’s issue of the GSS editorial - right after the Easter Holiday Season.
Last year brought remarkable developments with numerous issues moving forward. Within one year the government changed twice, the SWIFT link between CSD and its members was implemented, the T2S framework agreement was signed and several measures to ensure the sustainability of the state budget and to make the Slovenian economy more competitive were presented by the ex-government.
An austerity package and revised budget were accepted in May 2012 to reduce the budget deficit by EUR 800 million. The tax rate on profit was reduced from 20% to 15%. The tax rate on interest, dividends and capital gains for individuals was increased from 20% to 25%. The Act on Measures to Strengthen Stability in Banking established the “bad bank” BAMC - Bank Assets Management Company. The Act on the Slovenian State Holding has established a company that will be managing all state-owned assets, which are now owned by several legal entities with different business goals.
After years of discussion the Slovenian assembly has passed a pension system reform and a reform of the labour market. The first one tightens retirement conditions by raising the retirement age to 65 years or 40 years of pensionable service, while the latter includes measures to increase the flexibility of the labour market by loosening employment and dismissal procedures and introducing measures to restrict fixed-term employments.
The accepted measures provide a solid ground for bank restructuring, structural reform, economic growth and market access. The new government is currently reviewing them and we all hope that their implementation will continue. Further privatisation is the most critical issue which lies ahead of Slovenia. Years of discussion over “national interest” shall be a matter of the past, as we rather want to push our economy and development forward.
The most important progress on the market in 2012 was the introduction of the Matching and Settlement Standards Market Practice in Slovenia and the implementation of the SWIFT link between KDD and its members for settlement of OTC trades in November. I am proud about our role in this project. My colleague Jana Badovinac Žunek, Head of GSS Operations in Slovenia, was one of the most active members of the working group that prepared the Standards.
The Bank of Slovenia and the Central Securities Clearing Corporation signed the T2S Framework Agreement on June 26, 2012. KDD is one of 24 CSDs which joined T2S. It is predicted that KDD will join T2S in the last wave in February 2017.
In autumn 2012 KYC requirements were changed as the List of Countries by Geographical Risk Area and group guidelines were amended by the Office for Money Laundering Prevention. A number of countries which were entitled to a simplified account opening procedure were classified for a standard or an enhanced procedure; the period for regular review of documentation was shortened and is now required also for accounts with no activity. The result of the changes is the review of documentation for almost all segregated accounts, which has caused a lot of work for our clients. We are now collecting information on KYC requirements for segregated accounts opened at CSD level in other EU countries to be able to lobby at the regulator.
I would like to take this opportunity to thank all our clients for the favourable rates in the 2012 Global Custodian Agent Banks in Emerging Markets Survey. For the first time since securities services have been offered to foreign clients in Slovenia we were “top” rated. This achievement is the result of the dedicated work of my young team of eight skilled professionals.
We all undertake to continue to improve the services we offer so that we stay the first and best provider in Slovenia.
Vanda Mocnik Kohek
Head of GSS Slovenia