Amendments to Settlement Instruction Formats and Account Structure in CDAD new IT System

UniCredit Bulbank AD
Summary: 
Updates to settlement instructions formatting and clear designation of omnibus accounts will be introduced by the Bulgarian Central Depository AD (CDAD) with the launch of the new IT system, scheduled for 29 February 2016
Fri, 26/02/2016

 

With the launch of the new IT system of CDAD, on 29 February 2016, new formats of settlement instructions will be implemented for CDAD members. Each MT54x settlement instruction sent to CDAS shall contain certain new technical details to be completed by its members. Thus, UniCredit Bulbank will require the following details in the SWIFT settlement instructions received from its clients to ensure STP settlement:

 

No. ITEM TO BE COMPLETED IN MT54X MANDATORY/OPTIONAL
1 Reference number of the trade on the Stock Exchange or unique reference number of the trade as agreed between the parties for OTC trades OPTIONAL
If not completed by the client, UniCredit Bulbank will complete it by obtaining the information from the client’s local broker / the counterparty’s custodian during the pre-matching process
2 BIC of the client’s local broker (for all trades with the involvement of a local broker) or of the counterparty’s custodian (for all other trades) MANDATORY
3 BIC of the counterparty’s local broker (for all trades with the involvement of a local broker) OPTIONAL
If not completed by the client, UniCredit Bulbank will complete it by obtaining the information from the client’s local broker / the counterparty’s custodian during the pre-matching process
4 Settlement amount (for DVP/RVP) MANDATORY
5 Deal amount (for DVP/RVP) OPTIONAL
Not required if the local broker’s commission is completed
6 Local broker’s commission (for DVP/RVP) OPTIONAL
Not required if deal amount is completed
7 Cash account IBAN (for DVP/RVP) MANDATORY

If the information under items 1 and 3 above is not completed in the client’s settlement instructions and cannot be obtained from the client’s local broker / the counterparty’s custodian during the pre-matching process, UniCredit Bulbank will advise and request it from the client accordingly. Should any settlement delays occur as a result of missing information in the settlement instructions, UniCredit Bulbank will not take any responsibility for that.

According to the new Rules of CDAD, omnibus accounts will be clearly designated in its new IT system. As the old system did not distinguish between segregated and omnibus accounts, all accounts will automatically be transferred in the new IT system as segregated.

Clients looking to re-open existing accounts as omnibus accounts in the CSD’s new IT system will have to reconfirm the account type by sending SWIFT MT599 to UniCredit Bulbank, listing the names and the numbers of the existing securities accounts that have to be re-opened as omnibus accounts in the CSD’s new IT system. Following the opening of the new omnibus accounts, the securities held in the old accounts will have to be transferred, for the purposes of which UniCredit Bulbank will require SWIFT DFP/RFP NBEN settlement instructions.

Accounts not explicitly instructed for reopening as omnibus accounts in the new IT system will remain as segregated and the account holder with be considered as beneficial owner of the securities recorded in such accounts.

Due to the multiple postponements of the official launch of the new IT system of CDAD and the numerous changes in its Operating and Technical Instructions, UniCredit Bulbank is in the position to announce the above information in its entirety only now. In order to provide its clients with sufficient time to align their settlement instructions with the new requirements and to reinstruct omnibus account openings and transfer of securities, UniCredit Bulbank will provide a transitional period of one month. As of 4 April 2016, to facilitate straight-trough processing, all settlement instructions shall contain the details as per the new formats.


Impact on investors:
As of 4 April 2016 updated client settlement instructions will be required. All omnibus accounts should be re-opened in the new CDAD IT system to be clearly designated as such and the securities have to be transferred to these new accounts.

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