CDAD has announced that it has become an auxiliary TARGET2 system as part of its service enhancements. Starting from 22 May 2018, all securities settlements and corporate actions proceeds in EUR will be processed by the CSD via TARGET2 with the participation of settlement banks, i.e. banks that can facilitate the processing of the above settlement. Each CDAD member needs to appoint a settlement bank in order to settle its transactions and corporate actions proceeds in EUR, unless the respective CDAD member is a settlement bank itself. As of 9 May 2018, a total of 10 local banks, including UniCredit Bulbank, have agreed to become settlement banks in resect of this interaction with CDAD.
Until now, securities settlement, except for EUR-denominated government securities, was possible in BGN only, while corporate actions proceeds in EUR were processed by CDAD via commercial bank payment instructions to CDAD members.
Impact on investors: CDAD will process all cash settlement in EUR via TARGET2. Securities settlement for all EUR-denominated securities will be done in EUR.