Investment Intermediaries to Stop Securities Availability Checks with Custodians

UniCredit Bulbank AD
Summary: 
Investment intermediaries are no longer required to check if securities subject to a sale trade are available when such securities are held by a custodian
Mon, 18/01/2016

 

The latest amendments to Ordinance 38 on the Requirements to the Activities of Investment Intermediaries (Ordinance 38) abolish the provisions concerning requirements to the investment intermediaries to perform a check for availability of client’s securities with the client’s local custodian prior to execution of a sale trade subject to client’s consent.

The investment intermediaries will be able to execute clients’ trades solely based on the information declared to them by the clients.

The amendments enter into force as of 18 January 2016.

UniCredit Bulbank (Bulgaria) have actively participated in the discussions on the draft amendments to Ordinance 38 via the Association of Banks in Bulgaria and, among other proposals, lobbied for the abolishment of the above provisions.

Impact on investors: Reduced administrative burden to provide consent for disclosure of securities availability to investment intermediaries and local custodians. No rejected or delayed sale orders resulting from investment intermediary’s impossibility (due to lack of client consent) or time required to perform securities availability check.

Related newsflash: Amendments to the Ordinance on the Activities of Investment Intermediaries