Optional changes in settlement instructions related to T2S migration of Bulgarian CSDs.

UniCredit Bulbank AD
Thu, 10/08/2023

Considering the available information announced by the Bulgarian CSDs – Central Depository AD (“CDAD”) and the Bulgarian National Bank (“BNB”) – related to their upcoming migration to TARGET2-Securities (“T2S”) on 11 September 2023, UniCredit Bulbank will put in place as of the same date the following optional changes for its clients instructing settlement at T2S:

1) Clients will be able to instruct with field :95P::PSET//TRGTXE2S in Subsequence E1 SETPRTY for settlement at T2S.

It shall be noted that even if a client continues to instruct with :95P::PSET//CEDPBGSF (for settlement at CDAD) or :95P::PSET//BNBGBGSF(PRM) (for settlement at BNB), accordingly, UniCredit Bulbank will not reject the respective client instruction but process it even it is related to settlement at T2S.

 2) To instruct gross cash settlement directly at T2S of trades in CDAD-eligible financial instruments, i.e. to apply DVP Settlement Model 1 (gross settlement of securities and cash), clients shall populate field :22F::CASY//GROS in Sequence E SETDET of their settlement instructions.

If field :22F::CASY// is missing or a client has instructed with field :22F::CASY//NETS, then the cash settlement will be netted at CDAD, as is the case today, i.e. DVP Settlement Model 2 (gross settlement of securities, net settlement of cash) will be applied.

It shall be noted that the gross cash settlement may lead to higher charges for clients but this has not been fully clarified by CDAD at this stage.

It shall be further taken into account that certain details around the above migration are still not clear enough so further changes might need to be introduced at a later stage.

Impact on investors: As of 11 September 2023, clients can optionally update their settlement instructions for transactions settled by CDAD and BNB at T2S.