T2S Preparations in Bulgaria

UniCredit Bulbank AD
Summary: 
The Bulgarian National Bank has initiated the preparations to join TARGET2-Securities (T2S).
Thu, 07/07/2022

The Bulgarian National Bank (BNB) has informed the local banks which are participants in ESROT (the Electronic System for Registration and Servicing of Trades in Government Securities) that, in accordance with the BNB Management Board decision and in coordination with the European Central Bank, it has started the preparations for the Bulgarian government securities’ CSD to join the T2S platform.

The target date of joining T2S is September 2023 with the following milestones highlighted:

  • Internal testing shall start in December 2022.
  • Testing with banks which are ESROT participants shall start in Q2 2023.
  • Migration of Bulgarian government securities to T2S shall be made in a progressive manner: EUR-denominated securities are to be migrated in September 2023, while BGN-denominated securities shall be converted into EUR upon EUR adoption in Bulgaria and subsequently migrated to T2S as well.

According to further details shared by BNB:

  • ESROT participants shall be included in T2S indirectly, i.e. being Indirectly Connected Parties (ICP), and thus shall continue to send their settlement instructions for transactions in government securities to BNB which upon successful validation and matching shall be forwarded to T2S.
  • BNB shall open in T2S securities accounts for the ESROT participants, whereas the settlement banks shall open in T2S Dedicated Cash Accounts (DCA).
  • A webinar will be organised by BNB to provide relevant additional information.

BNB has also mentioned that Central Depository AD is also targeting to join T2S in September 2023 for which relevant preparations are under way.

Impact on investors: For information purpose. Full client impact is to be assessed once sufficient details will become available.