UniCredit Bulbank AD
Central Depository AD has updated its Rules in relation of its forthcoming joining to TARGET2-Securities (“T2S”).
Following approval by the Financial Supervision Commission, Central Depository AD (“CDAD”) has amended its Rules. The main changes are related to CDAD’s migration to T2S on 11 September 2023 and will enter into force on the same date and can be summarized as follows:
- CDAD shall charge its members with the out-of-pocket expenses incurred for the T2S Services. More details are yet to be announced.
- A credit institution which is a CDAD member can become a Directly Connected Party (“DCP”) to T2S in case it complies with the rules and requirement of TARGET2-Securities, has performed relevant testing and has been authorized as a DCP by the Bulgarian National Bank.As announced previously, all CSD members will be initially connected to T2S as Indirectly Connected Parties.
- A CSD which is a T2S participant (participating CSD) can submit a request for access to CDAD. Upon such request, CDAD shall immediately grant the required access to its System for Clearing and Settlement.
- Providing the option for DVP Model 1 for settlement (gross settlement of securities and cash) on a per-instruction basis in addition to the currently applied DVP Model 2 (gross settlement of securities, net settlement of cash).
- Mandatory use of a Dedicated Cash Account (DCA) in T2S for the cash settlement of trades in EUR-denominated financial instruments and financial instruments priced in EUR.
- The use of two omnibus securities accounts per CSD participant – one for client securities and another one for proprietary holdings – has also been described.
- Corporate action-related payments for financial instruments registered at T2S shall also be made via T2S system.
- Market claim, transformation and buyer protection provisions have also been updated, including by incorporating T2S-related changes.
In addition to T2S-driven changes, Central Depository AD has also made an amendment to its Rules, with effective date 12 May 2023, regarding CSDR-related cash penalties. Such penalties will no longer be collected on the day following the day of settlement finalization but instead on 15th of the month following the month in which they have been accrued.
Impact on investors: For information purposes.