Zagrebacka Banka d.d.
Summary:
EURO Introduction in Croatia – Impact Summary
Wed, 23/11/2022
In preparation for the introduction of the Euro (EUR) in Croatia, Global Securities Services (GSS) has prepared the following overview of the most relevant facts related to this important development:
- The EUR will be introduced as the official currency on 1 January 2023.
- The fixed conversion rate has been set to 7,53450 Croatian Kuna (HRK) for 1 EUR.
- All HRK balances on clients’ deposit or transaction accounts, payment instruments and in other records will be converted into EUR free of charge, using the fixed conversion rate.
- Loro payment orders, with sufficient coverage on loro cash account, will be processed until 30 December 2022 (orders received in 2022 with value date up to and including 30 December 2022). Payment orders received in 2022 or 2023 in HRK with value date in 2023 will be rejected.
- For clients having only HRK cash account(s), in accordance with client consent, Zagrebačka banka can open additional EUR account(s), free of charge, with new IBANs. These new accounts would become active from 1 January 2023 and would be used to credit any outstanding HRK balances converted to EUR. All functionalities of the existing HRK account(s) would be migrated to the new EUR account(s). HRK account(s) would then be automatically closed, free of charge.
- Existing securities account(s) (where account numbers and naming remain the same) will be automatically linked to the newly opened EUR cash accounts, ensuring that operational processes within custody are not impacted.
- The last trading day in HRK on the Zagreb Stock Exchange (ZSE) will be on 28 December 2022. After the close of trading, the ZSE will cancel all open orders. The 29th and 30th of December 2022 will be non-trading days and the ZSE will not be publishing trading reports during that period. The first day of trading in EUR will be on 2 January 2023.
- The Central Depository & Clearing Company Inc. (SKDD) will remain open during this time and settlement will still be possible on the 29th and 30th of December. Any pending settlement instructions matched or unmatched during 2022 remaining in the SKDD system with settlement amounts in HRK, will be automatically converted to EUR over the year end.
- The nominal value of equities in the SKDD will remain in HRK, however these must be converted by issuers within 1 year following the introduction of the EUR. GSS will convert the nominal value of equities on 1 January 2023 using the fixed conversion rate and will maintain the EUR countervalue until issuers officially convert the nominal value of related equities to EUR in the SKDD. Clients will be advised of these changes accordingly.
- The nominal value of government debt securities will also be converted to EUR by the SKDD on 1 January 2023. GSS will inform their clients on the redenomination of government debt securities via MT564 / 566 (based on official confirmation from the SKDD).
- Issuers of corporate debt securities may, within 18 months from the date of the introduction of the EUR, choose to display the nominal amounts of debt securities in EUR instead of HRK. The trading and balance reporting of corporate debt securities will be processed using the face amount in HRK, whereas the settlement will be in EUR.
- Legal holders of debt securities with converted nominal values will have the right to submit requests for compensation to issuers if they claim to have suffered damages due to nominal conversions from HRK to EUR, within 2 years from the day of the nominal value conversion.
- All outstanding financial obligations based on equities or debt securities denominated in HRK which have not been fulfilled by year-end, will be fulfilled in EUR.
- Client settlement instructions from the settlement date of 2 January 2023, must bear EUR settlement amounts. Settlement instructions with settlement amounts in HRK will no longer be accepted by the system.
- Invoice calculations will remain the same (in either EUR or USD) for all international clients. For domestic clients, custody invoices for December 2022 will be expressed in HRK but will have to be paid in EUR, using the fixed conversion rate.
- Daily MT535s for VD 30 Dec 2022 will be sent on 30 Dec 2022 in the afternoon (18.00 CET), denominated in HRK. Monthly MT535s for 31 Dec 2022 will be sent on 2 Jan 2023 (18.00 CET), also denominated in HRK. Daily MT535s for 2 Jan 2023 will be sent on 2 Jan 2023 (18:00 CET), denominated in EUR.
- All CSDR penalties for December 2022 will be calculated in HRK and invoiced in EUR.
Additional information can be found on the following webpage: Euro introduction ZSE launched a dedicated webpage on the introduction of euro
Impact on investors: For information purposes only.