GSS Croatia ready for Target2Securities integration
After a long period of preparation, the Croatian capital market is just a step away from becoming integrated into Target2Securities (T2S).
Integration into T2S will enable harmonization of the operations of the domestic securities settlement system and enable participation in the Eurosystem Collateral Management System (ECMS). Central Depositary and Clearing Company Inc. (SKDD) as part of the EURO program, proposed the harmonization of the process due to its integration with T2S, which took place on 11 September 2023. The Governing Council of the European Central Bank concluded that SKDD meets the conditions to access T2S services based on the Market Infrastructure Board’s (MIB) assessment, which found SKDD to be fully compliant. Further on, MIB should finalize its approval between 4 and 6 September.
Building upon the above information, and in accordance with Articles 566 and 566a of the Capital Market Act, SKDD has officially submitted a request for the approval of new SKDD Rules and Procedures to the Croatian Financial Services Supervisory Agency (HANFA). The approval process is expected to conclude shortly.
To ensure full compliance with the new processes outlined by T2S and the new SKDD Rules and Procedures, Zagrebacka Banka Global Securities Services (GSS Croatia) has successfully completed all the necessary activities within its internal T2S project. This includes essential adjustments to both processes and IT systems. Additionally, GSS Croatia actively participated in the external T2S testing conducted by SKDD from July 17th to July 28th, 2023. The primary areas covered in this external testing encompassed tasks related to the entry and modification of TAS SCA and TAS DCA accounts, the handling of receive against payment instructions (RAP), the processing of RAP instructions, the transmission of settlement instructions through the SWIFT application, the import of SWIFT messages, and the execution and receipt of CSDR cash penalty payments.
The integration of the Croatian capital market into the T2S platform is one of the most significant and challenging changes in the market, along with the introduction of the euro as the official currency in the Republic of Croatia. This integration will contribute to the further development of the stability and efficiency of the capital market and provide a more advanced and integrated infrastructure for the settlement of securities.
