2023 – CDCP offers to Settle and Safekeep Short-term Securities

UniCredit Bank Czech Republic and Slovakia,a.s.
Thu, 16/03/2023

The local CSD Prague (CDCP) has recently advised of its intention, starting from April 3rd, 2023, to introduce unified management of domestic securities into one Central Depository including Short-term securities (i.e. T-Bills). This initiative aims towards the management of records linked to the central securities records maintained by the CNB in its system SKD and will enable, in particular:
• Keeping T-Bills in the same account as other securities (equities, long-term bonds)
• Settlement of treasury bills in the same cycle (netting) as other securities (equities, long-term bonds)
• Settlement in CeBM for EURO currency, or CoBM for USD and GBP currencies
• Use of the functionalities of the UNIVYC settlement system:
- Multi-cycle settlement
- Hold/release mechanism
- Partial settlement
- Partial release
- Technical netting
- ACM – will be resolved with the CNB

The settlement will be split into external settlements and internal settlements where the internal settlements are transfers within the market accounts opened at the SKD by the CDCP. The settlements logic will be the same as is today for OTC settlements with fixed income securities. External settlements will be transfers between the SKD & CDCP. This external settlement logic of SKD securities will be the same as currently used by the CDCP for foreign securities.

Since the SKD system does not support the hold/release function, instructions for transfers (from the CDCP to the SKD) will be sent to the SKD system on ISD. Once the validation of securities position check has been performed by the CDCP, instructions for transfers (from the SKD to the CDCP) will be sent to the SKD system immediately following receipt from the participant.

Primary auctions are not supported by the CDCP currently. Interest payments will be paid by the CDCP once funds are received from the SKD to the CDCP account. Daily penalty reports will also be provided. Monthly reports are not supported by the SKD, therefore will also not be provided by the CDCP.


Impact on Clients: Clients are advised to take note of the above information.