CSDR – Update on penalty testing at CSD

UniCredit Bank Hungary Zrt.
Retroactive application of fines for the transitional period
Mon, 28/02/2022

KELER, the Hungarian CSD has announced that the European Securities and Markets Authority (ESMA) had issued a resolution requiring KELER to collect and distribute the fines for all settlement instructions that have failed since the original legal deadline of 1 February 2022.

KELER still plans to fully operate the fine mechanism according to the new schedule from 2 May 2022, but In line with the resolution the fines for the transitional period, i.e. for the months of February, March and April 2022 will have to be paid in July 2022 via a consolidated, ex-post settlement.

By 31 May 2022, KELER will prepare the aggregated penalty data for the three concerned months and will make it available to its partners by e-mail via an Excel spreadsheet. KELER's deadline for appealing against the fines of February, March and April is 30 June 2022.

The CSD has also announced that from 1 March 2022 KELER’s (Market Acceptance Test) MAT test environment will be available for market participants to test penalty related functions, business procedures and penalty reports.

The test cases supporting MAT testing are not defined by KELER and there is no limit on the number of test cases that can be executed. Submitting any number of instructions during MAT is possible within the availability time of the test environment. Bulk, volume or performance testing is not intended or expected.

UniCredit Hungary is already working on solutions to update its internal procedures accordingly. We will keep you informed as soon as further details become available.

Impact on investors: Fines for late matching and settlement will be applied by KELER for the transitional period retroactively for the period of February, March and April 2022.