KELER and CSD enhancements underway

UniCredit Bank Hungary Zrt.
Wed, 24/03/2021

Series of regulatory amendments and tests on-going to support further development of the securities market



KELER and the CSD have been the most talked-about developments on the Hungarian market lately and in the past few months, the local CSD has shared a great deal of information regarding the projects.

On 16 December 2020, the Hungarian Supervisory Authority (the Central Bank of Hungary) granted KELER with an authorisation for operation in accordance with CSDR. As a result, KELER can now offer its clients services that support a safe and efficient securities market as a depository operating on the basis of the unified European regulations.

The authorisation brings a number of legal and operational changes, so the General Business Rules and the Fee Schedule of the CSD have been modified accordingly. By obtaining the CSDR license, KELER has also obtained an approval to provide ancillary banking services to its clients. This authorisation only covers the cash settlement of operations performed in the securities settlement system, thus KELER will not be considered a payment service provider in the future.

The local CSD also introduced stricter access rules according to which, access to the settlement system will be evaluated at regular intervals and immediately when a risk arises. Based on CSDR, in addition to the already available own and principal account segregations, additional options, such as distinguishing between client-individual and consolidated accounts, will be available.

In February 2021, KELER announced the launch of the second phase developments of CAPS - the web-based application managing SRDII-related functions and services. SRDII-related SWIFT communication for CSD’s clients and intermediaries without direct account relationship will now be possible, and moreover, KELER will introduce a service for Shareholder’s Identification in case of Hungarian listed shares starting with 29 March 2021.

Finally, according to an announcement of the CSD, the first round of IT connectivity tests of the KSDP programme (Keler Service Development Programme) will be launched as of 12 April 2021. The purpose of this testing session is to monitor and assess the communication channels between the CSD system and its direct participants. This exercise is not aimed at testing the business procedures and successful booking of instructions, however, market participants are expected to submit at least one FOP instruction.  CSD participants who successfully meet the connectivity test requirements will be approved to take part in the next round of market tests which will focus on the business processes and which are expected to launch in June 2021.

UniCredit Hungary is prepared to take part in both the IT connectivity tests and the market acceptance tests in order to meet the requirements of the enhanced KELER system.