The Hungarian Securities Market Practice Group (NSMPG) held a meeting yesterday regarding the strategic plan recently announced by KELER, the Hungarian CSD. At the meeting, KELER summarized the developments to date in the projects defined in the plan and provided details on the introduction of partial release, which is part of the developments planned by the CSD for 2023-2024.
Market participants attending the meeting were given a presentation on the proposed process for the partial release function. On this basis, they discussed the extent to which the proposal was in line with current market practice.
According to plans the partial release process will be based on current T2S practices. It can be initiated by the seller via MT530 SWIFT instruction on the intended settlement day. Partial settlement can only take place if both parties authorize the function in their settlement instructions and there will be several time-windows for the process during the day which will be defined by KELER in advance. In the case of DVP type instructions, the buyer must have at least financial coverage calculated for the quantity of securities to be partially settled. KELER will provide relevant status and confirmation messages, the type and list of which are still to be confirmed.
Besides the above there are still some outstanding issues that need to be resolved through further market discussions. For example, the issue of partial release at the request of the buyer is a topic for agreement, as is the need for a change in the penalty calculation currently used by KELER.
Further topics, like introduction of the SWIFT ISO 20022 communication between KELER and its clients in case of securities settlement and SWIFT ISO 15022 message validation by KELER were also discussed by the participants.
Impact on investors: For information purposes