On 24 October 2016 KELER announced that the go-live date of its new system, which was planned to be 21 November 2016, will be further postponed. At the same time, no new implementation date has been announced for the time being.
As a result of the postponement of the implementation of the new system, it has become necessary for KELER to establish a BCP solution for T2S processing. Thus, on 26 October 2016 the Hungarian CSD held a meeting for the market participants to present its updated BCP solution in case KELER needs to support T2S operations with its current system. As communicated earlier, under the BCP scenario KELER will provide minimum T2S functionalities through manual processing. In addition to the T2S BCP details that have already been communicated, the following was further disclosed:
- the place of matching will always be in KELER, regardless of the settlement currency;
- the matching criteria will remain the same as of today, due to the fact that KELER's current system is not able to handle the new matching criteria (e.g. trade date, additional and optional matching fields);
- the tolerance level will remain the same as of today, i.e. HUF 5,000 and EUR 20, respectively;
- KELER will enrich the instructions with the necessary T2S elements prior to sending them to T2S and for this purpose it will set default options in its rulebooks that will be followed for the enrichment process (i.e. for trade date, additional and optional matching fields);
- KELER will forward EUR transactions to T2S already in matched status;
- KELER will send the instructions to T2S for settlement manually via T2S GUI;
- KELER will send only one settlement confirmation for EUR settlements (which is a change in comparison to its previous plan where it intended to send two confirmations in such cases), however the settlement confirmation will not contain the T2S reference number (MITI);
- KELER will set two separate deadlines for HUF and for EUR settlements, for the latter that will be at least 30 minutes prior to the T2S settlement deadlines;
- under the T2S BCP market claims / transformations / buyer protection will be handled by KELER manually;
- market claims will be partially introduced for fixed-income instruments only - under the T2S BPC KELER is looking at two possible options, only one of which will be introduced, namely either i) for all fixed-income OTC pending trades (both in HUF and in EUR) or ii) only for fixed-income OTC pending trades in EUR; no decision has been taken yet which will be the chosen option
Currently the above T2S BCP has not yet become final, it will be presented by KELER to ECB in the course of next week and is subject to ECB's approval. Once the approval is granted, KELER will provide the market participants with a detailed operational and technical description of the T2S BCP and will update its T2S service document.
Impact on investors: If accepted by ECB, KELER's T2S BCP will have the following implications to investors: (i) the matching criteria, including tolerance level handling, will remain the same as it is today and the new matching criteria such as trade date, additional and optional matching fields will be disregarded for matching; (ii) there will be different deadlines set up for EUR and HUF settlement; (iii) market claims will be introduced partially, only for fixed income instruments, and will be handled manually. Further details on impact on investors will be available once the updated T2S service description document is available by KELER.