On 23 February 2017 KELER ( the Hungarian CSD) held a meeting for the market participants to present on one hand the roadmap of its new system’s (BaNCS) implementation and on the other hand the details of the changes in KELER’s document titled “Service Description in connection with the Introduction of TCS BaNCS system” in comparison to the earlier published version. This document covers in details the services KELER will provide once BaNCS, its new system, will be implemented (the planned go live date is 03 July 2017).
According to the plans of KELER, prior to go live date of BaNCS there will be a market test in May 2017 after which the decision to go ahead with the system implementation or not will take place. In case of a positive decision there will be a code freeze at KELER in June 2017 and BaNCS will be launched on 03 July 2017.
In regards to the scope of services available in BaNCS from its go live date , KELER has revised and modified certain areas in comparison to the previously (in 2016) published service description document. Among others, key changes occurred in the fields of corporate actions and settlements.
In regards to corporate actions, with BaNCS system KELER will continue providing the same limited services as today under its T2S BCP solution in line with its document titled ”KELER T2S Settlement Process”. Thus, market claims and transformations will be applicable only for fixed income instruments where the underlying transaction is an EUR DVP or a cross CSD transaction with the Austrian CSD (OeKB). Market claim and transformation services shall be extended also for equities and free of payment (FoP) as well as HUF DVP transactions by end of 2017 , as European Central Bank (ECB) provided a derogation to KELER to provide the full scope of these services until end of this year. Thus, to be able to provide market claim and transformation in accordance with T2S CA standards during the course of 2017 certain amendments to the Hungarian laws and regulations (for example taxation) will need to be effected.
As to the settlements, under revised services KELER postponed the introduction of a set of services, among others DCP services, linkage, reservations, earmarking, RWP/DWP, etc., thus these will not be introduced at BaNCS implementation date only at a later stage, however there is no specific date set for that, yet.
Impact on investors: In comparison to the previously announced services to be introduced by KELER with BaNCS certain services will not be available for the market participants and as such ultimately for their clients at the time of BaNCS implementation date: 03 July 2017.