Postponement of the penalty regime in Hungary

UniCredit Bank Hungary Zrt.
Tue, 28/06/2022

The Hungarian market in light of the local CSDR implementation

Over the last two years the Hungarian market has mainly focused on the settlement system replacement of the local CSD (KELER) and the preparation for the CSDR.

In terms of the penalty regime, Hungary has been in a very unique situation, as the regime introduction had been postponed to until 2 May 2022. The implementation was preceded by a month-long dry run period in April during which penalties were calculated and reported based on transactions of the live environment.The penalties as of May 2022 were calculated and distributed according to the schedule of the international penalty calendar and this was the first time in Hungary that penalties for failed or late settled OTC transactions were booked.

As required by the European Securities and Markets Authority (ESMA), KELER applied the penalty regime also for the months of February, March and April, and the penalties have already been calculated retrospectively for this transitional period though they were not booked yet. Market participants will receive in July a monthly report containing the aggregated penalty items for the three months. KELER already provided the back-dated daily SWIFT penalty reports for February and March, for April an excel file containing the daily penalties has been issued as well.