This week, the ASF’s Board has approved the modification to the „Regulation No. 13/2005 regarding the authorization and functioning of the central depository, clearing houses and central counterparties“ and to the paragraph (1) article 9 of „Regulation No.5/2010 on the use of global accounts system, application of the mechanisms with and without pre-validation of financial instruments, securities lending, collateral and short sale transactions“ .
The most relevant changes to the “Regulation No. 13/2005 regarding the authorization and functioning of the central depository, clearing houses and central counterparties“ refer to:
- Definition of the direct electronic connection: the connection between two operators of clearing and settlement systems in which an operator becomes participant to the clearing-settlement of another operator on the same terms and conditions applicable to any other participant to the clearing – settlement of financial instruments managed by the latter.
- Definition of the indirect electronic connection: the agreement between an operator of the clearing and settlement system and a third party, other than an operator who is participating in the clearing-settlement of another operator. Such a connection is determined by an operator clearing and settlement system to facilitate the transfer of financial instruments by its participants from participants of another operator.
- The Central Depository may keep individual accounts opened in the name of the beneficial owners or global accounts opened by the participants.
- Participants on the Central Depository system have the obligation to open and keep subaccounts for the own clients and to record on a daily basis the holdings for each client.
- The subaccounts may be:
- individual accounts opened in the name of the beneficial owners, or
- global accounts in the name of other entities which are authorized to open financial instruments for their clients.
The change on the paragraph (1) article 9 of „Regulation No.5/2010 on the use of global accounts system, application of the mechanisms with and without pre-validation of financial instruments, securities lending, collateral and short sale transactions“
- The Central Depository shall provide appropriate technical support for transmission by participants to the central depository system of reporting according the Capital Market Law 297/2004 (disclosure reports) and for daily reconciliation. If they themselves do not have the necessary information to identify the owner of the shares or, where appropriate, beneficial owner, the participants in the central depository system will request the necessary information from their clients, who have the obligation to provide this.
Impact on investors: The amendments to the „Regulation No. 13/2005 regarding the authorization and functioning of the central depository, clearing houses and central counterparties“ and to the „Regulation No.5/2010 on the use of global accounts system, application of the mechanisms with and without pre-validation of financial instruments, securities lending, collateral and short sale transactions” are aiming to facilitate the transfer of financial instruments between different markets.