The new legislative change will become effective as of 1 July 2015 however the effectivity of certain provisions will be postponed to 1 October 2015. The Securities Act implements following changes:
Improves legal framework for issuance of investment certificates
The aim is to widen the range of financial market instruments available for investors. For these reasons, it is proposed to expand the group of investment certificates issuers from only the banks to also securities dealers who meet the minimum capital requirement.
Proposes a change to full membership principle of the CSD
The amendment will introduce full membership principle. The opening of an account with the Central Securities Depository (CSD) shall be limited only to CSD members, public authorities, and major clients as deemed by the CSD as of 1 October 2015. Due to this fact securities owner’s accounts opened at the CSD for clients not stated above shall be classified as unintegrated accounts. As of 1 January 2016, securities transfers from unintegrated accounts will be allowed only via a CSD member.
Enables outsourcing certain CSD services; liability for services remains at CSD
Agent of Issue Agent of the issue is allowed, in accordance with executed contract, to represent the issuer against the Central Depository (CSD) or other members of the CSD. The Agents of Issue as specified by the CSD operational rules (e.g. CSD members, securities dealers or foreign securities dealers, Debt and Liquidity Agency (ARDAL) or other legal entities will be allowed to provide services pertaining to registration of issues.
Introduces possibility to abandon worthless securities
Private persons will be allowed to deliver free of charge worthless book entry worthless securities to the Fund of National Property in the period from 1. July 2015 till 30. June 2016.
Impact on investors: The law introduces a full membership principle and thus eliminates the possibility to open a securities account directly at CSD for non-members. In addition expanding range of financial instruments for local investors and introduces a new investment service for issuers.