On 17 August 2020 Central Securities Depository of the Slovak Republic, a.s. (CDCP) approved new Rules of Operation, including relevant Executory Decrees. These amendments will enter into force on 7 September 2020.
The following parts were modified as follows:
Part IV: New Article 7 - Transmission of information on the convening of a General Meeting.
In accordance with SRDII an issuer which has its registered office in a EU Member State and whose book-entry shares are admitted to trading on a regulated market situated or operating within an EU Member State and are administered by CDCP in the issuer’s register, has to provide CDCP with information on the convening of a General Meeting. The CDCP shall transmit a notice on the convening of a General Meeting to the shareholders (by publishing it on the CDCP web page), to participants, each intermediary or authorised participant (through the information system of the CDCP). The CDCP shall transmit a notice on the convening of a general meeting without delay after receiving the notice, by the end of the business day on which the CDCP received the notice at the latest. In case the CDCP receives the notice on the convening of a general meeting from the issuer after 4pm, it shall transmit the notice by 10 am on the following business day at the latest. All intermediaries shall forward the notice to shareholders of the issuer registered in their books without delay.
Part IV: New Article 8 - Confirmation of entitlement to exercise shareholders rights in a general meeting
Based on issuer’s request, the CDCP provides to the issuer the list of owners’ accounts including the information on shareholder’s identification required to confirm the entitlement of the shareholders to exercise their rights in a general meeting. The list of shareholders includes information on shareholders whose owner account is administered by the CDCP or by a member of CDCP (such as UniCredit).
Part IV: New Article 19 - Disclosure of information regarding shareholder’s identity
The issuer with registered office in a EU Member State and whose shares are admitted to trading on regulated market situated or operating within a EU Member State may require from the CDCP the provision of information on identity of its shareholders having shares on registered capital of the issuer, or voting rights higher than 0.5%. CDCP shall automatically disclose to the issuer also the identity of the shareholders from the participant/member registry (registered in owners accounts).
Request for shareholder’s identification: If required by the issuer, regardless of the specified 0.5% threshold, the CDCP shall forward the request for disclosure of information on shareholders’ identity to each CDCP participant which maintains holder’s account ( nominee client’s account). The CDCP shall transmit the request without delay after receiving it, but no later than the close of a business day on which the request was received. In case the CDCP receives the request after 16.00, the latter shall be transmitted no later than 10.00 am of the next business day. The participant shall disclose without delay to the issuer the identification data of the shareholders or other intermediary in the chain. If another intermediary is registered as the shareholder in the books of the participant, the participant shall transmit the request to disclose the information on the shareholders without delay. Each intermediary in the chain shall follow the same procedure.
Response to the shareholder’s identification: The CDCP or the participant of the CDCP (e.g. UniCredit) shall send the response of the shareholder’s identity disclosure to the issuer without delay.
The CDCP shall send identification data of shareholders registered in the CDCP registry, or in the books of the participants, who have shares on registered capital or voting rights higher than 0.5% to the issuer primarily in electronic form. Electronic delivery has to fulfil the safety requirements.
PART V: New Article 9 - Shareholder’s identification, transmission of information and exercise of shareholders’ rights in connection with account administration for participant
The CDCP shall transmit requests, notices and information from the issuer to the participants through the CDCP information system or through an authorised participant without delay. An authorised participant is obliged to provide/transmit requests/information to the participant for which the account is administered without delay. The CDCP is entitled to obtain, to the extent necessary, data from the books of the participant.
PART VI: Change in Article 2- 20 - General characteristics of settlement services
In regards to the penalty mechanism, the CDCP has formulated how instructions are to be forwarded to T2S, after matching, in accordance with imposed reservation tags (Hold/Release mechanism).
PART VI: Change in Article 23 - Settlement of stock-exchange, other and special trades
PART VI: Change in Article 2- 20 - General features of the settlement services
The Guarantee Fund used to settle the stock-exchange trades, until now operated by Bratislava Stock Exchange (BSSE), will be processed directly by the CDCP through Dedicated Cash Accounts of the involved participants. The Guarantee Fund remains with the BSSE.
PART VI: Change in Article 30 - Settlement instruction recycling
The CDCP will automatically cancel matched and not settled settlement instructions, after sixty business days. The period is counted from the intended settlement day of the instruction, or from the last status change of these instructions. This provision is in line with T2S rules and will become valid since October 5, 2020.
Further minor changes of Operating Rules and Executory Decrees concern simplification of the KYC process, exceptions for governmental entities when submitting documentation, or changes in orders for lien registration.
Impact on investors:
The CDCP has amended its rules mainly in relation to SRDII. According to the new Shareholder’s identification rules, the CDCP will disclose shareholders in owners accounts and will forward issuers’ requests to its participants (like UniCredit) for disclosure in holders’ accounts. The CDCP and its participants will provide the disclosure information directly to the issuer. Participants will forward the request further to the next intermediary in the chain. Intermediaries or clients will have to provide the information on the shareholder’s identification directly to the issuer.
The new rules define the obligation for the issuers to inform the CDCP on the convening of a General Meeting. The CDCP further notifies its participants by Notice of General Meetings. Until now issuers did not have the obligation to inform the CDCP; information about GM’s were published in the nationwide press and on their websites.
New recycling rules for matched trades are in line with the changes in T2S
The link to the Rules and Decrees (version in English ) is the following: