By the request of concerned custodians - including UniCredit Bank Hungary Zrt.- the Association of Investment Service Providers (BSZSZ) convened a meeting with the participation of the Hungarian CSD, KELER on the 6th of November, 2019. The aim of the talks was to provide updated information to the market about KELER’s KSDP (KELER Service Development Program) project focusing on its plans regarding CSDR compliance.
At the meeting, KELER revealed some further details about the timeline of developments related to the Settlement Discipline as follows:
- Based on the application already submitted to the Central Bank of Hungary, KELER expects that the second phase of the licensing procedure can be started in January 2020.
- The planned implementation date of CSDR related developments remains March 31, 2021. Further communication regarding the launch is expected at the beginning of December 2019 at a market wide forum where KELER will announce the detailed timeline of the CSDR project.
- An updated Service Description Document, including recently finalized development plans, will also be available after this forum in early December.
At the meeting, representatives of KELER responded to questions raised by market participants regarding the procedures which will come in place after the implementation of the Settlement Discipline requirements. Besides the already communicated changes, the following has been confirmed:
- Hold and release will be supported by KELER and it will be communicated via MT530 /sse.030 messages.
- As per current status, Partial release will not be available, however in line with the request of market participants, KELER will further investigate the feasibility of this service.
- The FIRDS database of ESMA will be used for determining the list of CSDR eligible securities.
- The process of penalty reporting and investigation will be in line with ECSDA guidelines.
- The reference price to be used for penalty calculation will be the price of the most relevant market.
- KELER will provide information on the penalty amount on the 15th business day of the following month in a PREA message. Penalty collection and distribution will be managed by PFOD transactions.
Impact on investors: Market participants and investors can expect to receive an update on the status of KELER’s CSDR related plans in December 2019.