SRSS Local Currency and Capital Markets Initiative: Hungary CSD - Identifying CSD linkage model

Project ID: 73915

Project title and assignment: SRSS Local Currency and Capital Markets Initiative: Hungary CSD - Identifying CSD linkage model

Contract description: The overall objective of the project is support the integration and improvement of cross border trading and post-trade environment of the CEE markets through the establishment of CSD links. The specific objective of this assignment is to provide consultancy services to KELER CSD for the operational preparation of its link building exercise with4 target markets. The project will provide KELER with a better understanding of the most efficient approach to establishing targeted CSD links and develop a detailed implementation roadmap applicable to KELER.

The target markets are Austria, Romania, Bulgaria, and Czech Republic.

Provided services:

1. a) Identify and analyse the targeted CSDs’ service description and prepare a service description/requirements of the direct links.
2. b) Conduct analysis focusing on the pre-requisites for creating functioning linkages that creates an efficient cross-border post-trade environment and will cover the following:

• Examine the targeted CSDs existing infrastructure in terms of the following:

• Core system and its adaptability for a cross-border link;
• Standards used and connection between CSD and Brokers,
• Messaging systems in place (SWIFT, FIX protocols, etc).
• Mapping CSDs settlement cycles, working hour’s overlap, BIS models, determine DVP/FOP merits.
  • Examine the targeted CSDs rules and membership criteria and define what is needed to facilitate cross-border settlement.
  • Preparation of market profiles that contain relevant information about the concerned securities markets (market infrastructures, settlement procedures, asset services (i.e. corporate action), disclosure requirements etc.)
  • Propose CSD Link design/set up covering business, operations, IT and governance. The CSD Link design must be stable, secure, cost effective and in compliance with the EU and domestic legislations.

1. c) Prepare a timed implementation plan together with KELER based on the output activities taking into account the following:

• The order of priority markets KELER intends to establish the links
• Providing a clear set of feasible and realistic actions for implementation

Duration: 8 months