KELER Central Securities Depository Ltd. (KELER), jointly owned by the National Bank of Hungary and the Budapest Stock Exchange, the only central securities depository in Hungary to ensure the operation of the back office system of the domestic capital market, successfully launched its new securities settlement system last weekend.
KELER has reached a major milestone, launching its new securities settlement system on 6 December 2021 as part of a comprehensive programme (KELER Service Development Programme, KSDP) that has been running for several years.
The KELER system will settle securities transactions (settlements) between banks and investment service providers, resulting in securities and funds reaching all investors, whether they are exchange-traded, over-the-counter (OTC) or new issues.
"Over the weekend, KELER successfully completed the first phase of a key development that has taken several years to complete, the largest IT system upgrade in decades." said Zsolt Demkó-Szekeres, CEO of KELER.
"The main objective of the programme was to create an efficient, state-of-the-art IT infrastructure based on new development foundations, using a domestic, partly in-house developer-supplier background, which, in addition to being secure and easier to operate, also meets regulatory requirements and at the same time ensures the conditions for KELER's uniform operation in accordance with European standards."
With the launch of the new system, a significant part of the service elements were implemented that are required primarily under the EU regulations governing CSDs and the related settlement discipline (CSDR, SDR), which fundamentally determine the operation of KELER and, beyond, of other capital market participants, as some of their provisions directly affect KELER's clients.
However, the new securities settlement system was only the first step in the programme, as additional elements will be added to the CSD's functions from 1 February 2022. From next February, fines will be legally binding for failed settlements among KELER participants and additional administrative measures (data reporting, records management) will be needed to strengthen settlement discipline.
Finally, the CEO added:
"I would like to thank all our customers, suppliers, partners, owners and staff for their continued support and cooperation in the framework of the KSDP, which has enabled the successful renewal of KELER. In the coming year, we will continue to develop and implement our strategy to support the development of the domestic capital market!"