Due to integration into common European platform for securities settlement and enforcement of common standards regarding the implementation of corporate actions, the registry accounts, maintained in Slovenia by KDD, are being terminated.
LEGAL DEADLINE FOR TRANSFER OF SECURITIES FROM
REGISTRY ACCOUNTS THAT ARE BEING TERMINATED HAS EXPIRED
The Book Entry Securities Act (ZNVP-1) has provided holders of securities with a relatively long period of time in which they were to transfer their securities to accounts maintained by KDD members (financial intermediaries). The deadline for legal entities expired on 30 Sept 2016, while for natural persons it was set to 1 Jan 2017. With the expiry of the above deadlines, KDD terminated the registry accounts.
The registry accounts had to be terminated due to the integration into a common European platform for securities settlement and enforcement of common standards as regards the implementation of corporate actions.
KDD was obliged to integrate its settlement system into a single, pan-European platform for securities settlement called T2S and owned by the Eurosystem (the European Central Bank and the national central banks of the member states whose currency is the euro). It was obliged to do so in the beginning of 2017. The adaptation to T2S requires, among other things, the introduction of uniform standards for payments from securities and for other corporate actions regarding securities (CASG/CAJWG). These standards anticipate that the information and cash flow between the issuer and the final beneficiary from securities and vice versa runs through a central depositary (KDD) and its members. This shall be enabled by contractual links between the issuer and KDD, between KDD and members, and between KDD members and their clients. The contractual links required for the implementation of corporate actions according to CASG/CAJWG were non-existent in registry accounts.
Therefore, in order to implement the above mentioned standards and to successfully integrate into the common settlement system, the decommissioning of registry accounts and the establishment of proper contractual links were required.
IMPORTANT: THE TERMINATION OF REGISTRY ACCOUNTS DOES NOT ALSO CAUSE THE TERMINATION OF SECURITIES. THIS MEANS THAT THEIR HOLDERS CAN STILL TRANSFER THEM TO ACCOUNTS MAINTAINED BY KDD MEMBERS OR WAIVE THEM UNTIL THEY ARE TRANSFERRED TO A DEPOSIT-IN-COURT ACCOUNT. TRANSFER OF SECURITIES TO A DEPOSIT-IN-COURT ACCOUNT SHALL BE MADE ON THE BASIS OF A LEGALLY BINDING COURT DECISION IN A NON-LITIGIOUS PROCEDURE REGARDING DEPOSIT. KDD SHALL SUBMIT PROPOSALS FOR TRANSFER OF SECURITIES TO DEPOSIT-IN-COURT GRADUALLY, TAKING INTO CONSIDERATION THE CAPABILITY OF COURTS.
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