Operations of CDCP
Operations of CDCP are ruled by the Act No.566/2001 Coll. on Securities and Investment Services as amended (further referred to as “the Act”) and by the Rules of Operation of CDCP. Rules of Operation of CDCP are approved by depository’s regulator the National Bank of Slovakia and they are binding on CDCP, members of CDCP, issuers of book-entry securities registered in the CDCP, the stock exchange and other entities requesting the services of the CDCP (Rules of Operation, Part I, Art. 4.1).
REGISTRATION OF ISSUES OF BOOK-ENTRY SECURITIES
One of the CDCP’s core activities is the registration of issues of book-entry securities. The central depository currently registers all types of share issues, bond issues (including mortgage bonds), co-operative units and the units of open-end unit trusts. What can also be registered in the central depository are the book-entry deposit certificates, treasury bills, coupons etc., as well as all types of immobilised securities.
Upon registration of the first issue, the central depository opens for an issuer the issuer’s register that contains information on the issuer and on individual securities. An issue is registered in the issuer’s register upon the issuance of book-entry securities.
At the request of an issuer who has issued registered paper shares, the CDCP administers a list of shareholders for the registered paper shares. On this list, the central depository records the changes of shareholders, changes in the shareholders’ data and changes in the issuer’s identification.
ASSIGNMENT OF ISIN CODES
The CDCP performs the activities of the National Numbering Agency for Slovakia, which means that it assigns, alters and cancels the ISIN codes in compliance with the ISO 6166 Standard. An ISIN code is assigned by the CDCP to every issue of book-entry securities.
ADMINISTRATION OF SECURITIES ACCOUNTS
In the system of securities registration, the CDCP uses two types of securities accounts. They are the owner’s account and the client account of a member. A special type of account is the holder’s account of a member – the foreign central depository.
The owner’s account contains primarily data on the account owner and on securities kept in this account. The account owner is at the same time the owner of securities registered in this account. The members of the central depository open owner’s accounts for their clients. Directly in its registration, the central depository opens an owner’s account for a member where information is kept on the securities owned by the member. In its registration, the central depository shall open an owner’s account also for state authority acting on behalf of the Slovak Republic or for the National Property Fund. For other persons, an owner’s account can be open only at a member’s request.
In a member’s client account, the central depository registers data on securities which owners are registered by the member. The member itself does not own the securities kept in its client account; the owners of such securities are recorded in the member’s registration.
In a holder’s account of a foreign central depository, the CDCP registers data on securities whose owners are registered with the foreign central depository in a registration created in compliance with the law based on which the foreign central depository is founded.
CLEARING AND SETTLEMENT OF TRANSACTIONS IN SECURITIES
The CSD performs the clearing and settlement of stock exchange and over-the-counter transactions in securities. The settlement of securities is performed on the 'delivery versus payment' basis (DvP); the central depository’s system of clearing and settlement is based on the standard models BIS Model 1 and BIS Model 2.
In the clearing of transactions, it is possible to use the ‘gross’ or the ‘netting’ method, with the latter being available only for clearing of financial obligations and claims. As a standard, the stock exchange trades are settled by the netting method and duration of the settlement cycle for stock exchange transactions is T+3. For OTC transactions, duration of the settlement cycle is not limited and these transactions are primarily settled on a gross basis.
In addition to the ‘DvP’ settlement, it is also allowed to deliver securities without a financial settlement. Such delivery is usually performed through a transfer directly in a member’s or the CDCP’s registration. The central depository also performs the clearing and settlement of the public offers to take over, which are organised by the BSSE.
ADMINISTRATION OF THE REGISTER OF PLEDGES OVER SECURITIES
The CDCP keeps a special register of pledged securities – the register of pledges. Following an authorised person’s order, in this register the CDCP records the emergence, change and termination of contractual and legal pledges over dematerialised securities. In the register of pledges is also registered the contractual and legal pledge over securities in paper form. The CDCP issues a statement of the register of pledges based on a request. Information from the register of pledges is available on the CDCP’s website; this information, however, cannot be used for legal purposes.