BA-CA HVB Continue To Lobby For Changes To Guarantee Fund In The Czech Republic

HVB Custody in Prague say they are continuing to lobby against the terms of the guarantee fund proposed by the market authorities in the Czech Republic in the new Capital Markets Act. HVB Custody, other sub custodians in Prague, the

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HVB Custody in Prague say they are continuing to lobby against the terms of the guarantee fund proposed by the market authorities in the Czech Republic in the new Capital Markets Act.

HVB Custody, other sub-custodians in Prague, the Capital Market Association (AKAT) and the Czech Banking Association have all approached the Ministry of Finance to request amendments to the Act designed to create what HVB calls “a more level playing field under the Act.”

HVB says the Ministry is now considering seriously modifications of the legislation to ensure the annual contribution to the Guarantee Fund is NOT calculated on assets of clients who do not have the right to be compensated from the Fund. Under the current interpretation, institutional investors must contribute and yet have no rights to claim against the Guarantee Fund.

In addition, HVB says any assets registered in the name of clients at the SCP – the new CSD planned for the Czech Republic – or a foreign CSD, or any other foreign securities registry, should not serve as base for contribution payments as “client assets.” At present, all “client assets” are form part of the base for calculating the contribution to the Guarantee Fund.

Thirdly, HVB wants to ensure that monies received by a broker, which is either a bank or branch of a foreign bank, are NOT deemed to be “client assets” if kept on accounts insured according to the appropriate laws and regulations

“Our main goal is to push and lobby for such an amendment to the Act which would create a less expensive environment for our custody clients,” says a spokesman for BA-CA/HVB.

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