Bank Handlowy w Warszawie, Citigroup’s subsidiary in Poland, announced today that it has introduced a new account structure and settlement procedures for the international broker-dealer community. The bank says this represent a stride towards implementation of article 34a of the Polish Securities Law, expected to take effect early 2003.
Article 34a permits international brokers to intermediate securities transactions executed on the Warsaw Stock Exchange and settle them with the underlying investors on the basis of settlement instructions. Following its introduction, international broker-dealers will now be allowed to establish one trading/clearing account with their local sub-custodian, which will be dedicated to their clients’ clearing business only, as opposed to the present practice of using segregated transition accounts for each underlying investor.
“We are delighted to offer our clients a significant reduction in administrative work, an improvement in control functions and savings in time,” says Agnieszka Dydycz, Securities Country Manager for Bank Handlowy. “For example, fewer accounts will need to be opened and reconciled, such as segregated clients’ trading accounts, and reporting requirements will be greatly streamlined. Clients should also realize higher STP rates as a result of our new procedures.”
Although the practical implementation of Article 34a requires further changes in the market (such as securities lending for fails coverage), Bank Handlowy says it has decided to make this account structure available immediately to ensure maximum benefits and efficiencies to its customers.