Bank Austria Creditanstalt (BA-CA) reports from Zagreb that the Securities Depository Agency (SDA) – the local CSD – has reached an agreement with the Croatian National Bank (CNB) enabling it to participate in the local RTGS system.
“The local settlement rules require a pre-funding on Settlement Date minus 1,” says a BA-CA spokesman. “The practice was adopted due to payment system inefficiency and SDA’s ability to participate only in the clearing system, consequently preventing same-day receipt and delivery of funds.”
Participation in the RTGS system will overcome this shortcoming. It is expected to be in place by the end of 2004 or the beginning of 2005 at the latest. “The market-wide preparation and testing should be performed in the first half of 2005, whilst an official live-date of the new settlement procedure is expected for 1 July 2005,” says the BA-CA spokesman. “SDA’s participation in the RTGS system will bring numerous benefits to the market: abolition of pre-funding requirements, same-day funds, enhanced risk management, increase of contractual settlement threshold, shortening of settlement cycle, market-wide STP abilities.”