The Czech Parliament approved an amendment to the Capital Market Act 256/2004, which has modified the articles coherent to the CSD introduction. The amendment is now off to the Senate and the President for approval.
Under the amendment, the Czech Securities and Exchange Commission (SEC) is enabled to provide the CSD with a conditional licence. “This is a crucial point as there has been a timely contradiction between reality and the requirements of the Act, says HVB Relationship Manager Vit Cermak. “The current Act stipulated that SEC would licence the new CSD only when all testing with its participants are finalized successfully, on the other hand it was not realistic to expect the CSD participants to launch testing with a non-licensed entity.”
Further to the new Act, the settlement system will be enabled to run “individual registration of assets” – important for settlement and safekeeping of foreign listings traded on the Prague Stock Exchange (PSE), the CSD will have the right to contact a issuing company before it starts record-keeping of the issue and each company issuing dematerialised securities is obliged to enter an agreement with the CSD.
By the end of August 2005, the Project on the Data Transmission shall be handed over to the SEC by UNIVYC. According to UNIVYC, the transmission – from a technical point of view – will be a question of an extended weekend only. In the next step, UNIVYC is planning to submit the results of the acceptation-tests of main modules to the SEC by mid October, 2005. The latest information is for an unofficial go-live of the new CSD will be the beginning of the second quarter of 2006, according to Cermak.