In December 2020, KELER Kozponti Ertektar Zrt. (KELER Central Securities Depository Ltd.) (KELER), the central depository of Hungary, was granted an authorisation under the Central Securities Depositories Regulation (CSDR Regulation) and can now offer its clients services supporting an efficient and secure securities market as a central securities depository operating under unified European regulations.
The main objectives of the CSDR Regulation on central securities depositories are to increase the security and efficiency of securities settlement infrastructures in the European Union and to create an even playing field between the central securities depositories. In addition to central securities depositories, the CSDR Regulation will soon introduce new provisions governing a very strict settlement discipline for a broad range of capital market operators.
The new regulation seeks to establish a uniform regulatory framework for the authorisation, client access and risk management of central securities depositories, introducing standard capital requirements and prudential rules in order to maintain their solvency and also rules on operation and governance, and the provision of services. In this context, the CSDR requires all EU central securities depositories to initiate a new authorisation procedure. KELER, which operates as a specialised credit institution according to the Hungarian legislation, was granted a CSDR authorisation by the Central Bank of Hungary (MNB) for its ancillary banking services as a central securities depository and credit institution.
KELER has managed to take a significant step towards a more flexible, safer and more transparent operation not only of the Hungarian but also of the European capital market.
By Eszter Kamocsay-Berta, Managing Partner, KCG Partners Law Firm
