Participant Meeting November 29 th , 2019 Agenda 1. Business Facts - PowerPoint PPT Presentation

OeKB CSD Participant Meeting November 29 th , 2019

Agenda 1. Business Facts & Figures 2. Upcoming T2S Releases 2020 3. Report 5 th Meeting of the User Committee 4. Project Settlement Discipline 5. T2/T2S Consolidation 6. Project Shareholder Rights Directive 7. AOB November 29th, 2019 2

1. Business Facts & Figures

1. Business Facts & Figures as of 31.10.2019 November 29th, 2019 4

2. Upcoming T2S Releases 2020

2. Upcoming T2S Releases 2020 (1/3) T2S Problem Release 3.3  TEST January 17 th , 2020  PROD February 15 th , 2020  Problem Tickets only, no impact on participants November 29th, 2019 6

2. Upcoming T2S Releases 2020 (2/3) T2S Major Release 4.0  TEST May 15 th , 2020, PROD June 13 th , 2020  6 Change Requests CR Number CR Description Document Reporting of Beneficial Ownership indicator in allegements, status messages and T2S-0671-SYS Link settlement confirmations During partial settlement windows, recycling should only be triggered after an T2S-677-SYS Link optimisation attempt T2S should allow and process already matched instructions with deviating settlement T2S-658-SYS Link parameters on DELI and RECE legs T2S-668-SYS Provide the T2S reference of the linked instructions preventing settlement Link T2S-689-URD New process to maximise settlement of transactions at DVP cut-off Link T2S-0719-SYS Common Reference Data Management for T2-T2S Consolidation – Modified Objects Link November 29th, 2019 7

2. Upcoming T2S Releases 2020 (3/3) T2S Minor Release 4.2 & SWIFT Standard Release 2020 TEST October 30 th , 2020, PROD November 21 st , 2020  8 Change Requests  CR Number CR Description Document T2S-0654-URD T2S Penalty Mechanism Link T2S-715-URD Optimisations to the T2S Penalty Mechanism’s (CR654)user requirements Link T2S-0684-SYS Handling for outbound messages with amounts exceeding 15 digits Link T2S-0695-SYS Trade date to become mandatory within a settlement instruction (sese.023) Link T2S-0703-SYS Camt.050 exchanged between T2S and CLM Link T2S-0713-SYS Alignment of T2S Messages with ISO Maintenance Release 2018 - 2019 Link T2-T2S Consolidation and ECMS will require an internal communication within the T2S-0702-SYS Link consolidated platform T2S-0718-URD Daily provision of Euro Foreign Exchange Rates for the penalty mechanism Link November 29th, 2019 8

3. Report User Committee

3. Report 5 th Meeting of the User Committee (1/1)  Meeting took place on November 14 th , 2019 Agenda : 1. Business Facts & Figures 2. Update on projects and activities of OeKB CSD 3. Shareholder Rights Directive 4. Miscellaneous  Meeting Protocols will be available on My OeKB CSD – User Committee November 29th, 2019 10

4. Settlement Discipline

4. Settlement Discipline (1/12) Measures offered by OeKB CSD to prevent Settlement Fails  Real-time matching  Tolerance level  Bilateral cancellation facility  Hold and release mechanism  Recycling of failed settlement instructions  Partial settlement  … OeKB CSD already offers these measures to its participants. November 29th, 2019 12

4. Settlement Discipline (2/12) Calculation of Penalties  OeKB CSD will calculate cash penalties for each (free of or against payment) settlement instruction that:  failed to settle on its intended settlement date (SEFP); or  matched after its intended settlement date (LMFP).  The calculation will be done on a daily basis for each business day that a instruction fails to settle after its Intended Settlement Date (ISD).  Concerned securities  CSD-eligible MiFID/R securities ("virtually all securities"),  traded on an EU-trading platform or cleared by an EU-CCP. Excluded are shares whose main trading platform is outside of the EU. November 29th, 2019 13

4. Settlement Discipline (3/12) Calculation of Penalties  reference price ("Most relevant Market" or "Highest Turnover" in accordance with ESMA FIRDS DB) type of security (CFI)   penalty = penalty rate * reference price * units/nominals Penalty Rate – simplified outline shares, liquid 1.0 BP shares, illiquid 0.5 BP shares, growth market 0.25 BP government bonds, provinces, central banks, 0.1 BP multilateral development banks, EFSF, ESM, … other bonds 0.2 BP bonds, growth market 0.15 BP other 0.5 BP lack of cash overnight reference rate of the particular central bank (>0) November 29th, 2019 14

4. Settlement Discipline (4/12) Daily Settlement Fails Reports OeKB CSD will provide a "new settlement fails penalties report" and a "modified settlement fails penalties report" on a daily basis:  T2S-DCPs: SWIFT semt.044 or flat file  preliminary version of the description of flat file available here  reporting of new penalties – will be sent by 11:30 a.m. CET  reporting of modified penalties – will be sent by 12:00 a.m. CET  T2S-ICPs: SWIFT MT537 draft version of the description available in the near future   Settlement Client GUI (including Excel downloads)  November 29th, 2019 15

4. Settlement Discipline (5/12) Overview of the First Month November 29th, 2019 16

4. Settlement Discipline (6/12) Monthly Aggregated Amounts Report OeKB CSD will provide a "monthly aggregated amounts report": Sum up of all cash penalties for each participant (party BIC), per currency and counterparty.  T2S-DCPs: SWIFT semt.044 or flat file  preliminary version of the description of flat file available here will be sent by 12:45 a.m. CET on the 14 th business day of the month   T2S-ICPs: SWIFT MT537 draft version of the description available in the near future   Settlement Client GUI & Excel downloads  sum per customer reference  net aggregated amount for PFOD  November 29th, 2019 17

4. Settlement Discipline (7/12) Overview of the Month Following the Settlement Fails November 29th, 2019 18

4. Settlement Discipline (8/12) Monthly Appeal Period  Appeals may be lodged by participants for important reasons at any time during the calendar month, as from the moment of computation and reporting of the penalty, and until (and including) the 10 th business day of the following month.  Each time that an appeal is accepted and a change is applied to a penalty, it will be reported on the following business day. November 29th, 2019 19

4. Settlement Discipline (9/12) Monthly Payment (Collection & Distribution) On the 17 th business day of the following month, OeKB CSD will collect and distribute the penalties net  aggregated amounts  one booking per participant (party BIC). Ahead of the 17 th business day, OeKB CSD will create PFOD instructions to receive the cash amounts  from its participants that have to pay a net aggregated amount. OeKB CSD participants must have adequately funded their DCA, in order for the PFOD to timely settle on the 17 th business day. The PFOD settlement will debit the OeKB CSD participants’ DCA and a   credit OeKB CSDs’ DCA. Ahead of the 17 th business day, OeKB CSD will create PFOD instructions to pay the cash amounts to  participants that will receive a net aggregated amount. The PFOD settlement will debit OeKB CSDs’ DCA and a   credit the OeKB CSD participants’ DCA. November 29th, 2019 20

4. Settlement Discipline (10/12) Moving target  Enters into force on September 14 th , 2020  postponement possible  Art.19 of Regulatory Technical Standards (RTS) on Settlement Discipline  CCPs have to collect penalties from and distribute penalties to their Clearing Members  EACH seeks to convince European Commission to allow the respective CSD to collect and distribute penalties also for the settlement fails of CCPs and their Clearing Members November 29th, 2019 21

4. Settlement Discipline (11/12) OeKB CSD Communication  Infomail – Settlement Discipline #1:  slides  FAQs  draft version of the description MT537  Participant Meeting: updates in 2020  November 29th, 2019 22

4. Settlement Discipline (12/12) Q&A Any questions?  You can also send your questions to kurt.kerschbaum@oekb-csd.at at a later time. November 29th, 2019 23

5. T2/T2S Consolidation

5. T2/T2S Consolidation (1/1)  A project of the Euro Central Banks  Go Live: November 2021  Aspects for OeKB CSD:  OeKB CSD will continue to offer conversion of statements of accounts (camt.053 from T2S-DCA into MT940) for its participants.  Collection and distribution of income will continue to take place on T2S-DCAs. November 29th, 2019 25

6. Project Shareholder Rights Directive

6. Project Shareholder Rights Directive (1/9) SRD II in a Nutshell  Shareholders Rights Directive II (EU) 2017/828 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32017L0828  Implementing Regulation (EU) 2018/1212 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32018R1212  National (Austrian) Implementation https://www.parlament.gv.at/PAKT/VHG/XXVI/I/I_00624/index.shtml Top left hand quadrant: Topics concerning all Intermediaries, including CSDs November 29th, 2019 27