Market Link Guide - Czech Republic

23.05.2019

Key features

CSD link as defined under CSDR*

Yes

Type of link

Indirect link to Czech National Bank (CNB) operated by UniCredit Bank Czech Republic and Slovakia, a.s.

Direct link to CSD Prague operated by UniCredit Bank Czech Republic and Slovakia, a.s.

a. CSD Regulation (EU) No 909/2014 art. 2 (29)


CSD

Custodian/Account operator

Name

Czech National Bank (CNB)

CSD Prague

UniCredit Bank Czech Republic and Slovakia, a.s.

FATCA GIIN

CNB: n/a

CSD Prague: n/a

938A8A.00069.ME.203

LEI

CNB: 549300DS86PEHLIYB473

CSD Prague: 315700LK78Z7C0WMIL03

KR6LSKV3BTSJRD41IF75

Country of incorporation

Czech Republic

Czech Republic

Account type

CNB: Custodian account of the agent for its clients.

CSD Prague: Segregated owner account of CBL used as omnibus account.

CNB: Customer account linked to a custodian’s client account at SKD.

CSD Prague: Mirror owner’s account.

Legal account name / holder

CNB: CUST-BVBE UniCredit Bank CSR

UniCredit Bank Czech Republic and Slovakia, a.s. as the participant at SKD system of CNB does not currently hold a segregated account for CBL.

CSD Prague: Clearstream Banking S.A.

Clearstream Banking S.A.

Operational arrangements

 Yes/NoRemarks
Settlement in T2SNo 
Settlement free of paymentYes 
Settlement against paymentYesEligible settlement currency: Czech Koruna (CZK) 
Settlement against payment in central bank money account of CBL/CBL customersNoCBL holds a cash account at the custodian/account operator. Against payment in CZK takes place on the cash account of UniCredit Bank Czech Republic and Slovakia, a.s. at the Czech National Bank.
Bridge settlementYesExcept exchange traded funds and
CSD-eligible open-ended funds.
Shaping facilityNo  
Partial settlementNo  
Settlement penalty feesNo  
Pre-matchingYes 
Back-to-back processingYes 
AllegementsYes 
Automatic compensationNo Only applicable if foreign issues are listed on the Prague Stock Exchange and registered at CSD Prague.
Registered securitiesNo Equities are mostly bearer. But there could be some registered equities when the issuers may decide to re-materialise the shares through a corporate action. Customers will be notified accordingly.
Multi Market SecuritiesYesMultilisted securities exist in the market; these are held by the local CSD on their account with Euroclear.
Lending and borrowingYes 
Proxy votingYes 
Investment FundsYesExchange traded funds and 
CSD-eligible open-ended funds.
Liquidity Hub ConnectNo  
Sale and purchase of rightsNo  
Repo servicesNo  
Market restrictionsNo 
FTTNo  
Daily reconciliationYes 
Link eligible for use in Eurosystem credit operationsNo 
Bilateral cancellationYes 

Settlement finality

CNB: Transfers in the SKD system are final and irrevocable. Cash and securities are transferred simultaneously.

CSD Prague: Securities transfers are settled on a trade-for-trade (gross) basis, with final transfer of securities from the seller to the buyer (delivery) occurring throughout the processing cycle at the CSD. Cash is transferred on a net basis, with final transfer of funds from the buyer to the seller (payment) occurring at the end of the last deliveries against payment processing cycle.

Legal arrangements

The below section is based on the legal opinions obtained by CBL that were issued on 2 May 2019 (direct operated link) and 6 May 2019 (indirect link). The information is provided for guidance only and should not be considered in isolation or as constituting a complete or definitive legal advice on any specific matter.

No insolvency proceedings against the custodian/ account operator or the CSD

Confirmed

Liability for negligence

Confirmed

Book-entry regime with in rem rights

Confirmed

No entitlement of the account operator/CSD

Confirmed

Recognition as direct CSD account-holder

CSD Prague: Confirmed

CNB: The custodian account is currently used.

Recognition of nominee concept

Although the laws and regulations of the Czech Republic recognise the nominee concept and provide for the two-tier structure,  CBL would very likely be treated as a legal and beneficial owner of the book-entry securities and the rights of CBL's underlying customers or as the case may be, the final investors will not be recognised under Czech law as property titles but merely as contractual rights under the relevant foreign law that governs the relationship between CBL and its  customers or, as the case may be, the end-investors.

No right of retention to the cutodian/account operator/CSD

Confirmed

Segregation of assets at the CSD

Confirmed

No right of use

Confirmed

No upper-tier attachments

Local laws do not prohibit some forms of upper tier attachments.

Insolvency of custodian/account operator/CSD with no impact on CBL's rights 

Confirmed

Shortfall pro-rated among holders

CNB: Confirmed

CSD Prague: There is no relevant and specific "shortfall" rule as per the proportionate fixing under the local law. However, there is a specific procedure under CSD Rules.

Settlement finality in case of insolvency

Confirmed