Market Link Guide - Ukraine

29.05.2019

Key features

CSD link as defined under CSDRa

Yes

Type of link

Operated link

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


CSD

Operator

Name

National Bank of Ukraine

JSC Citibank

FATCA GIIN

Non-reporting FI: Not available

NXUTG8.00375.ME.804

LEI

254900V6U1GCBZZAUS26

549300E0ROTI7ACBZH02

Country of incorporation

UkraineUkraine

Account type

Omnibus account under a nominee structure

Omnibus account under a nominee structure

Legal Account name / holder

Clearstream Banking S.A.

Clearstream Banking S.A.

Operational arrangements

 Yes/NoRemarks
Settlement free of paymentYes 
Settlement against paymentNo 
Settlement against payment in central bank money No 
Bridge settlementNo 
Shaping facilityNo 
Partial settlementNo 
Settlement penalty feesNo
Pre-matchingNo 
Back-to-back processingNo 
AllegementsNo 
Automatic compensationNo 
Registered securitiesYesSecurities are fully dematerialised and held onto the account of Clearstream Banking S.A. at the National Bank of Ukraine and recorded under the name of Clearstream Banking S.A. in the books of the National Bank of Ukraine.
Multi Market SecuritiesNo 
Lending and borrowingNo 
Proxy votingNo 
Investment FundsNo 
Liquidity Hub ConnectNo 
Sale and purchase of rightsNo 
Repo servicesNo 
Market restrictionsYesUkraine residents are restricted from holding Ukrainian CBL-eligible assets as part of the CBL books. Only non-residents are allowed to hold Ukrainian CBL eligible assets.
FTTNo 
Daily reconciliationYes 
Link eligible for use in Eurosystem credit operationsNo 
Bilateral cancellationNo
Settlement finalityTransactions settled in the books of the CSD are final and irrevocable

Moment of entry of instructions

Instructions are considered to be entered into SSD NBU's depository system after successful validation.

Irrevocability of instructions

Matched instructions are irrevocable in SSD NBU's depository system.

Settlement finality of instructions

Instructions settled in SSD NBU's depository system are final. Local custodians are obliged to record every transaction in their books on client accounts in order to finalise the transaction.

Legal Arrangements

The below section is based on the legal opinion obtained by CBL that was issued on 23 May 2019.  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

Confirmed

Custodian’s liability for negligence of CSD

Foreseen under statute and contractually
Liability for negligence of account operatorContractually foreseen

Book-entry regime with in rem rights

Precision from the local counsel is that Clearstream is only conferred a contractual right on the securities credited to the Direct CSD Account.
No entitlement of the account operator/CSD

Confirmed

Recognition as direct CSD account-holderConfirmed
Recognition of nominee conceptConfirmed

No right of retention to the account operator/CSD

Confirmed. Precision from local counsel that security interest with respect to the securities credited to the Direct CSD Account(s) may arise from transactions (eg purchase) between the owners of these securities, on the one hand, and the account operator or the CSD (in each case, acting on its own account), on the other hand.

Segregation of assets at the CSD

Precision from the local counsel that local law does not establish the framework for insolvency or similar procedures affecting the enforcement of the CSD's creditors' right generally. A fair interpretation of the CSD Rules is that the CSD should segregate its own securities from the securities held for its account holders

No right of use for account operator/CSD

There is no specific procedure on upper-tier attachments under local law and upper-tier attachments are not expressly forbidden

No upper-tier attachments

Confirmed

Impact of insolvency of the account operator on CBL's rights 

No impact on securities, except for cash, which will be part of the account operator’s liquidation estate.
Impact of insolvency of the CSD on CBL's rights Precision from the local counsel that local law does not establish the framework for insolvency or similar procedures affecting the enforcement of the CSD's creditors' rights generally.

Shortfall pro-rated among holders

No. Precision from local counsel that neither the CSD Rules nor local law provide for specific shortfall allocation arrangements

Record keeping of at least 10 years

No, 5 years

Settlement finality in case of insolvency

No. Precision from local counsel that local law does not provide for settlement finality.