Settlement process - Hungary
Settlement cycles
Stock Exchange cash market trades:
Equities: | T+2 |
Debt instruments (including government bonds): | T+2 |
OTC trades:
All eligible instruments: | From T+0 to T+20, negotiable by the counterparties (KELER Ltd. accepts settlement instructions for 20 business days in the future calculated from the receipt date.) |
Note: KELER Ltd provides an RTGS against payment environment for OTC trades that can also be used for free of payment transfers.
Settlement flow
| SD: | |
06:45 | Start of the CSD business day |
08:00 | RTGS system and settlement window open. |
intraday | Instructions are pre-matched with counterparty (via telephone, email, fax) and the settlement system of the CSD. If an instruction is pre-matched successfully. it is released into the CSD system for settlement. |
until 17:30 | Against payment instructions can be released and settled. |
18:00 | Free of payment instructions can be released and settled. |
19:00 | End of the CSD business day (Validation and matching are still possible beyond the settlement window.) |
Registration
Nominee registration is accepted for equities in the Hungarian market.
Hungarian law does not currently recognise the nominee concept for Hungarian debt securities and the account owner is regarded as subject to interest tax.
If no separate beneficial owner is specified, the registration of equities is usually performed directly in the name of Clearstream Banking Luxembourg Nominee. Registration is performed based on settled record date positions before corporate actions or upon requests of the issuers to update registry book. The record date for equities is usually event date -5 and for government securities event date -2.
Key dates
| For dividend payments | For interest payments | |
Cum-date | PD-7 | PD-4 |
Ex-date | PD-6 | PD-3 |
Record Date | PD-5 | PD-2 |
Payment Date | PD | PD |
Countervalue difference allowed by the market
With non-EUR currencies, for settlement amounts equivalent to less than or equal to EUR 100,000, the tolerance level will be equivalent to EUR 2, while for settlement amounts that are equivalent to more than EUR 100,000, the tolerance level will be equivalent to EUR 25. For settlement instructions in currencies other than EUR, CSDs should use the official exchange rates of the European Central Bank (ECB), valid on 1 January of the respective calendar year.
For domestic against payment instructions, the maximum discrepancy tolerated in settlement matching varies in accordance with market practice and the conditions of the domestic link.
Cash penalties
Penalties will be calculated and applied on matched settlement instructions that fail to settle, in full or in part, on and after their intended settlement date (ISD), if both the settlement instruction and the relevant financial instrument are subject to cash penalties.
Instruments subject to cash penalties
Any financial instrument listed in the Financial Instruments Reference Data System (FIRDS) database maintained by ESMA will be subject to cash penalties. However, cash penalties will not apply to shares listed in the Short Selling Regulation (SSR) exemption listed in the Short Selling Regulation (SSR) exemption list.
Buy-in
Buy-in rules are applicable only for trades cleared by KELER CCP.
If the defaulting party does not fulfil its obligations by 9:00 on SD+5, a buy-in is initiated at the cost of the defaulting party.