Market Link Guide - Czech Republic

19.10.2020

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, Article 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 CBL.

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: UniCredit Bank Czech Republic and Slovakia, a.s.

UniCredit Bank Czech Republic and Slovakia, a.s. as the participant at SKD system of CNB hold an individually segregated account for CBL.

CSD Prague: Clearstream Banking S.A.

Clearstream Banking S.A.

Operational arrangements

Yes/NoRemarks
Settlement in T2S

No

Settlement free of payment

Yes

 
Settlement against payment

Yes

Eligible settlement currency: Czech Koruna (CZK) 
Settlement against payment in central bank money account of CBL/CBL customers

No

CBL 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 settlement

Yes

Except equities, exchange traded funds and
CSD-eligible open-ended funds.
Shaping facilityNo  
Partial settlementNo  
Settlement penalty feesNo  
Pre-matching

Yes

 
Back-to-back processing

Yes

 
Allegements

Yes

 
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 Securities

Yes

Multilisted securities exist in the market; these are held by the local CSD on their account with Euroclear.

Lending and borrowing

Yes

 
Proxy voting

Yes

 
Investment Funds

Yes

Exchange traded funds and 
CSD-eligible open-ended funds.
Liquidity Hub ConnectNo  
Sale and purchase of rightsNo  
Repo servicesNo  
Market restrictions

No

 
FTTNo  
Daily reconciliation

Yes

 
Link eligible for use in Eurosystem credit operations

No

 

Moment of entry

 

CNB: If transactions are not settled on the DvP principle, then the moment of acceptance of an instruction for settlement means the moment at which the securities in the asset account are blocked for the purposes of a transfer.

If transactions are settled on the DvP principle, then the moment of acceptance of an instruction for settlement means the moment at which an instruction for payment is created and despatched to the CERTIS (payment) system.

CSD Prague: The order for settlement is considered accepted in the settlement system the moment the Central Depository commences settlement by earmarking dematerialised securities intended for the settlement on asset accounts (validation).

Irrevocability 

CNB: A settlement instruction cannot be revoked from the moment of acceptance of such instruction.

CSD Prague: The participant or the third party must not unilaterally recall the order once it is admitted into the settlement system.


Settlement finality

CNB: Settled transfers in the SKD system are final.

CSD Prague: The settlement is terminated by clearing the transfers of dematerialised securities from the transferors’ asset accounts to the transferees’ asset accounts in compliance with the time schedule.

Legal arrangements

The below section is based on the legal opinions obtained by CBL that were issued on 21 July 2020 (direct operated link) and 4 August 2020 (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