The European Central Bank and the central banks of the Eurozone launched a common European platform for the settlement of securities transactions called Target2-Securities (T2S). Due to integration of central securities depositories into a common European platform, the Central Securities Clearing Corporation (KDD) in Slovenia is terminating all accounts that do not have a designated KDD financial intermediary (registry accounts) and forcing owners of these accounts to transfer their securities to an account with financial intermediary. This situation is having a negative impact on costs related to the ownership of securities.
As part of the ongoing work to address this alarming situation, VZMD, the pan-Slovenian Investors` & Shareholders` Association and BETTER FINANCE member, welcomes the Slovenian Consumers' Association call for deputies of the National Assembly of the Republic of Slovenia to adopt an authentic interpretation of Paragraph 4 of Article 48 of the Book Entry Securities Act (ZNVP-1) to ensure the protection of consumers against the prohibitive costs of opening and closing trading accounts.
In the past, while amendments to Article 48 of the ZNVP Bill were being drafted, VZMD had already spoken out against the high costs linked to trading accounts. The ensuing proposal to limit the costs of trading accounts and related fees to a maximum of 0.5% of the average value of the securities in the account was finally accepted.
Circumventing this legal provision, many trading account providers (mainly brokerage companies and banks) started charging shareholders for "new costs". VZMD President Kristjan Verbič warned the management of the Securities Markets Agency (ATVP) of this reality, but no follow-up was given. As a result VZMD believes that as of next year, when most minority shareholders will have opened trading accounts, the providers are likely to put an end to the current "promotions" and "discounts" and significantly raise the price of their services.
To raise awareness and address the problem at hand, the Slovenian Consumers' Association circulated the most realistic and complete review yet of the options available to registry account holders.
From its side VZMD proposes the "Delniška OPORA" (Share SUPPORT) scheme as an alternative to trading accounts. In their view, supported by many experts, this is the best and most rational alternative with a fee which, in the long-term, is guaranteed to be the lowest fee possible on the Slovenian Capital Market enabling minority shareholders to own securities and play a vital role in Slovenian Capital Markets.
Minority shareholders who hold securities accounts with the Central Securities Clearing Corporation and who need to remedy this situation by January 1st, 2017, find the high number of options on offer to accomplish this confusing. VZMD therefore suggests they contact the "Share SUPPORT" staff about the abolishing of registry accounts at KDD and rely on professional and responsible help to hold on to their securities at a reasonable cost.