Montenegrin capital market news: Rules for the over-the-counter market (OTC) of the Central Securities Depository and Clearing Company of Montenegro (CKDD) will enter into force on 27 December 2022, and will be applied after 30 days from the date of their entry into force i.e. 26 January 2023. A few of the most important features of these rules follow below:
– These rules govern the tasks of organizing the OTC, as well as managing the clearing system and balancing transactions concluded on the OTC;
– OTC, in terms of these rules, is a secondary market for trading financial instruments organized by CKDD by providing a trading system that enables negotiation between the seller and buyer of financial instruments in order to conclude a transaction;
– OTC market organized in accordance with these rules is a self-regulating market that ensures an increase in liquidity and the volume of trading in financial instruments while respecting the principles of transparency and investor protection, preserving the integrity of the market, avoiding systemic risk, preventing fraudulent and manipulative market practices and improving the capital market;
– OTC is organized within the information system as a separate module of the CKDD application, called “CKDD OTC platform”;
– OTC member is an investment company that is an issuer member of the CKDD and has a license from the Commission to perform investment and auxiliary services, after concluding a special contractual relationship with the CKDD;
– OTC transactions are concluded between OTC members who have access to the CKDD OTC platform and act in their own name and on behalf of the client;
– OTC transactions cannot be concluded between legal and/or physical persons – brokers, dealers or investment advisors acting on behalf and on behalf of the client;
– CKDD’s obligation to all OTC members is to provide access to the CKDD OTC platform on which OTC transactions are concluded every business day from 10 a.m. to 2 p.m. in one of the following ways:
- Through a digital certificate,
- “Site to site” connections,
- SSL VPN connections.
– Existing members participating in the CKDD system are not assigned new connections, but through the administration of the system, a new – OTC role is assigned, which gives them the status of OTC member;
– For new OTC members, a new connection is created in accordance with their IT infrastructure;
– OTC transactions will be settled in the CKDD system according to the TFT (BIS Model 1) principle;
– CKDD does not guarantee the successful settlement of OTC transactions, i.e. it does not guarantee the provision of a financial instrument and/or money for settlement;
– OTC members are obliged to resolve all possible disputes arising from or in connection with OTC transactions recorded in the CKDD system independently of the CKDD.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
