Risk Committee Update: October 2025

Greece and Cyprus

Sub-custodian providers in Greece and Cyprus were also assessed in relation to corporate actions, resulting in some alignment between providers. Operational risk scores across banks remained relatively stable, although the confirmation of one institution implementing an annual IASE3402 external audit resulted in a notable improvement in their operational risk grade.

The Greek market has been upgraded from ‘Advanced Emerging Market’ to ‘Developed Market’ by FTSE Russell. This new market classification is expected to come into effect on 21 September 2026.

In addition, Euronext has received all necessary regulatory approvals for its acquisition of Hellenic Exchanges-Athens Stock Exchange S.A. (ATHEX), the Greek capital markets operator. The voluntary offer Acceptance Period began on 6 October 2025 and will close on 17 November 2025. Completion is subject to a minimum acceptance of 67% of ATHEX’s voting share capital. If Euronext reaches 90% ownership, it will initiate a squeeze-out procedure under Greek Law 3461/2006.

Ukraine

The Ukrainian market remains volatile following the Russian aggression initiated in 2022, which led the market to implement certain repatriation restrictions and the exit of some foreign banks, although the National Bank of Ukraine (NBU) has been slowly relaxing restrictions to ensure the market’s stability. The NBU and the Securities Commission (NSSMC) have also advanced regulatory changes to introduce delivery-versus-payment (DVP) settlement for over-the-counter (OTC) transactions on domestic government bonds (OVDPs), as well as for cross-border trades on government bonds conducted through the Clearstream link.

The Ukrainian post-trade infrastructure is, however, about to undergo significant reform aimed at modernising its infrastructure by consolidating all central securities depository services under the National Depository of Ukraine (NDU), while trading and clearing will be run by a vertical silo operated by a new holding company (to be created). This new entity (where participation of an international strategic partner is expected) will create a new exchange and will become the main shareholder of Ukraine’s clearing house (Settlement Centre). No set timelines have been disclosed for the completion of this initiative and, as yet, there is no clear information about the future of the existing exchanges. While these reforms will strengthen transparency, risk mitigation, and market efficiency, practical challenges remain in achieving this vision, not least in ensuring operational resilience amid ongoing geopolitical and macroeconomic uncertainty.

In the context of the Ukraine-Russia war, sub-custodian risk grades have been maintained at lower levels since the outbreak of the war, and currently no grade changes have been proposed.

There is only one ‘outlook’ change from ‘Negative’ to ‘On-Watch’ for asset servicing for a major bank in Ukraine. There was a recent improvement (effective 6 Aug 2025) regarding companies now being able to authorise repatriation of dividends corresponding to 2023, subject to the existing overall monthly cap of EUR 1 million (cap unchanged). This shifts the eligibility for businesses to repatriate part of their dividends from 1 January 2023, instead of 1 January 2024. Last year, the central bank had allowed the same for dividend payments accrued from operations conducted since 1 January 2024.

Japan

There have been notable improvements across operational risk scores for sub-custodian providers in Japan. These improvements have been primarily driven by enhanced operational resilience practices, risk management procedures, and financial crime policies. Among others, this included some banks allowing for greater distances between primary and secondary data sites, conducting more frequent risk and control self-assessments, and the establishment of more formalised and comprehensive policies on whistleblowing.