Capital markets in Bosnia and Herzegovina are regulated at the entity level – the Federation of Bosnia and Herzegovina and the Republic of Srpska – rather than at the national level. There are two securities commissions, two CSDs and two stock exchanges (Sarajevo SE and Banja Luka SE), while the legal framework for capital markets is based in Bosnia and Herzegovina on the Law on Securities Market and in Srpska on the Law on Securities Market.

The CSD in the Republic of Srpska (CRHOV RS) has implemented the T+2 settlement cycle for securities transactions traded from January 1 2015. The Registry of Securities in the Federation of Bosnia and Herzegovina has also started the process of introducing the T+2 settlement cycle and implementation is expected later this year.

In accordance with the anti-money laundering rules, the Federal Banking Agency has issued orders to local sub-custodians to collect information about beneficial owners for every single trade, which means that information about beneficial owners must be included in settlement instructions.

Payments related to block trades could previously only be done directly between the buyer and seller. To protect investors, CRHOV has introduced a new method – payment through the CSD’s cash account with the central bank.