Polish central securities depository KDPW has launched two new services designed to improve its trade clearing and settlement systems.
A netting mechanism will allow clearing houses to reduce the number of settlement instructions issued into one single communication, while the automatic partial settlement will allow for the settlement of an instruction in part depending on the balance available in a registration account in the settlement system as at the settlement date and the settlement of the remaining part on subsequent days.
The automatic partial settlement service is intended to enhance the liquidity of both settlement at KDPW and clearing in KDPW_CCP by reducing the volume of suspensions of settlement when faced with a number of appropriate securities in a depository account that is insufficient for full settlement.
Commenting on the new netting mechanism, KDPW_CCP’s CEO, Iwona Sroka, says, “The implementation of netting and aggregation (directional netting) of debits and credits in securities arising from cleared transactions concluded on the regulated market or in an alternative trading system implies improved operating standards of the clearing process resulting in a significant reduction of the number of instructions sent for settlement while reducing the cost of trade settlement.”
The netting mechanism will cover any non-cash debits and credits arising from cleared transactions on the condition that the clearing member has selected such a mode of settlement, the trades in question are to be settled on the same date and securities under such trades are marked by KDPW with the same identifier in the depository system.
Sroka adds that the automatic partial settlement will “reduce the volume of settlement suspensions and consequently charges to KDPW participants. Furthermore, KDPW participants will be able to use the assets in their accounts to the maximum.”
KDPW Enhances Clearing and Settlement Offering
Polish central securities depository KDPW has launched two new services designed to improve its trade clearing and settlement systems.