Transcript Slajd 1 - KDPW CCP

Settlement Agent
Settlement Agent
Settlement Agent
General provisions
 Addressees of the new functionality:
Foreign clearing members (CM)
 Beneficiaries:
Foreign CM and entities playing the role of Settlement Agents
 Purpose:
To enable foreign investment firms to apply for KDPW_CCP CM status without
having to open and maintain a KDPW account.
 separation of clearing and settlement
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Settlement Agent
Main principles (1)
Settlement Agent (SA)
 KDPW direct participant (participation type: representative/settlement agent)
authorised to operate a securities accout, a derivative instruments account or a
depository account
 CM’s financial instruments are registered and CM’s transactions are settled in
KDPW depository account operated by the settlement agent.
 Settlement agent performs the function of payer bank for CM or indicates to
KDPW an entity which performs this function for CM – it performs cash
settlement of CM’s transactions; SA and CM must indicate the same payer; the
Settlement Agent may indicate another default payer for its other functions
 Liable for tax issues – the final responsibility for covering tax costs to be defined
in the bilateral agreement between SA and CM.
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Settlement Agent
Settlement Agent and Clearing Member
SA and CM market position
WSE
KDPW_CCP
CM
instructions
Securities, margins
KDPW
SA
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Settlement Agent
Main principles (2)
Foreign investment firm
 KDPW_CCP participant with clearing member (CM) status
 Not a KDPW participant – cannot operate securities accounts (need not open a branch in
Poland)
 Signs an agreement with one entity performing SA function in KDPW
 Indicates SA account to KDPW_CCP and presents a declaration indicating the entity to
perform this function and the entity’s declaration of consent.
 Pays cash liabilities following marking-to-market.
 Is the only participant of the settlement guarantee system (contributes cash via the payer
bank; securities contributed to the SGS are transferred to KDPW from CM account operated by
SA)
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Settlement Agent
Main principles (3)
Cont’d .
 Foreign entity submits an application for a participation agreement to KDPW_CCP and SA
submits a representation agreement with CM to KDPW  CM receives a participant ID within
a formal account operated by SA in KDPW.
 Entity performing SA function does so under its existing KDPW participant ID (e.g. XXXX)
while being a CM account operator (e.g. YYYY)  SA manages accounts under different IDs
(both XXXX and YYYY).
 Relation between SA and CM identified in the system by means of a new type of activity
for a CM, a new type of participant status: Representative/Settlement Agent and an
agreement between CM and SA.
 CM ensures participation in the securities lending system via its SA.
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Settlement Agent
Settlement Agent and Clearing Member
SA in relation to KDPW and CM in relation to KDPW_CCP
CM YYYY
CM ZZZZ
KDPW
positions, DvP
margins
KDPW_CCP
XXXX
SA XXXX
for CM
YYYY
SA XXXX
for CM
ZZZZ
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Settlement Agent
KDPW message flow chart
Example: SA assigned to tw o foreign CMsre
KDPW
SA CM ZZZZ
SA CM YYYY
Message to inbox XXXX, but Rcvr: ZZZZ
Message to inbox XXXX, but Rcvr: YYYY
SA
XXXX
Message re SA to inbox XXXX, Rcvr: XXXX
SA XXXX
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Settlement Agent
KDPW_CCP message flow chart
KDPW_CCP
CM ZZZZ
Message to inbox ZZZZ, Rcvr: ZZZZ
CM ZZZZ
Message to inbox YYYY, Rcvr: YYYY
CM YYYY
CM YYYY
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Settlement Agent
Timetable
Next project phases
 By 04.03.2011 – request for preliminary declaration of KDPW participants’
interest in performing the Settlement Agent function for foreign Clearing
Members in order to participate in tests
 2nd half of March 2011 – tests with participants
 Implementation of the SA functionality when KDPW_CCP goes live
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