Transcript Slajd 1 - KDPW CCP

Introduction of securities netting
to cash trade clearing
W a r s a w , April 2012
Agenda
 Why Netting?
 Netting Process

Introduction

Netting Mechanism

Clearing Positions

Aggregate Collateral Accounts

Reporting

Benefits of Netting
2015-07-16
KDPW_CCP
2
Why Netting?
Clearing houses which use netting:
 LCH Clearnet SA,
 S I X x - C l e a r,
 E M C F,
 E u r o C C P,
 K e l e r.
2015-07-16
KDPW_CCP
3
Netting Process: Introduction
Securities netting
mechanism generating a single settlement instruction (securities and cash
settlement) for all credits and debits in an entity account.
Project status: target date Q3 2013
2015-07-16
KDPW_CCP
4
Netting Process: Introduction
 Introduction of securities netting on the cash market mandatory to all
KDPW_CCP participants.
 Cash market netting of all trades on the market covered by settlement
guarantees.
 Introduction of the netting mechanism in co-ordination with the introduction
of the automatic partial settlement functionality.
2015-07-16
KDPW_CCP
5
Netting Mechanism
Clearing Process with Netting
2015-07-16
KDPW_CCP
6
Netting Mechanism
Settlement Process and Update of Clearing Positions
2015-07-16
KDPW_CCP
7
Clearing Positions
 Clearing positions are created on the basis of trades from the markets.
 Clearing positions are defined mainly by:
Date of trade
ISIN
Participant identifier
Clearing account ID
2015-07-16
KDPW_CCP
8
Clearing Positions: Schema of Segregating Clearing
Instructions by Market:
G P W, B o n d S p o t
2015-07-16
KDPW_CCP
9
Clearing Positions
Netting may generate the following settlement instructions – combinations of credits
and debits with the Clearing House:
No.
Description
Securities
Cash
1.
Delivery of securities against payment
Delivery
Receipt
Receipt of securities against payment
Receipt
Delivery
Delivery of securities free of payment
Delivery
Net to 0
Receipt of securities free of payment
Receipt
Net to 0
Payment
Net to 0
Delivery
Receipt of cash
Net to 0
Receipt
Delivery of securities and payment
Delivery
Delivery
Receipt of securities and cash
Receipt
Receipt
Zero clearing position
Net to 0
Net to 0
2.
3.
4.
5.
2015-07-16
KDPW_CCP
10
Aggregate Collateral Accounts
Aggregate Collateral Accounts (ZKZ) –
aggregate collateral for one or more clearing accounts will be accrued in
ZKZ.
Account aggregation is determined by the attribute - o w n e r t y p e
2015-07-16
KDPW_CCP
11
Schema of
Aggregate Collateral Accounts
2015-07-16
KDPW_CCP
12
Reporting
Clearing Members will be receiving from KDPW_CCP new messages in the
ISO 20022 CCP Clearing standard.
Messages will contain more complete information of the trade clearing
process.
2015-07-16
KDPW_CCP
13
Reporting
ISO20022 messages
 Confirmation of acceptance of a trade - secl.001.001.02
 Confirmation of cancellation of a trade – secl.002.001.02
 List of concluded trades – secl.003.001.02
 List of net clearing positions – secl.004.001.02
 Notice of buy-back of securities – secl.007.001.02
 Confirmation of buy-back of securities - secl.009.001.02
 List of settlement debits - secl.010.001.02
2015-07-16
KDPW_CCP
14
Benefits
Benefits of the netting mechanism:
 raised standards of the clearing process,
 reduced number of instructions sent for settlement,
 reduced cost of trade settlement,
 Aggregate Collateral Account functionality,
 reduced cost of participation in the settlement guarantee system,
 reduced settlement risk.
2015-07-16
KDPW_CCP
15
Conclusion
Discussion
Żaneta Skorupska-Świrska
Deputy Managing Director
KDPW_CCP S.A.
E: [email protected]
2015-07-16
www.kdpwccp.pl
16