National Depository for Securities
(KDPW)
Overview of the Polish Capital Market
Polish Financial Supervision Authority (KNF)
National
Depository for
Securities (KDPW)
Markets
National Bank
of Poland
(Clearing Bank)
Institutional
investors
Financial
institutions &
Intermediaries
Issuers
Individual
investors
2
KDPW – history & ownership



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1991 – 1994: An integral part of the Warsaw Stock Exchange
1994 – Present : Independent joint - stock company
1997 – Clearing of derivatives
1998 – Multilateral cash netting for exchange and non-exchange
market
2002 – RTGS introduced
2003 – First foreign shares listed and settled
2009 – New Depository Clearing & Settlement System (NSDR)
Current shareholders (since 1999)
 The State Treasury
- 1/3
 The Warsaw Stock Exchange - 1/3
 The National Bank of Poland - 1/3
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Main KDPW Responsibilities

Custody of all securities admitted to trading following public issue

Reconciliation and monitoring

Clearing and settlement of transactions executed on regulated
markets: the Warsaw Stock Exchange and BondSpot; and outside the
regulated markets (New Connect, MTS-Poland)

Processing of corporate actions

Assigning ISIN codes for Polish issues (National Numbering Agency)

Risk management –management of:
 Settlement Guarantee Fund covering regulated markets & ATS
 Collateral system for derivatives,
 Collateralisation of security loans in automatic securities lending borrowing system
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Other KDPW Responsibilities
Additional Services:
 Management of the Investor Compensation Scheme
For the Polish Social Security System:
 Transfer payments between open-end pension funds
 Management of the Pension Guarantee Fund
Other:
 Membership of European and international associations and working
groups
 Education, promotion, sponsorship
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Securities registered in KDPW

All securities admitted to trading in the regulated market
must be registered in KDPW

Currently, the following securities are recorded in the KDPW system:

Shares (foreign and domestic)

Bonds (Treasury, Central Bank, Corporate, Municipal, Convertible,
EIB, with priorities rights, non-public bonds, mortgage bonds)

Investment Fund Certificates

Derivatives

Futures Contracts (WIG20 index, currency, share)

Index Participation Units

Options (European style), (WIG20 index, share)

Exception: Treasury bills - custody, clearing and settlement
in the National Bank of Poland system
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Basic principles of Clearing and Settlement
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All securities settled in KDPW are dematerialised and transfers are made by
book-entry between KDPW participant accounts

Mandatory asset segregation (own assets, client assets)
Change of ownership at the moment of book-entry in securities account
DvP Settlement model:

BIS model I, BIS model II
Settlement :

T+2, T+3 - for regulated - market trades – SE, Bond Spot

T+0 to T+n - for non-regulated market transactions – OTC
Two settlement channels:

RTGS DVP 8.00-17.00, FOP 8.00-18.00

Multiple batch system 7.30-19.00

Cash leg settlement
 CBM - in the National Bank of Poland for PLN and Euro
 CLB for other currencies

Settlement liquidity facilities
 securities L&B automatic and on-request
 repo
 buy-in, sell-out
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Number of investement accounts
operated by KDPW Participants
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KDPW in Figures - January 2010
Number of KDPW Participants,
Including:
Resident participants
• Brokerage houses
•Bank
•Other
Non –resident participants
• Other
Issuers
Foreign issuers
Domestic issuers
72
71
23
15
33
1
1
589
36
553
KDPW in Figures (2)
January 2010
Capitalisation
Securities
842 599 505 490 PLN
Shares
399 664 970 568 PLN
- Domestic issuers
388 452 691 981 PLN
-Foreign issuers
112 122 785 87 PLN
Investement certificates
910 014 353 PLN
Basic principles
 Daily settlement schedule : multibatch and RTGS
- 6 settlement sessions a day with intra-day finality after each
session
RTGS
8.00
BATCHES
7.30
Technical
10.30
DVP
FOP
FOP
13.00
DVP
FOP
17.00
15.30
18.30
18.30
FOP
19.00
Technical
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KDPW in the Polish capital market
Post-trading processing flow
Seller
Buyer
Trade
Trade execution
Securities accounts
of the Seller /
seller’s custodian
Cash accounts of the seller/
seller’s custodian cash
clearer in NBP
Markets
Trade
Trade feed = Already
matched for settlement
Trade execution
Securities accounts
of the Buyer /
buyer’s custodian
Cash accounts of the
Buyer/ buyer’s custodian
cash clearer in NBP
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Links with foreign CSDs
Links created with foreign CSDs (FOP links) in connection with the dual
listing of shares on the WSE. More FOP and DVP links planned.
Euroclear
Sweden
EVK
Basic principles of dual listing
• Foreign shares quoted on WSE in PLN
• Clearing and settlement in KDPW in PLN
• Dividends paid to Polish shareholders in foreign
currency
• Transaction finality – entry on the participant’s
KDPW account
• Shares need to be registered on KDPW account in
foreign CSD to be traded on the WSE
• The transfer may be settled intra-day (RTGS in
KDPW)
Principles of KDPW cross-border links
Free of Payment transfers
The links work on a Free of Payment (FOP) basis,
which means that securities will be transferred without
a corresponding transfer of cash.
The links may in future be upgraded to a bilateral DVP
link, once a relevant business case has been identified
and the appropriate legal conditions have been met.
Links with foreign CSDs
No
CSD
Country
Type of link
Company*
Year of
opening
1.
KELER
Hungary
Indirect
MOL
2004
2.
EVK
Estonia
Direct
Olimpic Entertainment
Group
Silvano Fashion Group
2007
3.
OeKB
Austria
Direct
WARIMPEX
Immoeast
2003
2007
4.
CDCP
Slovakia
Direct
Asseco Slovakia
2007
5.
Clearstream
Frankfurt
Germany
Indirect– CBL**
bmp
2004
6
Monte Titoli
Italy
Indirect – CBL
Unicredito Italiano
2007
7.
DTC
USA
Indirect– CBL
CEDC
2006
8.
SCP
Czech
Republic
Indirect – CBL
CEZ
2006
9.
Euroclear
France
France
Indirect– CBL
ORCO
2007
Indirect – EB ***
Belvedere
2008
10.
Euroclear UK &
IR
UK
Indirect – EB
Atlas Estates
Plaza Centres
2008
11.
Euroclear
Sweden
Sweden
Indirect - EB
Reinhold
2007
* ** Clearstream Banking Luxembourg
*** Euroclear Bank
Plans for the future
Romania
(Indirect)
2010
Canada
(Indirect)
KDPW Vision
Build a robust capital group by 2013:
•
Anticipate competitive challenges;
•
Build a service portfolio based on state-of-the-art, innovative
technologies and solutions creating value for capital market
participants;
•
Support the development of a regional centre in Warsaw in
active co-operation with other Polish and foreign market
participants with KDPW as the main depository-settlement
institution in Central and Eastern Europe
KDPW Strategic Goals
(1) Introduction of a new KDPW business model
(2) Positioning KDPW as the leading CSD and clearing house in the CEE region
(3)KDPW integration with European infrastructures
(4) Introduction of new services to increase the value of the KDPW capital group
(5) Raising the standard and scope of services currently provided
(6) Optimisation of the KDPW capital group business processes
(7) Improving the input and skills of KDPW capital group personnel in order to meet the strategic goals
(8) Promoting the KDPW capital group corporate image and products and services through enhanced
corporate communication
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www.kdpw.pl
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