Settlement is executed in the form of entering securities records into registration accounts managed by KDPW. KDPW offers settlement in the multi-batch system and the real-time settlement system. KDPW offers DvP settlement (delivery versus payment, i.e., KDPW settles securities against cash) and FoP settlement (free of payment, i.e., KDPW only executes transfers of securities between members’ accounts). Transactions are settled in PLN or in EUR. The multi-batch system supports multi-lateral netting while the RTGS system supports gross settlement (one transaction after another).
Transactions concluded on a trading venue are settled at T+2.
KDPW executes settlement on the basis of settlement orders presented by KDPW members or the clearing house KDPW_CCP or on the basis of documents containing the terms of transactions presented by the operator of a regulated market or the organiser of an alternative trading system.
The settlement system accepts orders presented in XML messages and MT messages under ISO15022 KDPW distributes messages in a format convenient to members (XML or MT).
Members receive status messages in response to presented settlement orders (at each time the order status changes) as well as statements following settlement. The system kdpw_stream processes order status queries, balance queries, and booking list queries.
The system kdpw_stream supports the following functionalities:
- completion of fields with default values by the system;
- transaction settlement using tolerance limits;
- hold-release mechanism which enables the parties to arrange preliminary terms of a transaction without having to complete settlement;
- processing of standing orders;
- processing of enriching instructions which modify the content of previously sent settlement instructions;
- processing of complex transactions: participants may mutually set conditions for settlement of two or more transactions;
- settlement instructions dedicated to a specific settlement session.
To optimise settlement, KDPW supports automated securities lending and borrowing in the event of a shortage of securities in a member’s registration account necessary to settle a transaction.