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About the service

KDPW offers settlement of conditional transactions as follows:
  • tri-party-repo service,
  • settlement of closing transactions on the basis of details provided by participants in opening transactions,
  • repo and sell/buy-back transactions without the mediation of KDPW: settlement of repo opening and closing on the basis of separate instructions sent by participants.

Tri-party-repo: settlement of repo transactions combined with monitoring and management of the value of securities transferred between parties as collateral
With a view to supporting long-term repo transactions, KDPW offers the tri-party-repo service. The role of KDPW is to perform all actions required in the operation of the comprehensive system of settlement and monitoring of the collateral of repo transactions, i.e.:
  • accepting repo instructions,
  • selecting collateral for repo transactions,
  • updating collateral, i.e., calculating and initiating collateral transfers,
  • reporting collateral requirements to repo counterparties,
  • processing the closing of repo transactions at the set date taking into account the repo rate,
  • processing corporate actions for securities posted as collateral: modifications to the collateral register,
  • processing compensation in respect of cash payments attached to securities posted as collateral.


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The tri-party-repo service offers new solutions in kdpw_stream, never before applied to the processing of repo transactions:
  • initiating repo transactions by defining the amount of a loan, acceptable collateral (not necessarily as a specific single ISIN code of a security), and repo parameters,
  • the option of posting repo collateral in multiple securities – ISIN codes (collateral basket),
  • daily updates of collateral as well as the value of repo agreements,
  • adjusting collateral – securities are accepted as the principal type of collateral while cash is used as a back-up option,
  • processing corporate actions – compensation paid to the collateral provider at payment date,
  • processing corporate actions: modifications to the collateral register for securities posted as collateral.


Settlement of closing transactions on the basis of details provided by participants in opening transactions
A repo agreement includes an opening transaction and a closing transaction, hereinafter jointly “repo transactions”.
An opening transaction under a repo agreement involves the following:

  1. transfer of the title to securities marked with a specific code without blocking them in the account of the buyer, or
  2. transfer of the title to securities marked with a specific code and blocking them in the account of the buyer, or
  3. commitment to transfer the title to securities marked with a specific code and blocking them in the account of the seller
- in exchange for cash payment of a specific amount.

A closing transaction under a repo agreement involves the following:
  1. return transfer of the purchased securities in the same quantity and marked with the same code as the securities in the opening transaction, or
  2. return transfer of the purchased securities in the same quantity and marked with the same code as the securities in the opening transaction, after unblocking them in the buyer’s account, or
  3. unblocking securities previously blocked in the seller’s account and release of the seller from the commitment to return transfer the title to the securities
- in exchange for cash payment of a specific amount.

Settlement instructions submitted in order to settle an opening transaction are deemed to match if they contain the standard information as well as the following matching information:
  1. the type of repo agreement,
  2. the repo rate,
  3. the settlement date of the closing transaction.
KDPW issues evidence used as the basis for the settlement of a closing transaction at the settlement date of the transaction specified, respectively, in matching settlement instructions sent in order to settle the opening transaction.


Repo and sell/buy-back transactions without the mediation of KDPW
The S&R NMPG has identified the need of simplifying the processing or repo and buy-sell-back transactions by processing opening and closing operations as two separate operations (without generating a closing transaction at KDPW system level). KDPW has implemented a simplified settlement model for conditional transactions but continues to require that such operations are specified as repo and buy-sell-back transactions including the operation phase (opening/closing). For this purpose, separate codes have been added in order to define such transactions.

Last modified:12-12-2014 Go up