Growing activity of KDPW and its participants in international markets requires on-going alignment of KDPW systems with the global standards and market practice applicable to the exchange of settlement messages. In the National Market Practice Group (NMPG PL), KDPW in co-operation with representatives of market participants develops a range of settlement practices to apply in the Polish market. The practices are then gradually implemented in kdpw_stream. Standardisation efforts are on-going due to continuous market development and modifications of international standards.
The work to date has implemented among others the following functionalities:
- provision of the error code of instruction matching;
- modification of the instruction expiry rules;
- improvements of matching with settlement value tolerance including new matching mode ‘0’;
- final rejection of incorrect settlement instructions;
- introduction of ISO codes designating error reasons of settlement instructions;
- instruction status depending on the actual settlement date;
- modifications of the designation of suspended instruction status;
- modifications to the settlement instruction matching rules at client level enabling automation of matching on KDPW participant side (STP);
- clarification of the rules of application of market codes in settlement instructions;
- introduction of the designation of the volume of financial instruments for debt instruments as face amount instead of quantity in units;
- modifications to the processing of repo and sell/buy-back transactions: integration of two existing models, alignment with the CSDR requirements and introduction of partial settlement.
To address the needs communicated by KDPW participants and in view of CSDR requirements, KDPW is working to introduce operation type codes and market codes under ISO. The specific solutions are consulted with market participants in S&R NMPG PL. Another standardisation area under consultation is the improvement of the terms of combining settlement instructions (compound transactions).
How to use MyStandards?
The KDPW Group joined the ISO20022 Harmonisation Charter in September 2016. In line with the Charter’s recommendations, KDPW has published on MyStandards in 2017 the documentation of its ISO messages used in communications with counterparties in Corporate Actions (ISO20022), Settlement and Reconciliation (ISO15022 and ISO20022), Clearing (ISO20022).
In November 2017, KDPW started to process the key settlement messages under ISO20022 (Settlement and Reconciliation) in addition to its proprietary XML messages and SWIFT ISO15022 messages. The message structures and the details of the supported messages and settlement processes have been published on MyStandards.