16 April 2012

Omnibus Accounts Operated by KDPW Participants Available as of 16 April

Amendments of the KDPW Rules taking effect as of 16 April 2012 allow Participants of the National Depository to operate omnibus accounts. The introduction of omnibus accounts opens the Polish market to new investors and consequently offers the chance to increase the inflow of foreign capital.

Omnibus accounts are accounts operated by participants of the depository system to record securities which are not held by the official account holders. An amendment of the Act on Trading in Financial Instruments has allowed to introduce this solution in the Polish depository system operated by KDPW.

From the perspective of foreign investors, previous solutions that existed in the Polish financial system and required a foreign investor to hold a separate account opened especially for the Polish market were expensive and complex.

“Despite the financial crisis which has prevailed for many months, the Polish capital market continues to grow and attract foreign investors, whose turnover has increased significantly. As long as omnibus accounts were not available, there was a mounting barrier to further growth of the Polish capital market, which over the past years has moved from the position of a local market to that of a regional financial hub,” said KDPW CEO Iwona Sroka.

Together with depository accounts (operated at National Depository level) and securities accounts (operated by KDPW Participants), omnibus accounts are a third registration tool available in the securities depository. They differ from securities accounts in that they do not allow to identify the holders of rights attached to securities recorded in the account; they differ from depository accounts in that they are not linked to securities accounts.

KDPW is currently working on the option of offering omnibus accounts operated by the National Depository (as opposed to KDPW Participants).

Omnibus accounts are used in many countries in the EU and all around the world including Austria, Belgium, Denmark, Finland, France, Germany, Hungary, Portugal, Spain, as well as outside the EU, among others in Switzerland and the USA.

9 January 2012

e-invoicing and self-billing now available at GIR KDPW: the first such comprehensive solution on the market

The National Depository has implemented the webGIR system, which supports and simplifies the invoicing process resulting from participation in the KDPW Exchange Clearing House (GIR KDPW). The new solution supports not only self-billing but also electronic transmission of invoices, preparation of proposed contents of an invoice to be issued by a GIR member, and archiving of invoices for GIR members. It is the first such comprehensive tool on the domestic market.

The webGIR system supports the exchange of invoices over a website by taking full advantage of the liberalisation of regulations applicable as of 1 January 2011.

“As of the beginning of this year, the invoicing process will be fully executed on the basis of the new solution and GIR KDPW members will receive individual access codes for a dedicated online application and sign agreements required under respective invoicing regulations. If any member wishes to continue with the existing rules of paper invoicing, this will also be possible; however, I strongly encourage the use of the new opportunities, which save time and money and facilitate work,” said Ms Iwona Sroka, KDPW President and CEO.

In the invoicing process, webGIR gives authorised employees of GIR members access to invoicing data, supports downloading of invoices in XML or MS Excel format, transmission of invoices from and to GIR KDPW in electronic format, as well as self-billing.

The main advantages of the newly implemented solution include:

• data necessary for invoicing are available at any time over a website;
• GIR members may upload their invoices (in PDF format) issued to GIR KDPW;
• invoices are available to GIR members immediately when issued by GIR KDPW;
• immediate invoice delivery – possibility of closing the month even on the last day of the month;
• no cost of processing, printing and sending invoices in the standard process – saving of time and money;
• GIR members control every stage of the invoicing process through self-billing;
• voluntary participation in the system for any period of time;
• a choice of invoicing options and exchange of invoices depending on the needs of GIR members.

This solution will eliminate errors resulting from manual issuing of invoices by GIR members. webGIR also saves energy, paper and storage space as it eliminates the flow of printed documents: all documents are stored in electronic format. On request of GIR members, their invoices related to participation in GIR may be archived by the National Depository for Securities.

This initiative of KDPW is in line with the intentions of the European Union aimed at improved security, simplification and cost reduction of documenting economic transactions.

The software which supports the new tool has been developed fully in-house by KDPW.

The mission of the Exchange Clearing House of the National Depository for Securities (GIR KDPW) is to clear and settle transactions concluded on the poee Energy Market of the Warsaw Stock Exchange (poee EM WSE).

With its many years of experience on the Polish capital market, the National Depository’s GIR warrants prompt clearing and settlement of transactions concluded on the WSE Commodity Market based on state-of-the-art technology. 

21 November 2011
Complete Migration of Euro Settlements to TARGET2

The National Depository for Securities (KDPW) has successfully completed the project of migration of euro settlements to TARGET2. The migration to TARGET2 was completed on 21 November 2011. The project was implemented as a part of the KDPW Strategy 2010-2013 and results in closer integration of KDPW and the Polish capital market with pan-European structures.
The last phase of testing involving KDPW participants, the National Bank of Poland (NBP) and TARGET2 was successfully completed in October 2011. The work on the project lasted two years.
 
From the technical perspective, TARGET2 is a system based on a single shared platform (SSP) where all payment orders are matched and processed under single technical rules and payments are executed.
 
The migration of KDPW euro settlements to TARGET2 ensures:
·         euro settlements in batch mode and in RTGS by debiting and crediting RTGS accounts of banks on TARGET2 SSP;
·         processing euro cash obligations of issuers to holders of securities (including accounts of banks on TARGET2 operated by central banks other than NBP);
·         faster euro transfers between foreign and local accounts of KDPW;
·         development of new functionalities to process euro DvP transborder settlements;
·         euro settlements via TARGET2-Securities;
·         effective operation of omnibus accounts for foreign depository-settlement institutions.
 
The National Depository previously participated in the system via NBP. According to the recommendations of the ECB Executive Board, KDPW was required to migrate settlements to TARGET2 after a four-year transitional period.
 
TARGET2 (Trans-European Automated Real-Time Gross Settlement Express Transfer System) was launched under the supervision of the European Central Bank in November 2007. The National Bank of Poland joined TARGET2 on 19 May 2008 by launching TARGET2-NBP. The system ensures faster and safer euro settlements between banks in different countries and thus strengthens the liquidity of the European financial system. In addition, TARGET2 offers special settlement procedures for Ancillary Systems, in particular securities settlement systems.

12 October 2011
Omnibus Accounts: Amendment to the Act Signed

On 11 November 2011, the President of Poland signed an amendment of the Act on Trading in Financial Instruments which introduces the concept of omnibus accounts to the Polish market. The Act comes into force on 1 January 2012.
Omnibus accounts are accounts operated by participants of the depository-settlement system to register securities which may not be owned by the holders of accounts.
The introduction of omnibus accounts opens the Polish market to new investors, it will facilitate investment and, consequently, increase the inflow of capital by making the Polish market more attractive and accessible. Markets with a multi-tier registration system are considered to be more accessible, have a bigger investor base and more diverse investor structure; thanks to a higher number of concluded transactions, this results in improved stability and better liquidity of trading on the market.
In addition, the introduction of omnibus accounts may increase the liquidity of Polish Treasury securities. The possibility of opening and operating omnibus accounts for foreign securities depositories and clearing platforms (e.g., Clearstream or Euroclear) in KDPW will make Polish Treasury securities more accessible to foreign investors, mainly by reducing the cost of access to the market of Polish Treasury securities. Without omnibus accounts, investors (including foreign investors) interested to buy Polish Treasury securities would have to open securities accounts on their own behalf. This entailed costs of the opening and holding of a securities account; for foreign investors, this was often ad additional cost on top of the cost of holding an account in the home country.
Previously, the provisions of the Act on Trading in Financial Instruments required that all securities accounts should be located in Poland. The architecture of the previous two-tier registration system excluded the possibility of operating omnibus accounts by individual participants of the depository-settlement system.
Omnibus accounts are used in many countries in the EU and around the world including Austria, Belgium, Denmark, Finland, France, Germany, Hungary, Portugal, Spain. Outside the EU, omnibus accounts are used among others in Switzerland and the USA.
According to applicable legislation, the depository-settlement system in Poland has a two-tier registration structure. The first tier is registration in depository accounts operated in the National Depository for Securities for investment firms, custodian banks and other entities authorised to operate securities accounts.
The second tier is registration in securities accounts operated by participants of the depository-settlement system (brokers, banks), where the holders of securities can be identified.
In addition to depository accounts and securities accounts, omnibus account will become the third registration mechanism operated in a securities depository. They will differ from securities accounts in that they will not support the identification of the holders of rights attached to registered securities; they will differ from depository accounts in that they will not be attached to securities accounts within the meaning of the Act on Trading in Financial Instruments and in that they will be operated not only by KDPW but also by participants of the securities depository operated by KDPW. Omnibus accounts can only be operated by entities authorised under the Act to operate securities accounts (within the meaning of the Act, the operation of such accounts will be a form of brokerage activity or custodian activity); omnibus accounts can only be held by entities authorised to perform the registration of financial instruments in another European Union member state or equivalent country within the meaning of the Act on Money Laundering and Terrorism Financing. This solution ensures that, on the one hand, omnibus accounts will only be operated by competent entities and, on the other hand, that omnibus accounts will be used to create operational links between securities registration systems operated in other European Union member states or equivalent countries and the system operated in Poland by KDPW.