CSDR settlement discipline modifications are in effect as of 1 February 2022
Modifications in connection with the alignment of the KDPW Group with the CSDR settlement discipline requirements (Phase II of the project) have been implemented on 1 February 2022 in the 2022 winter implementation window:
- a new system of cash penalties for late settlement, including mechanisms for the redistribution of cash penalties to counterparties by KDPW and KDPW_CCP;
- mechanisms for monitoring of participants’ timely settlement and assessment of settlement efficiency and mechanisms for supervisory reporting of settlement discipline;
- modifications to the existing hold/release mechanism; and additionally
- changes to the processing of settlement orders relating to post-trade settlements; the changes follow from discussions in working groups aiming to improve the processing of instructions delivered by participants’ clients, in particular allowing instructions not to be marked with a specific code related to post-trade settlement (market code XPXX in the KDPW system).
In view of ESMA’s statement regarding processes related to buy-in transactions (link
), the KDPW system has not implemented mechanisms related to reporting the details of such transactions to KDPW. However, the KDPW mechanisms supporting settlement processes related to potential buy-ins by participants offer the full range of functionalities as of 1 February 2022 including:
- the hold/release mechanism, as modified on 1 February 2022;
- settlement instruction cancellation;
- partial settlement, including modification of consent for partial settlement in a settlement instruction by means of technical instructions;,
- new operation codes for buy-ins outside the trading system.
Due to the ongoing authorisation process, only the changes concerning the collection and redistribution of cash penalties by KDPW_CCP on the basis of KDPW data have been implemented in the KDPW_CCP system as of 1 February 2022, including new operation codes for buy-ins in payment systems.System of cash penalties for late settlement
Details concerning the calculation of cash penalties under CSDR settlement discipline, including a description of requirements, regulations and market practice, fees, and the complaint template are available on the KDPW website under the tab CSDR - system of cash penalties (link
). KDPW regulations
Amendments to regulations effective as of 1 February 2022:
- Resolution No. 51/938/21 of the Supervisory Board of KDPW S.A. dated 8 November 2021 published on 18 January 2022 (link),
- Resolution No. 48/935/21 of the Supervisory Board of KDPW S.A. dated 8 October 2021 published on 16 December 2021 – amending the KDPW Table of Fees under § 1 point 1 items (f) to (m) of the Resolution (link),
- Resolution No. 60/2022 of the Management Board of KDPW S.A. dated 18 January 2022 amending the Detailed Rules of Operation of KDPW and the KDPW Registration Procedures (link)
- Resolution No. 61/2022 of the Management Board of KDPW S.A. dated 18 January 2022 amending the Resolution concerning the execution of payments arising from the settlement of transactions and other operations carried out by KDPW and concerning clearing banks (link)
All materials and communications including memos from Settlement Discipline Working Group meetings are available at:
- the KDPW website (link)
- the KDPW_CCP website (link)
- the structures of the ISO 20022 messages are available on MyStandards.