Settlement means recording securities in registration accounts maintained by KDPW. KDPW performs cash settlement in multibatch and RTGS mode.
Settlement in KDPW is performed as DvP (delivery versus payment: KDPW ensures simultaneous settlement of securities against cash) or FoP (free of payment – KDPW only ensures transfers of securities between participants’ accounts).
The settlement cycle T+2 applies to transactions concluded on the exchange regulated market and in the alternative trading system (ATS) secured with the clearing guarantee system.
According to the applicable international standards, cash settlement is performed in central bank money (PLN). Settlement involves multilateral netting in the multibatch mode, as well as gross settlement (transaction after transaction) in RTGS.
KDPW performs settlement on the basis of instructions provided by KDPW participants or the clearing house KDPW_CCP, or on the basis of documents containing the terms of transactions delivered by the operator of a regulated market or the organiser of an alternative trading system.
Instructions are accepted for settlement if sent as XML messages or MT messages under ISO15022.
Messages available from KDPW have a user-friendly format (XML or MT). In response to sent settlement instructions, participants receive status messages (upon any change of status) as well as a statement message after settlement. The kdpw_stream system also processes instruction status queries, balance queries, and booking list queries.
In addition, kdpw_stream offers:
- 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 acts as an intermediary in automatic lending where a shortage of securities necessary to settle a transaction is identified in the registration account of the responsible participant.