With a view to the transition within the European Union to a shorter settlement cycle (from T+2 to T+1) scheduled for 11 October 2027, the KDPW Group is working to adapt KDPW and KDPW direct participants to the shorter settlement cycle.
Arrangements with market participants are being made within the framework of the S&R NMPG PL (Settlement and Reconciliation National Market Practice Group) led by KDPW representatives. The primary objective of the working group is to identify barriers and develop the necessary solutions to ensure effective operation under the shorter settlement cycle.
The work carried out so far, as well as the analysis of materials produced within the European Union, guides KDPW’s activities in the following areas:
a. implementation of the Partial Release functionality
b. implementation of the “allegement” message
c. further development of the Partial Settlement functionality, including the mandatory nature of this solution
d. alignment of the settlement day schedule with guidelines and the needs of participants
e. changes in the content of settlement orders, including the indication of the “place of settlement”
f. changes in the opening hours of the depository system in connection with the acceptance of settlement orders and the execution of processes for matching settlement orders.
Settlement messages in the ISO 20022 standard
Changes in the area of communication standardisation, closely related to the results of the working groups and the regulations adopted in connection with the implementation of the shorter settlement cycle T+1: The long-term goal of KDPW is to standardise the use of settlement messages under the ISO 20022 standard.
In 2027, we plan to move away from the use of MTxxx messages (compliant with ISO 15022) in the area of settlement, and in subsequent years to introduce the requirement to use messages compliant with ISO 20022 in place of the currently applicable proprietary messages.
The work related to the transition away from the ISO 15022 standard will be of key importance for participants who currently use a solution based on communication via the SWIFT network. In particular, it will be necessary to adapt their own solutions to ISO 20022 compliant messages, as well as to implement appropriate changes in the area of SWIFT network use.
Due to the fact that the ISO 20022 compliant settlement process solution was implemented at KDPW several years ago, we anticipate to review the service and possibly undertake adaptation efforts.
Materials: We plan to provide detailed materials on the planned changes to KDPW’s IT systems by the end of October 2026.
Tests: We expect to open the test environment and start testing in April 2027.
Roll-out: 11 October 2027.
