Warsaw, 4 January 2021
Year 2020 in KDPW Group: The Milestones
The past year transformed our perspective on the world facing the impact of the global COVID-19 pandemic. Our economies and societies were suddenly confronted by a new reality, which also impacted the KDPW Group.
The pandemic was a practical test of the KDPW Group business continuity system, which proved resilient to a crisis. However, 2020 was not merely a year of struggling to survive. According to its development plan, the KDPW Group implemented a number of projects essential to the financial market.
In March 2020, KDPW was authorised under the European regulation CSDR. The decision of the Polish Financial Supervision Authority was instrumental for participants of the Polish capital market, especially banks, brokers and issuers for which KDPW is a key service provider in the safe-keeping and settlement of securities.
In May 2020, ESMA extended the authorisation of the KDPW Trade Repository to include trade reporting under SFTR. As a result, since the reporting obligation came into force on 13 July, KDPW has offered its SFTR trade repository service to clients.
In H2 2020, the EMIR Trade Repository established relations with three data aggregators - clients of the trade repositories CME ETR and NEX Abide which are closing down. As a result, derivatives trades are reported the KDPW EMIR TR on behalf of nearly 200 new financial and non-financial counterparties in Cyprus, the Czech Republic, Germany, Spain, Slovakia, France, Austria, Croatia, Luxembourg and the Netherlands. The number of EMIR TR reports increased by 25% quarter on quarter in Q4 2020. The number of reports nearly tripled year on year in 2020, rising from 56 million to 167 million.
In September 2020, KDPW rolled out new solutions facilitating communication between public companies and their shareholders in alignment with the requirements of SRD II. The new regulations implied modifications to two areas. One of those was the notification of general meetings and other corporate actions, which required modifications of the General Meeting and eVoting applications. The other area was completely new and involved the disclosure of shareholder identification to companies. As a result, issuers gained access to a new service which relies on state-of-the-art technology.
In 2020, we modified the coverage monitoring process. The project defined a new settlement fail framework, which helped to significantly improve the volume and value of settled transactions.
Since December 2020, the LEI application supports automatic completion of key details of legal entities based on records in the database of the Statistics Poland (GUS), which facilitates and accelerates clients’ process of applying for an LEI.
The clearing house KDPW_CCP entered a new segment of the financial market in 2020 and started to clear transactions in the cash segment of Treasury BondSpot Poland. The safety of clearing will largely improve to the advantage of market participants. We expect that the volume of trade will also increase with time. The next step is to clear all-to-all trade and repo transactions on TBSP.
The new KDPW Group Strategy 2020-2024 was approved in 2020. The Strategy defines four complementary business lines dedicated to different client groups. The business lines provide financial market participants with integrated services in the post-trade chain for diverse asset classes based on innovative technology.
Silver lining of the pandemic
The pandemic played a very special role as it accelerated the digitalisation of the economy and many parts of our lives and transformed Poles’ propensity to save. The latter could spark greater interest in the capital market. The trend has already emerged, as demonstrated by an increase in the number of securities accounts. According to figures presented by banks and brokers, 66 thousand new securities accounts were opened in 2020 (as at 30 November 2020).
Number of securities accounts [thou.]
Outlook for 2021
We are planning to implement new solutions based on state-of-the-art technology in 2021. These include the disclosure of shareholder identification to non-public companies whose shares are registered in KDPW and to their shareholders. We are planning to automate the issuance of ISIN, FISC and CFI codes with a dedicated online application. Another project will launch a new statistics presentation portal as well as sales of statistics with available download functions supporting automated data processing.