KDPW_CCP Clearing House Closes First Year of Operation
The clearing house KDPW_CCP clears and guarantees clearing of trade on the Polish capital market. The value of trade in 2011 was over PLN 616 billion and the number of cleared transactions is 20 million transactions per year or over 50 thousand transactions per day including bank holidays.
KDPW_CCP was spun off from the structure of the National Depository for Securities (KDPW) on 1 July 2011. It is a joint stock company whose sole shareholder is the National Depository for Securities. “The activity of KDPW_CCP is important to all participants of the capital market: Polish and international individual and institutional investors, investment firms, banks, brokers and market operators. The function of the clearing house is to clear trade timely in safely,” said Iwona Sroka, President and CEO of KDPW_CCP.
KDPW_CCP clears trade in cash and derivative instruments on the regulated market and in the alternative trading system as well as trade outside organised markets (e.g., OTC trade). KDPW_CCP clears among others trade on the WSE’s Main Market, the NewConnect market, Catalyst, and BondSpot.
Another function of the clearing house is to guarantee the clearing of trade in order to ensure safety and clearing in the event of default of a clearing member.
For this purpose, the clearing house applies global risk management standards and uses a multi-tiered clearing guarantee system including:
KDPW_CCP Statistics 2011*
- individual margins (both for cash and derivative trade);
- a clearing fund;
- KDPW_CCP equity (currently PLN 200 million).
* KDPW_CCP operates formally as of 01.07.2011. Until that time, trade was cleared by KDPW.
|Total number of operations cleared by
|Total value of operations cleared by
Source: Own study
In the past year, which was its first full year of operation, KDPW_CCP implemented new projects. The key project was the new OTC derivatives clearing service. This is important as European Union regulations, i.e., EMIR, require clearing of trade in standardised OTC instruments in CCP clearing houses. “Together with representatives of the biggest banks active in Poland, we are preparing a service consistent with European regulations which enter into force as of 2013. As a result, OTC trade on the Polish market will be cleared by the local clearing house KDPW_CCP. The OTC market is an important segment of our financial market, whose trading value is a multiple of the capital market,” said Iwona Sroka.
In June 2012, the share capital of KDPW_CCP was increased to PLN 200 million. This means that the share capital of the clearing house was increased by PLN 100 million – additional resources supporting the multi-tiered clearing guarantee system. KDPW_CCP has been equipped with PLN 200 million of equity as an important step in the implementation of a project aiming to serve the banking sector. It is also a measure preparing the company to obtain the status of qualified central counterparty within the meaning of the Capital Requirements Directive (CRD) and to have the company authorised as a central counterparty under the draft Regulation of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories (EMIR).