Automatic Partial Settlement at KDPW as of 4 August
The Central Securities Depository of Poland (KDPW) offers the automatic partial settlement functionality as of 4 August 2014 in order to optimise the trade settlement process.
Automatic partial settlement allows for the settlement of an instruction in part depending on the balance available in a registration account in the settlement system as at the settlement date and the settlement of the remaining part on subsequent days.
It is a service offered by settlement institutions in order to optimise the settlement process. Automatic partial settlement enhances the liquidity of settlement by optimising the settlement of trade in KDPW and improving the liquidity of clearing in KDPW_CCP.
“Partial settlement will reduce the volume of settlement suspensions and consequently charges to KDPW participants. Furthermore, KDPW participants will be able to use the assets in their accounts to the maximum” said Iwona Sroka, CEO and President of KDPW_CCP.
The functionality helps to reduce the volume of suspensions of settlement in the absence of a sufficient quantity of securities of a given type in a depository account necessary for full settlement, and consequently it helps to reduce suspensions of settlement at the record date of payments from securities.
Partial settlement is particularly relevant to those clearing houses which provide KDPW with netted settlement instructions based on multiple instructions from the markets. In case of a shortage of securities necessary to settle an order, partial settlement reduces clearing credits and debits in relations between a clearing house and its participants.
Along with securities netting, launched by KDPW_CCP also on 4 August 2014, the partial settlement service enhances the services provided to banks and brokerage houses – participants of both institutions, reduces the processing cost of such operations, and significantly improves the clearing and settlement process.
These are some of the KDPW Group’s projects aimed at implementing global post-trade service standards on the Polish financial market in order to offer solutions available from the most advanced financial centres of the world.