Until 1 February 2022 KDPW_CCP will implement the changes arising from the provisions of the Commission Delegated Regulation (EU) No No 2018/1229
of 25 May 2018 supplementing Regulation (EU) No 909/2014
of the European Parliament and of the Council of 23 July 2014 with regard to regulatory technical standards on settlement discipline.
The key aspects covered by the Regulation concerning transactions cleared by KDPW_CCP include:
Changes in GK KDPW's systems will be implemented in two phases:
PHASE 1 – 19 April 2021
- calculation and application of cash penalties charged to clearing members that cause settlement fails based on KDPW data;
- distribution of cash penalties to clearing members that are the clearing counterparty to receive securities (penalties will be calculated by KDPW);
- buyback of securities at the request of KDPW_CCP;
- reimbursement of the cost of buyback of securities;
- cash compensation paid to the participant that buys securities if no buyback of securities is available;
- reporting of cash discipline procedures and results to clearing members;
- reporting to KDPW.
- the following functionalities supporting settlement discipline have been implemented:
- changes to the tolerance level functionality;
- changes to the cancellation of settlement instructions;
- modifications to partial settlement functionalities;
- modifications to the processing of the settlement instruction field "Place of clearing".
PHASE 2 - 1 February 2022
- modifications will be introduced to:
- the calculation of financial penalties for late settlement,
- the processing of buy-in transactions,
- the hold-release functionality.
KDPW_CCP is planning to implement a new XML message to report cash discipline procedures, in particular the amount of cash penalties charged for securities settlement fails. Such messages will be sent to participants that cause settlement fails as well as affected participants. Other details concerning settlement fails, the rejection of settlement instructions and the buyback of securities will be communicated by means of existing messages exchanged with clearing members.
Modifications relating to the implementation of KDPW_CCP system solutions supporting settlement discipline – preliminary description of processes and messages
EACH CSDR Settlement Discipline Framework - updated version - July 2020
ESMA Q&A - Implementation of the Regulation (EU) No 909/2014 on improving securities settlement in the EU and on central securities depositories