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National Depository for Securities (KDPW). 2 Overview of the Polish Capital Market National Depository for Securities (KDPW) Polish Financial Supervision.

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Presentation on theme: "National Depository for Securities (KDPW). 2 Overview of the Polish Capital Market National Depository for Securities (KDPW) Polish Financial Supervision."— Presentation transcript:

1 National Depository for Securities (KDPW)

2 2 Overview of the Polish Capital Market National Depository for Securities (KDPW) Polish Financial Supervision Authority (KNF) Markets Financial institutions & Intermediaries Issuers Institutional investors Individual investors National Bank of Poland (Clearing Bank)

3 3 KDPW – history & ownership 1991 – 1994: An integral part of the Warsaw Stock Exchange 1994 – Present : Independent joint - stock company 1997 – Clearing of derivatives 1998 – Multilateral cash netting for exchange and non-exchange market 2002 – RTGS introduced 2003 – First foreign shares listed and settled 2009 – New Depository Clearing & Settlement System (NSDR) Current shareholders (since 1999) The State Treasury - 1/3 The Warsaw Stock Exchange - 1/3 The National Bank of Poland - 1/3

4 4 Mai n KDPW Responsibilities Custody of all securities admitted to trading following public issue Reconciliation and monitoring Clearing and settlement of transactions executed on regulated markets: the Warsaw Stock Exchange and BondSpot; and outside the regulated markets (New Connect, MTS-Poland) Processing of corporate actions Assigning ISIN codes for Polish issues (National Numbering Agency) Risk management –management of: Settlement Guarantee Fund covering regulated markets & ATS Collateral system for derivatives, Collateralisation of security loans in automatic securities lending - borrowing system

5 5 Other KDPW Responsibilities Additional Services: Management of the Investor Compensation Scheme For the Polish Social Security System: Transfer payments between open-end pension funds Management of the Pension Guarantee Fund Other: Membership of European and international associations and working groups Education, promotion, sponsorship

6 6 Securities registered in KDPW All securities admitted to trading in the regulated market must be registered in KDPW Currently, the following securities are recorded in the KDPW system: Shares (foreign and domestic) Bonds (Treasury, Central Bank, Corporate, Municipal, Convertible, EIB, with priorities rights, non-public bonds, mortgage bonds) Investment Fund Certificates Derivatives Futures Contracts (WIG20 index, currency, share) Index Participation Units Options (European style), (WIG20 index, share) Exception: Treasury bills - custody, clearing and settlement in the National Bank of Poland system

7 7 Basic principles of Clearing and Settlement All securities settled in KDPW are dematerialised and transfers are made by book-entry between KDPW participant accounts Mandatory asset segregation (own assets, client assets) Change of ownership at the moment of book-entry in securities account DvP Settlement model: BIS model I, BIS model II Settlement : T+2, T+3 - for regulated - market trades – SE, Bond Spot T+0 to T+n - for non-regulated market transactions – OTC Two settlement channels: RTGS DVP , FOP Multiple batch system Cash leg settlement CBM - in the National Bank of Poland for PLN and Euro CLB for other currencies Settlement liquidity facilities securities L&B automatic and on-request repo buy-in, sell-out

8 Number of investement accounts operated by KDPW Participants 8

9 KDPW in Figures - January 2010 Number of KDPW Participants, Including: 72 Resident participants 71 Brokerage houses 23 Bank 15 Other 33 Non –resident participants 1 Other 1 Issuers 589 Foreign issuers 36 Domestic issuers 553

10 KDPW in Figures (2) January 2010 Capitalisation Securities PLN Shares PLN - Domestic issuers PLN -Foreign issuers PLN Investement certificates PLN

11 11 Daily settlement schedule : multibatch and RTGS - 6 settlement sessions a day with intra-day finality after each session Basic principles BATCHES RTGS 8.00 Technical DVP FOP DVP FOP Technical DVP FOP DVP FOP

12 12 KDPW in the Polish capital market SellerBuyer Trade feed = Already matched for settlement Cash accounts of the seller/ sellers custodian cash clearer in NBP Cash accounts of the Buyer/ buyers custodian cash clearer in NBP Trade Trade execution Markets Trade execution Post-trading processing flow Securities accounts of the Seller / sellers custodian Securities accounts of the Buyer / buyers custodian

13 Links with foreign CSDs EVK Euroclear Sweden Links created with foreign CSDs (FOP links) in connection with the dual listing of shares on the WSE. More FOP and DVP links planned.

14 Basic principles of dual listing Foreign shares quoted on WSE in PLN Clearing and settlement in KDPW in PLN Dividends paid to Polish shareholders in foreign currency Transaction finality – entry on the participants KDPW account Shares need to be registered on KDPW account in foreign CSD to be traded on the WSE The transfer may be settled intra-day (RTGS in KDPW)

15 Principles of KDPW cross-border links Free of Payment transfers The links work on a Free of Payment (FOP) basis, which means that securities will be transferred without a corresponding transfer of cash. The links may in future be upgraded to a bilateral DVP link, once a relevant business case has been identified and the appropriate legal conditions have been met.

16 Links with foreign CSDs NoCSDCountryType of linkCompany*Year of opening 1.KELERHungaryIndirectMOL EVKEstoniaDirectOlimpic Entertainment Group Silvano Fashion Group OeKBAustriaDirectWARIMPEX Immoeast CDCPSlovakiaDirectAsseco Slovakia Clearstream Frankfurt GermanyIndirect– CBL**bmp2004 6Monte TitoliItalyIndirect – CBLUnicredito Italiano DTCUSAIndirect– CBLCEDC SCPCzech Republic Indirect – CBLCEZ Euroclear France FranceIndirect– CBL Indirect – EB *** ORCO Belvedere Euroclear UK & IR UKIndirect – EBAtlas Estates Plaza Centres Euroclear Sweden SwedenIndirect - EBReinhold2007 * ** Clearstream Banking Luxembourg *** Euroclear Bank

17 Plans for the future Romania (Indirect) Canada (Indirect) 2010

18 KDPW Vision Build a robust capital group by 2013: Anticipate competitive challenges; Build a service portfolio based on state-of-the-art, innovative technologies and solutions creating value for capital market participants; Support the development of a regional centre in Warsaw in active co-operation with other Polish and foreign market participants with KDPW as the main depository-settlement institution in Central and Eastern Europe

19 19 KDPW Strategic Goals (1) Introduction of a new KDPW business model(2) Positioning KDPW as the leading CSD and clearing house in the CEE region(3)KDPW integration with European infrastructures(4) Introduction of new services to increase the value of the KDPW capital group(5) Raising the standard and scope of services currently provided(6) Optimisation of the KDPW capital group business processes(7) Improving the input and skills of KDPW capital group personnel in order to meet the strategic goals (8) Promoting the KDPW capital group corporate image and products and services through enhanced corporate communication

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