KDPW_CCP granted approval to clear repo transactions on TBSP platform
25 April 2022 Poland
Image: thodonal/stock.adobe.com
KDPW_CCP, a clearing house and member of the KDPW Group, has announced it will begin clearing conditional transactions concluded on the Treasury BondSpot Poland (TBSP) platform.
The two firms have collaborated to develop a model for clearing TBSP repo transactions in KDPW_CCP, with settlement in risk management model KDPW.
This model supports trade reporting for repo transactions to a trade repository and establishes rules for exchanging post-clearing messages.
Having secured regulatory approval from the Polish Financial Supervision Authority on 3 March 2022 to clear repo transactions, the CCP will offer clearing services for classical repo transactions in treasury securities registered in KDPW, excluding index-linked bonds. This will include novation, clearing, exposure monitoring, risk management, and settlement support.
In connection with the new service, which is a project under the government-backed Capital Market Development Strategy, KDPW_CCP has developed regulations which define the terms of repo settlement, risk management, handling of trade settlement fails and clearing member defaults.
Speaking on the announcement, Katarzyna Szwarc, plenipotentiary of the minister of finance for the Capital Market Development Strategy, says: 鈥淭he launch of central clearing of repo transactions makes them safer and brings the Polish capital market closer to the world鈥檚 most developed markets in terms of infrastructure.
鈥淚 expect that the new solution will encourage financial institutions to participate in the repo market, which will enable the creation of interest-rate benchmarks based on repos.鈥�
Maciej Trybuchowski, president of KDPW_CCP, explains: 鈥淭he clearing of repo transactions is yet another step in the development of the services of the KDPW_CCP clearing house. The safety of clearing will be significantly improved for market participants, improving liquidity on the market.
鈥淐learing transactions in a clearing house ensures full anonymity of trade on the market and helps to considerably mitigate clearing risks of transactions and eliminate the problem of counterparty risk limits.鈥�
The two firms have collaborated to develop a model for clearing TBSP repo transactions in KDPW_CCP, with settlement in risk management model KDPW.
This model supports trade reporting for repo transactions to a trade repository and establishes rules for exchanging post-clearing messages.
Having secured regulatory approval from the Polish Financial Supervision Authority on 3 March 2022 to clear repo transactions, the CCP will offer clearing services for classical repo transactions in treasury securities registered in KDPW, excluding index-linked bonds. This will include novation, clearing, exposure monitoring, risk management, and settlement support.
In connection with the new service, which is a project under the government-backed Capital Market Development Strategy, KDPW_CCP has developed regulations which define the terms of repo settlement, risk management, handling of trade settlement fails and clearing member defaults.
Speaking on the announcement, Katarzyna Szwarc, plenipotentiary of the minister of finance for the Capital Market Development Strategy, says: 鈥淭he launch of central clearing of repo transactions makes them safer and brings the Polish capital market closer to the world鈥檚 most developed markets in terms of infrastructure.
鈥淚 expect that the new solution will encourage financial institutions to participate in the repo market, which will enable the creation of interest-rate benchmarks based on repos.鈥�
Maciej Trybuchowski, president of KDPW_CCP, explains: 鈥淭he clearing of repo transactions is yet another step in the development of the services of the KDPW_CCP clearing house. The safety of clearing will be significantly improved for market participants, improving liquidity on the market.
鈥淐learing transactions in a clearing house ensures full anonymity of trade on the market and helps to considerably mitigate clearing risks of transactions and eliminate the problem of counterparty risk limits.鈥�
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