Source: Poland National Depository for Securities
The National Users Group NUG_PL - Polish task force assessing the feasibility and procedure of connecting the Polish market to Target2Securities, held its first meeting at the National Depository for Securities (KDPW). The session organised by KDPW in partnership with the National Bank of Poland (NBP) was attended by representatives of banks and brokerage houses, market organisations, the Warsaw Stock Exchange (WSE), the Ministry of Finance, and the Polish Financial Supervision Authority (KNF).
One of the first tasks of NUG_PL is to draw up a list of barriers and risks related to the accession of KDPW and Polish entities to T2S. For this purpose, KDPW will carry out broad consultations with participants and institutions of the Polish capital market. An impact analysis of KDPW's participation in T2S will be prepared. "As the central institution of the Polish market, KDPW is leading the work of NUG_PL in partnership with the National Bank of Poland. We want to develop the best possible terms of T2S accession to the advantage of our market: banks, brokerage houses, and investors," said KDPW CEO Iwona Sroka.
At the meeting, NBP representatives presented the origin of the Target2Securities platform, its history and project management principles. On 6 July 2006, the Governing Council of the European Central Bank decided to initiate work on T2S. The system will be operational in mid-2014.
NBP Payment System Department Director Adam Tochmański said: "Notwithstanding major integration and consolidation trends, the settlement-depository infrastructure in the eurozone remains very diverse and fragmented. Recently implemented cost analyses of securities settlement systems demonstrate that the cost of trans-border clearing and settlement of transactions is much higher than on local markets."
KDPW Strategy and Business Development Department Director Sławomir Pycko described the opportunities and benefits of Target2Securities as well as its risks to the business of capital market operators. Dorota Grzegorczyk of the KDPW Strategy and Business Development Department outlined technical aspects of the T2S platform including new functionalities not yet available in Poland as well as possible accession paths for Poland: either upon Poland's accession to the eurozone or when T2S becomes operational (the platform will support settlements not only in the euro).
The Target2Securities IT platform is being developed by initiative of the euro-area central banks in co-operation with the central securities depositories of European countries. The mission of T2S is to facilitate and reduce the cost of trans-border settlement of transactions in securities based on the DVP (delivery vs. payment) principle in central bank money. In technical terms, the project consists in outsourcing of settlement functions to the T2S platform.