Swift, the financial messaging provider for more than 9,700 financial institutions and corporations in 209 countries, has announced that the Polish central counterparty (CCP) KDPW_CCP will be able to use ISO standardised messaging over SWIFT to communicate with its clearing participants.
"Adopting standardised messaging enables KDPW group to align with European market harmonisation initiatives, and will reduce operational risks and costs for our clearing community, as well as KDPW_CCP itself," says Iwona Sroka, President and CEO of KDPW_CCP.
SWIFT already provides and is further developing a wide range of standardised messaging solutions to address the needs of CCPs and their communities to increase efficiency and reduce risk. These include CCP to settlement system messaging, CCP to clearing member messaging for cash and derivatives markets, and messaging between SWIFT's Accord for Securities matching application and multiple CCPs.
KDPW_CCP will join a growing number of clearers (and their communities) that are adopting SWIFT to support improved risk and collateral management, streamline communication in a fragmented marketplace and minimise operational costs.
Benefits of SWIFT for KDPW_CCP and its clearing members
KDPW_CCP clearing members will be able to reuse their existing SWIFT connectivity to receive messages covering clearing flows for cash equities.
KDPW_CCP will use SWIFT XML messages developed according to the ISO 20022 methodology - SWIFT's strategic Clearing solution. These messages cover trade leg management, position and settlement management, and risk and collateral management.
Responding to new regulation, KDPW will launch a new CCP service for OTC derivatives in 2012. KDPW CCP intends to adopt SWIFT's Accord for Treasury for matching OTC derivatives transactions. This will extend even further the benefits of standardisation, operational risk and cost reduction and improved customer service for KDPW_CCP and its clearing community.
SWIFT's Clearing solution streamlines clearing and collateral management communications. By reusing SWIFT, market participants can avoid implementing proprietary formats and networks, and further extend the benefits of their investment in SWIFT. They can be up and running with their CCP communications more rapidly, and the use of international standards minimises the risk of errors and misinterpretation.
The solution enables clearers like KDPW_CCP to extend services to their communities of users. Clearers also benefit from being able to reuse their SWIFT infrastructures, and sign up new users more quickly and easily.
Alain Raes, chief executive, EMEA, SWIFT, says: "We are delighted that KDPW_CCP has chosen to offer standardised clearing messages over SWIFT to its customers. SWIFT has a vital role to play in enabling interoperability in the clearing space. The combination of ISO standardised messaging and SWIFT connectivity enables cost and risk reduction for financial institutions that must connect to multiple clearers, while enabling CCPs themselves to offer the best quality of service to their clearing communities."