The clearing house KDPW_CCP has signed agreements with two platforms which will be sending OTC derivatives trade clearing instructions to KDPW_CCP. The clearing house will be using two services: Swift and MarkitServ.
In practice, banks which trade in OTC derivative instruments with other banks will match their trades over one of the two platforms - SWIFT or MarkitSERV, which will then send clearing instructions to the clearing house KDPW_CCP for clearing in its systems. Trade cleared through KDPW_CCP will be covered by a multi-tier guarantee system ensuring safety of clearing.
"Under the signed agreements, participants of OTC trade clearing - local and international banks - will get business and communication solutions necessary to participate in clearing of OTC instruments via KDPW_CCP," said KDPW_CCP CEO Iwona Sroka.
Alain Raes, Chief Executive, EMEA, SWIFT, says: "We are delighted that KDPW_CCP has chosen to offer its customers the opportunity to match OTC derivatives instructions and send standardised clearing messages using our Accord matching application. By choosing this option, KDPW_CCP's members can take advantage of SWIFT's industry standard messaging and its matching solution to further reduce risks and costs by reusing their existing SWIFT connection and using a straightforward product that has already seen encouraging adoption rates in the Polish market. We remain committed to supporting all initiatives undertaken by KDPW_CCP and its customers to comply with European harmonisation and regulation and build a world-class financial market infrastructure."
"MarkitSERV is pleased to provide KDPW_CCP with its market-leading infrastructure, connectivity, workflows and messaging that enable both international and domestic banks to easily send trades for clearing. Worldwide, MarkitSERV is now connected to more than ten CCPs for clearing CDS, interest rate swaps, equity derivatives and foreign exchange. Providing our clients with a single point of access to multiple clearinghouses and reporting repositories is an important part of how we are helping the financial industry adapt to changing market structures brought on by regulationon and the need to mitigate risk," said Jeff Gooch, CEO of MarkitSERV.
In the first phase, starting in January 2013, KDPW_CCP will clear forward rate agreements (FRA), interest rate swaps (IRS) cleared in PLN, and repos. From January 2014 onwards, further classes of OTC instruments will be cleared: FX swaps, FX options, interest rate options, currency interest rate swaps (CIRS).
The agreements signed with SWIFT and MarkitSERV are another step in the implementation of a project of launching the clearing of selected OTC instruments and repos, initiated in response to the planned regulation EMIR which will require the clearing of selected classes of OTC instruments via a central counterparty (CCP) and the reporting of trades to a trade repository. According to the timetable, the new clearing service will be available to participants as of January 2013.