The Central Securities Depository of Poland (KDPW) changes the settlement cycle from T+3 to T+2 as of 6 October 2014. The shorter settlement cycle will have a positive impact on KDPW and KDPW_CCP participants as well as investors.
For investors, transactions will be closed within a shorter period of time: investors will receive securities (buyers) and cash (sellers) sooner. The new settlement cycle will also have an impact on processes of the exercise of rights attached to securities, which will be transferred 1 day earlier than before.
Financial instruments subject to the T+2 settlement cycle (previously T+3):
• Shares
• Rights to shares
• Depository receipts
• ETFs
• Investment certificates
- The Polish CSD KDPW and our participants are ready for the implementation of the new settlement cycle. The change harmonises the Polish market with the standards under implementation in the European Union and follows from the harmonisation of the KDPW rules to the CSDR (Regulation of the European Parliament and of the Council on improving securities settlement in the European Union and on central securities depositories) which become effective to that extent on 1 January 2015 - said Iwona Sroka, President and CEO of KDPW.
For dual-listed companies, a settlement cycle on the Polish market which is identical as that used in most European markets will have a positive impact on the record dates of payments from securities, in particular dividends. Thanks to the synchronised settlement cycle, securities will be marked as “ex-date” on the same day on the Polish market and on foreign trading platforms. Consistent information is crucial to the perception of the Polish market by investors present on more than one market, especially involved in arbitrage in such stocks.
For KDPW and KDPW_CCP participants, the change implies a shorter period of maintaining margins for clearing positions.