Securities Finance Times feature article


Slawomir Zajac, KDPW Trade Repository (TR) Director and ANNA Board Member, explains to SFT why the little one is often beautiful in the TR space, bringing safety, technical innovation and a strong commitment to global standards

KDPW is fully authorized by the European Securities and Markets Authority (ESMA) as an EU trade repository under the European Market Infrastructure Regulation (EMIR) and Securities Financing Regulation (SFTR) . It is also authorized by the Polish Financial Supervisory Authority as an Approved Reporting Mechanism (ARM) under the Second Financial Infrastructure Markets Directive and its corresponding regulation (MiFID2 / MiFIR). KDPW provides a full range of post-trade services within the KDPW group, including clearing operated by KDPW_CCP, settlement, custody and custody of securities offered by KDPW, and regulatory reporting services under MiFID (as a ‘ARM), EMIR and SFTR (as deposit transaction).

We are a stable public trust organization with 27 years of experience and a focus on the entire capital market. We know that many entities choose KDPW TR because of the quality of our service, the trust we have and our advanced technology. We are committed to continuous development.

Customer service: small is beautiful … and safe

Although we have attracted many important clients based outside of Poland and increased our market share over the past year, we remain the smallest TR in the EU. This has advantages – in fact, nothing but advantages – for our customers. We are responsive to reporting entities as we help meet reporting obligations, align with regulatory requirements, and manage relationships with local supervisors as needed. We help our clients identify new technological solutions that facilitate and support communication with the TR and improve the quality of our service. We have demonstrated our ability to rapidly increase our operating capacity, as demonstrated after CME’s decision to end its reporting service in 2020. Our capacity covers both EMIR and SFTR reporting services.

Customer reception and training

Our customer service strategy not only includes porting, which is a one-time operation, but also supports customer onboarding and reporting, which is an ongoing process subject to change in accordance with regulatory requirements. Our solutions are simple. We are focused on providing reliable and accessible customer service that ensures customers can meet their reporting obligations in a timely manner. Our main strengths include a free test environment and ongoing expert support for account managers. This support continues throughout the duration of the live report, subject to even stricter time priorities than in educational settings.

Customer relationship managers present and clarify the business terms of the service and maintain long-term customer relationships, including notification of upcoming regulatory changes. All resulting system changes are first implemented in the free test environment made available to customers. Expert account managers ensure smooth harmonization with these changes.

Data transfers

Our main strengths are our track record. We have taken over some of CME’s large customers, which we have smoothly migrated in just one weekend. This shows that a small TR can be attractive to large reporting entities. In comparison, other vendors were carrying new TRs over multiple weekends. As operator of an EMIR commercial repository, we have considerable experience in porting to different TRs, including KDPW and UV. As SFTR porting follows the same guidelines, we have put in place the necessary systemic procedures and solutions.

Given our strong operational relationship with the UV Trade Repository, we can jointly lead the migration of potential clients and provide all the necessary support and coordination to existing UV clients. It is important to note that porting is offered free of charge, which means that transfers from reporting entities to KDPW do not encounter any financial hurdles.

Attractive prices

Since we do not provide a global service geared exclusively towards profit, we are able to offer attractive prices compared to other TRs by maintaining a low cost base combined with top quality service from professional experts and advanced technology based on long service life. the long-term experience we have within the KDPW group.

Technology and standardization: experience with ISO and XML standards

KDPW TR has always supported reports in XML format based on the experience we have within the KDPW group. In our opinion, a unique standard and format is needed to ensure the best data quality and regulatory compliance. For many years, we have proposed what will soon be a legal requirement under EMIR and has already become a requirement under SFTR. This has enabled reporting entities to automate their processes, while improving the quality of their reporting.

KDPW is a strong supporter of the standardization and application of global standards, including International Securities Identification Number (ISIN), Classification of Financial Instruments (CFI), Short Name of Financial Instrument (FISN ), Legal Entity Identifier (LEI), Unique Product Identifier (UPI) and Unique Transaction Identifier (UTI). Applying standards, including ISO standards, is the only way to reduce costs for the entire financial market. As a member of the Association of National Numbering Agencies (ANNA) since 1996, KDPW knows the efforts required to implement standards at all levels.

However, more often than not, the main challenge is not so much the cost of implementing the standards as the dedication required to convince decision-makers. KDPW has always used ISIN and CFI codes in its settlement system and was among the first operators in the world to introduce FISN and require all customers, including issuers, to hold an LEI. At the same time, we have developed a database of ISIN codes linked to issuing LEIs. In this regard, and when it comes to a wide application of XML messages, we are the leaders in the EU, which is our main competitive advantage. Although this approach is not commonly shared, I hope that we will achieve our goals, as we have done so far, in standardizing our solutions.

Simple solutions: Pure TR

We design our solutions with an emphasis on quick and easy communication. Our solutions are simple and free from any risk of modifying the content of the reports. We focus on the top priorities of fast and reliable service. We validate all reports in real time. We respond within seconds with potential error codes and descriptions if needed. We offer A2A data exchange to larger customers and provide a simple graphical user interface (GUI) to all customers, with access to the report database and message history. Our applications and solutions are complemented by professional customer service. We are convinced that our offer is attractive to potential customers.

One stop shop for several services

KDPW continues to expand its portfolio of services. Our top priority is to meet the needs of our long-standing customers and to ensure the satisfaction of our customers. To provide these customers with ongoing support, we are constantly adding services to our portfolio. New services attract new customers and new market segments, while we gain valuable experience and gain valuable business relationships.

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