Clearing & settlement

Poland begins OTC derivatives clearing

Poland's domestic central counterparty, KDPW_CCP, has from today started clearing OTC derivatives trades, as it prepares for new legislation coming into force this year.

KDPW_CCP now offers clearing in zloty-denominated forward rate agreements, interest rate swaps, overnight index swaps, basis swaps, in addition to repo transactions involving Polish treasury bonds. Counterparties can choose to confirm trades using either the MarkitWire or SWIFT Accord platforms, which are responsible for sending clearing instruction to KDPW­_CCP.

Testing of OTC clearing capabilities has been available since 19 November. Next year, the clearer will extend its OTC clearing capabilities to derivatives denominated in other currencies.

Clearing members that become registered as OTC clearing system participants before 29 March 2013 will not have to pay the €12,500 registration fee or the €5,000 participation fee for this year.

KDPW­­_CCP's launch of OTC clearing comes as the industry gears up for the start of a new regime in swaps trading, enacted in Europe via the European market infrastructure regulation.

Where possible, OTC derivatives will be centrally-cleared and traded on exchange-like platforms. Clearing houses will have to work with the European Securities and Markets Authority to obtain approval and determine the types of OTC derivatives that are suited for clearing.

"Sending transactions for clearing to KDPW_CCP means that the transactions are covered by a multi-tiered clearing guarantee system which ensures the safety of payment by the parties," said KDPW_CCP CEO Iwona Sroka.