Slawomir Zajac, director of the KDPW Trade Repository (TR) and board member of ANNA, speaks to SFT about why small is often beautiful in the TR space, bringing surety, technical innovation and a strong commitment to global standards
KDPW is fully authorised by the European Securities and Markets Authority (ESMA) as an EU trade repository under the European Market Infrastructure Regulation (EMIR) and the Securities Financing Transactions Regulation (SFTR). It is also authorised by the Polish Financial Supervision Authority as an approved reporting mechanism (ARM) under the second Markets in Financial Infrastructure 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, securities settlement, custody and safekeeping offered by KDPW, and regulatory reporting services under MiFID (as an ARM), EMIR and SFTR (as a trade repository).
We are a stable, public trust organisation with 27 years of experience and a focus on the entire capital market. We know that many entities choose KDPW TR owing to the quality of our service, the trust we enjoy, and our advanced technology. We are committed to continuous development.
Customer support: small is beautiful… and safe
While we have attracted many large clients established outside Poland and increased our market share in the last year, we remain the EU’s smallest TR. This has upsides — in fact, nothing but upsides — for our clients. We are responsive to reporting entities that we support in meeting reporting obligations, aligning with regulatory requirements and managing relationships with local supervisors when necessary. We help clients to identify new technology solutions which facilitate and support communication with the TR and improve the quality of our service. We have demonstrated our ability to scale up our operating capacity quickly, as demonstrated after CME’s decision to terminate their reporting service in 2020. Our capacity spans both the EMIR and the SFTR reporting services.
Client on-boarding and training
Our customer service strategy not only includes porting, which is a one-time operation, but also supports client on-boarding and reporting, which is a continuous process subject to change in line with regulatory requirements. Our solutions are simple. We focus on providing reliable and accessible customer service which ensures that clients can meet their timely reporting obligations. Our key strengths include a free-of-charge test environment and continuous expert support for account managers. This support continues throughout the duration of live reporting, subject to time priorities which are even more stringent than in the educational environment.
Customer relationship managers present and clarify business terms of the service and maintain long-term customer relations, including notification of upcoming regulatory amendments. All resulting modifications to the system are first implemented in the free-of-charge test environment which is available to clients. Expert account managers ensure smooth harmonisation with these modifications.
Data transfers
Our key strengths include our track record. We have taken over some of CME’s large clients, which we migrated smoothly over a single weekend. This shows that a small TR can be attractive to large reporting entities. By comparison, other providers were porting to new TRs over multiple weekends. As the operator of an EMIR Trade Repository, we have considerable experience in porting across different TRs, including KDPW and UV. As SFTR porting follows the same guidelines, we have established the necessary procedures and systemic solutions.
Given our solid operational relations with the UV Trade Repository, we can jointly complete the migration of prospective clients and provide all necessary support and coordination to existing UV clients. Importantly, porting is offered free of charge, which means that transfers of reporting entities to KDPW encounter no financial barriers.
Attractive pricing
Given that we do not provide a global service that is oriented 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 the long-term experience that we have within the KDPW Group.
Technology and standardisation: experience with ISO and XML standards
KDPW TR has always supported reporting in XML format based on the experience that we have within KDPW Group. In our opinion, a single standard and format is necessary to ensure top data quality and regulatory compliance. For many years, we have offered what will soon be a legal obligation under EMIR and has already become a requirement under SFTR. This has enabled reporting entities to automate their processes, while enhancing the quality of their reporting.
KDPW is a strong supporter of standardisation and the application of global standards, including International Securities Identification Number (ISIN), Classification of Financial Instruments (CFI), Financial Instrument Short Name (FISN), Legal Entity Identifier (LEI), Unique Product Identifier (UPI) and Unique Transaction Identifier (UTI). Applying standards, including ISO standards, is the only way to cut the costs for the entire financial market. As a member of the Association of National Numbering Agencies (ANNA) since 1996, KDPW is familiar with the effort it takes to implement standards across the board.
However, more often than not, the key challenge is not so much the cost of standard implementation as the dedication necessary to convince the decision makers. KDPW has always used ISIN and CFI codes in its settlement system and was among the first operators globally to introduce FISN and require all clients, including issuers, to hold an LEI. Meanwhile, we have developed a database of ISIN codes linked to issuer LEIs. In this regard, and when it comes to the broad application of XML messages, we are EU leaders, which is our key competitive advantage. Even if this approach is not commonly shared, I trust that we will achieve our goals, as we have so far, in the standardisation of our solutions.
Simple solutions: Pure TR
We design our solutions with a focus on rapid and easy communication. Our solutions are simple and free from any risk of modification of the contents of reports. We focus on the top priorities of a fast and reliable service. We validate all reports in real time. We respond within seconds with potential error codes and descriptions if required. We offer A2A data exchange to larger clients and provide a simple graphic user interface (GUI) to all clients, featuring access to the report database and message history. Our applications and solutions are complemented by professional customer service. We are positive that our offer is attractive to prospective clients.
A one-stop shop for multiple services
KDPW continues to expand its service portfolio. Our top priority is to meet the needs of our long-time clients and to ensure customer satisfaction. To provide these customers with continuous support, we are constantly adding services to our portfolio. New services attract new clients and new market segments, while we gain valuable experience and acquire valuable business relations.
