KDPW_CCP clearinghouse files for authorisation under EMIR
04 July 2013 Warsaw
Image: Shutterstock
KDPW_CCP has filed an application with the Polish Financial Supervision Authority to be authorised as a clearinghouse under the European Market Infrastructure Regulation (EMIR), which sets out single requirements for clearinghouses in the EU.
The authorisation will confirm KDPW_CCP’s capacity to provide services in compliance with EU standards and allow parties required to clear specific classes of OTC derivatives to fulfill the obligation.
KDPW_CCP has been working to prepare its procedures, regulations and technologies for the authorisation, which, under the regulation, is to be granted by a college comprised of representatives of the Polish Financial Supervision Authority, the European Securities and Markets Authority and the National Bank of Poland.
The novation into the Polish legal system allows KDPW_CCP to take over the rights and obligations of the original counterparties to a trade upon its acceptance for clearing. With an adequate own capital and clearing guarantee system, KDPW_CCP has taken over a material part of investment risks involved in potential default of a trade party.
“The key modifications which we have put in place in the clearing house and in its legal environment included our efforts to introduce novation into the Polish legal system, to increase the own capital of KDPW_CCP adequate to the size of the served markets, to change the default system waterfall, and to set up a risk committee,” said KDPW_CCP president and CEO Iwona Sroka.
The risk committee appointed on 12 June 2013 provides opinion and advice on all matters that could affect risk management. The committee also gives opinions on transaction clearing rules and detailed rules of transaction clearing.
The authorisation under EMIR at the same time allows the clearinghouse to become a qualifying CCP under the draft Capital Requirement Regulation (CRR).
“Under CRR, central counterparties which comply with the requirements of EMIR may benefit from a reduced risk weight for trades to which they become a counterparty following novation,” added Sroka.
The authorisation will confirm KDPW_CCP’s capacity to provide services in compliance with EU standards and allow parties required to clear specific classes of OTC derivatives to fulfill the obligation.
KDPW_CCP has been working to prepare its procedures, regulations and technologies for the authorisation, which, under the regulation, is to be granted by a college comprised of representatives of the Polish Financial Supervision Authority, the European Securities and Markets Authority and the National Bank of Poland.
The novation into the Polish legal system allows KDPW_CCP to take over the rights and obligations of the original counterparties to a trade upon its acceptance for clearing. With an adequate own capital and clearing guarantee system, KDPW_CCP has taken over a material part of investment risks involved in potential default of a trade party.
“The key modifications which we have put in place in the clearing house and in its legal environment included our efforts to introduce novation into the Polish legal system, to increase the own capital of KDPW_CCP adequate to the size of the served markets, to change the default system waterfall, and to set up a risk committee,” said KDPW_CCP president and CEO Iwona Sroka.
The risk committee appointed on 12 June 2013 provides opinion and advice on all matters that could affect risk management. The committee also gives opinions on transaction clearing rules and detailed rules of transaction clearing.
The authorisation under EMIR at the same time allows the clearinghouse to become a qualifying CCP under the draft Capital Requirement Regulation (CRR).
“Under CRR, central counterparties which comply with the requirements of EMIR may benefit from a reduced risk weight for trades to which they become a counterparty following novation,” added Sroka.
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