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KDD QuickClear Information System for CSD - General Presentation 2 nd AECSD Conference, Moscow, October 2005

KDD QuickClear Information System for CSD - General Presentation 2 nd AECSD Conference, Moscow, October 2005. Davor Pavič Deputy President & COO KDD d.d. Ljubljana, Slovenia. General information on the IS.

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KDD QuickClear Information System for CSD - General Presentation 2 nd AECSD Conference, Moscow, October 2005

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  1. KDD QuickClear Information System for CSD- General Presentation2ndAECSD Conference, Moscow, October 2005 Davor Pavič Deputy President & COO KDD d.d. Ljubljana, Slovenia

  2. General information on the IS • Successfully implemented on 06.06.2005 and since then is fully supporting all of the KDD operations • Result of 10 years of experience in the CSD business • In-house developed • Is a product based on latest Microsoft technologies • Composed of 3 main components (Client CSD, OrderEngine, Database) • Asynchronous system messaging is being used • XML data messaging system implemented • Transactional and data STP supported

  3. General information on the IS • Compliant for the usage in the ESCB monetary operations • ISO 6166 (on ISIN codes assignment), ISO 10962 (on CFI instruments), ISO 4217, ISO 3166, ISO 13616, ISO 10383, ISO 9362 compliant • Implemented standards (HTTP, SSL PKI, XML, WebServices, Digital Signatures, IBAN,..) • High degree of standardisation= lower costs for all the participants in the pre and post-trade processing chain!!!

  4. IS and the Business Environment Regulatory bodies Brokers Stock Exchange Customer Banks CSD Issuers Central Bank Investment funds, pension funds

  5. WebServices • Data transfers from the IS are downloadable on-line in real time to all the system participants through WS • A variety of standardized WS already offered (list of securities issued, list of member securities accounts, list of members accounts positions, list of member transactions, list of member trades on the stock exchange, list of member third party rights, member fees,..) • Easy and fast scalability of WS in accordance to the business needs= cheap and customized reporting, as demand for various information from CSD systems can also be seen as a interesting business oportunity.

  6. CSD Client structure • CSD Functionality Navigator • Functionality window • Messaging window

  7. Supported functionalities CSD System functions and related services include: • Basic functions and services; • Services related to the non-organized market; • Functions and services related to the organized market; • OTC – DVP transactions; • Takeover functionality; • Corporate actions processing; • Fees calculations; • Inquiries and data transfers.

  8. Supported functionalities • Basic functions and services are: • Identification Master File(in the IS all the identification parameters of parties, security holder, members, issuers,.. are maintained by the unique identification master file so changes of any parameter occur just through the single point of entry) • Instruments- the IS supports securities issues: In dematerialized form, In immobilized form, with vault functions - deposits/withdrawals. • Securities Accounts Maintenance - the ISsupports securities accounts management (opening, closing, updating) and standard account structures (IBAN standard - ISO 13616) and numbering. • Register of Securities Holders – the IS provides a sharebook and book of debenture holders evidence maintenance.

  9. 1. Securities Transactions supports transfer orders for: Intra Account Movements (between the accounts of same securities holder), Inter Account Movements (to the account of the new securities holder), Third-party rights, Disposal limitations. All the transfers are processed in real time. 2. Third-Party Rights and Disposal limitations Third Party Rights: - Pledge, - Usus Fructus, - Redemption Right, - Preemptive Right, - Dispose Denial Right, - Block Inventory. Disposal limitations: - Interim Order, - Supervisory Order, - Handover Decree, - Claim Enforcement, - Tax Execution, Pledge Realization Interim Order. 3. Certificated Securities Services related to the non-organized market

  10. Functions/Services Related to the Organized Market • IS supports two basic functionalities related to the “organized securities market”: • Calculation of net cash clearing positions deriving from securities trades concluded on the organized market. • Settlement of securities on a gross basis. In addition IS supports: Risk Management functions Registry codes functionalities

  11. OTC-DVPTransactions • IS provides RTGS OTC-DVP settlement mechanism to settle large valuetransactions with intraday finality. • A Bank for International Settlements Model 1 (gross securities and funds settlement, with delivery occurring at the same time as the payment) DVP settlement mechanism. • As the securities transactions occurring conditionally upon delivery of funds, the principal risk is eliminated • OTC-DVP services comprise: • Direct bilateral trade matching; • Three step order processing (post, confirm, execute); • Simultaneous final settlement (DVP); • Real-time settlement processing.

  12. Takeover Functionality • IS System provides complete functionality on the basis of the risk minimization by adopting DVP mechanism in the takeover acceptance and securities transfers process.

  13. Corporate Action Processing Functions • Basic functionality related to any corporate action in the CSD System is performed by: - securities cancellation and removal from the central registry, - interim calculations of new securities positions and eventual partial rights, - securities issue and creation of new securities, - eventual transfer of third party rights and limitations of disposals to newsecurities.

  14. Fees Calculations • Fees calculation means functions for automatic and dynamic real-time calculation according to the pre-set formulas, service tariff and quantity of service. • Real-time calculations are provided for market, off-market and OTC-DVP transactions with online inquiries for the CSD operator and CSD members.

  15. Inquiries and Data transfers • The IS System includes standard list of inquiries. • In addition the IS System includes data transfers through Web services.

  16. Conclusion • Second generation CSD system • Complete Paralell running and Data migration know-how available. • Complete IS documentation offered (for example Functional overview of the system, On-line help integrated into the IS, Error Message Guide, Operation Guide, Installation Guide, Technical Architecture).

  17. Q&A Thank you for your kind attention. KDD- Central Securities Clearing Corporation, Ljubljana, Slovenia www.kdd.si

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