Rules of Transaction
Clearing
(organised trading)

In connection with the decision of the Polish Financial Supervision Authority of 7 May 2024 approving the amendments to the Rules of Transaction Clearing (organised trading) adopted in Resolution No. 16/595/23 of the KDPW_CCP S.A. Supervisory Board dated 14 June 2023 (subsequently amended by Resolution No. 16/625/24 of the KDPW_CCP Supervisory Board of 25 April 2024), the amendments entered into force on 16 July 2024.

The amendments to the regulations are specifically aimed at:

• aligning the rules with the provisions of Regulation (EU) 2021/23 of the European Parliament and of the Council (EU) 2021/23 of 16 December 2020 on a framework for the recovery and resolution of central counterparties and amending Regulations (EU) No 1095/2010, (EU) No 648/2012, (EU) No 600/2014, (EU) No 806/2014 and (EU) 2015/2365 and Directives 2002/47/EC, 2004/25/EC, 2007/36/EC, 2014/59/EU and (EU) 2017/1132. The following key issues have been set out in the rules:
  • second dedicated resources – intended to cover any losses arising in the event of non-performance by clearing members of their obligations arising from transactions accepted by KDPW_CCP S.A. for clearing or as a result of an event unrelated to the non-performance of such obligations which, in the event of an identified case of default, should be used after the contributions to the relevant default fund have been used. Accordingly, KDPW_CCP S.A. will be obliged to cover losses in the event of non-performance of obligations arising from transactions cleared by KDPW_CCP S.A., which it is obliged to perform using its own assets:
    • before using the assets contributed to the relevant fund, excluding the contribution of the defaulting participant – using the assets constituting the first dedicated resources, taking into account the allocation of these assets,
    • after using all assets contributed, respectively, to the clearing fund or the relevant guarantee fund – using the assets constituting the second dedicated resources, taking into account the allocation of these assets, and subsequently
    • using the remaining own resources earmarked for covering those losses.
  • the possibility for KDPW_CCP S.A., in the cases specified therein, to request clearing members to terminate, in whole or in part, cleared transactions to which they are the other clearing counterparty (tear up) or to reduce the value of the entitlement/interest coupon to which such clearing members are or will be entitled (VMGH). Accordingly, KDPW_CCP S.A. may approach participants in special situations, if the actions taken by KDPW_CCP S.A. do not result in the full performance of the obligation arising from the clearing of a transaction accepted into the clearing system:
    • after using the assets of the guarantee system in the order and in the amount specified in the rules (VMGH),
    • after taking actions in organised trading which do not result in the performance of that obligation in full (tear up). A change to the terms of the transaction will require the consent of clearing members that are the clearing counterparty to at least 2/3 of the value of the positions registered in the clearing system affected by the change, and such clearing members will be required to declare whether or not they give such consent (if they do not give such declaration in due time, they will not be included in the calculation of the qualified majority). In the event of a change to the terms in respect of VMGH, KDPW_CCP S.A. will not be obliged to make payments in respect of the marking to market of transactions in excess of a set haircut distribution ratio, and clearing members will remain obliged to KDPW_CCP S.A. in full to make such payments. In the case of tear up, the clearing counterparties will not be obliged to perform the cleared transaction in the amount subject to a set limit. 
  • the right of KDPW_CCP S.A., which may be exercised against a clearing member if KDPW_CCP S.A. identifies a case of default, to withhold payments to clearing members of:
    • all assets of the transaction clearing liquidity guarantee system, and
    • all marking-to-market payments to which such clearing members are or will be entitled. Such payments will be withheld until actions related to the handling of the clearing member’s default are completed and the clearing member’s positions are closed out, but no later than for a period of 10 business days counting from the date on which the default is identified. KDPW_CCP S.A. will remain obliged to calculate on an ongoing basis the marking-to-market payments to which such clearing members are or will be entitled during the period in which such payments are withheld. After the end of the period in which such payments are withheld, KDPW_CCP S.A. will make such payments to the clearing members (netted to a single cash credit);
  • if KDPW_CCP S.A. activates the recovery plan referred to in Article 9 (1) of Regulation (EU) 2021/23 of the European Parliament and of the Council of 16 December 2020 on a framework for the recovery and resolution of central counterparties and amending Regulations (EU) No 1095/2010, (EU) No 648/2012, (EU) No 600/2014, (EU) No 806/2014 and (EU) 2015/2365 and Directives 2002/47/EC, 2004/25/EC, 2007/36/EC, 2014/59/EU and (EU) 2017/1132, KDPW_CCP S.A. may propose to a clearing member which is party to an obligation in respect of which KDPW_CCP S.A. has not made the payment in accordance with the rules, a different way of fulfilling that obligation, in particular deferring the payment date or modifying the content of that obligation (the consent of that clearing member is required);
  • an increase in the amount of additional contributions to a given fund managed by KDPW_CCP S.A., which will be required to be made by clearing members in the process of handling the default of a clearing member (up to a maximum of 100% of the existing contribution). Accordingly, if, as a result of KDPW_CCP S.A.’s actions taken to bring about the fulfilment of an obligation resulting from the clearing of a transaction accepted into the clearing system, the amount of KDPW_CCP S.A.’s own funds falls to 110% of the capital requirement, KDPW_CCP S.A. will, before using the remaining own funds, call on the clearing members to make additional contributions to the fund, not exceeding 100% of the maximum amount of the existing contributions resulting from their last update, provided that the obligation arising from the transaction that should be performed is guaranteed by that fund;
  • setting out the obligation of participants to comply with the requirements set out in the relevant anti-money laundering and counter-terrorist financing legislation in relation to the business relationships they undertake. A requirement has been set out for entities seeking the participant status and for participants to provide information necessary to identify money laundering and terrorist financing risks associated with the business relationships they undertake. They will be required to provide KDPW_CCP S.A. with an up-to-date Correspondent Banking Due Diligence Questionnaire (CBDDQ, template published by the Wolfsberg Group). The Correspondent Banking Due Diligence Questionnaire will be updated by participants on an annual basis;
  • clarification of certain specific issues, including:
    • any surplus of assets posted by the clearing member as a margin to the relevant account maintained for KDPW_CCP S.A. in excess of the required margin also constitutes financial collateral posted as such margin;
    • participation in the clearing system may be suspended also in the event that KDPW_CCP S.A. identifies a risk of money laundering and terrorist financing associated with the participant’s business relationships, in particular in connection with information on the application of restrictive measures against the participant in accordance with the relevant legal provisions, information on the initiation of proceedings in connection with the provision of financial services on the basis of which administrative sanctions may be imposed on the participant for breach of the laws applicable to the participant, or information on a decision to impose such administrative sanctions on the participant;
    • a defaulting participant which causes the suspension of the settlement of a transaction remains liable for any losses incurred by KDPW_CCP S.A. in connection with the withdrawal of the settlement order for the affected transaction or withholding of the execution of that settlement order if a fee for such actions has not been set, as referred to in the Table of Fees, up to a maximum amount equivalent to the initial margin required to secure the clearing of such transaction (KDPW_CCP S.A. will inform participants of the costs incurred in connection with the suspension of the settlement of an affected transaction);
• defining the principle that, if any amendments are made to the rules imposing an obligation for clearing members or entities seeking participant status to provide additional documents, participants which hold this status on the effective date of such amendments are obliged to provide such documents to KDPW_CCP S.A.,
• defining the rules applicable to any surplus that may arise after KDPW_CCP S.A. has fulfilled all of its obligations to participants,
• defining the rule in the buy-in process applicable to cases where the price of the buy-in securities is lower than the price resulting from the affected transaction whose settlement has been suspended. In that case, KDPW_CCP S.A. will not be obliged to transfer the price difference to the defaulting participant,
• other editorial, aligning, and transitional amendments.

In connection with the decision of the Polish Financial Supervision Authority (KNF) of 27 October 2023 on the approval of the amendments to the Rules of Transaction Clearing (organised trading) made by Resolution No. 26/605/23 of the Supervisory Board of KDPW_CCP S.A. of 25 September 2023, the amendments came into force on 1 January 2024.

The amendments to the Table of Fees in Appendix 1 to the Rules of Transaction Clearing (organised trading), concern the fee for management and administration of assets paid in by clearing members as margins and contributions to the relevant funds, and are as follows:

1. in the case of the fee for management and administration of cash assets paid to the relevant fund and assets paid as margins – the variable fee has been reduced from 20% to 18% of income generated on behalf of the participant from the management of the collateral;
2. in the case of the fee charged for cash contributions in EUR:

• if the deposit interest rate published by the European Central Bank is positive or nil – the participants will pay fees equal to the EUR equivalent of the product of 1/360, a rate of 0.2%, and the basis used for the calculation of the fee, where the fee amount is no less than the equivalent of EUR 50 for a given calendar month;  
• if the deposit interest rate published by the European Central Bank is negative – the provisions in the Table of Fees are not amended.

In connection with the decision of the Polish Financial Supervision Authority of 3 February 2023 approving the amendments to the Rules of Transaction Clearing (organised trading) adopted in Resolution No. 35/579/22 of the KDPW_CCP S.A. Supervisory Board dated 13 December 2022, the amendments entered into force on 1 March 2023. The amendments to the Rules of Transaction Clearing (organised trading) introduce the following changes to the Table of Fees:
 

1. Reduction of fees under point 2.1. and 2.1.1. of the Table of Fees
   According to the current wording of point 2.1 of the Table of Fees, the fee for the clearing of a transaction (excluding other transactions referred to in point 2.2 and point 2.3 of the Table of Fees) is 0.0035% of the transaction value but not less than PLN 0.2 and not more than PLN 2 for clearing one transaction. Under Resolution No. 35/579/22 of the Supervisory Board KDPW_CCP S.A. dated 13 December 2022, the maximum threshold is reduced from PLN 2 to PLN 1.5. According to the current wording of point 2.1.1. of the Table of Fees, the fee charged to participants who on the basis of an agreement concluded with an entity managing a regulated market, or alternative trading system, sell and purchase specific securities on their own account in order to maintain liquidity or to organise trading in this market, or charged for participants representing an entity which performs these activities in transaction clearing performed by KDPW_CCP, for the clearing of one transaction executed as part of these activities is 0.00053 per cent of the transaction value but not less than PLN 0.03 and not more than PLN 0.38. Under Resolution No. 35/579/22 of the KDPW_CCP S.A. Supervisory Board dated 13 December 2022, the maximum threshold for market makers is reduced from PLN 0.38 to PLN 0.29.


2. Reduction of fees under point 2.3. of the Table of Fees
   According to the current wording, the fee for the clearing of a repo is calculated on the nominal value of the transaction and depends on the duration of the repo transaction, ranging from 0.0005% for 1-2 day transactions to a maximum of 0.008% for transactions from 6 months to 12 months. Under Resolution No. 35/579/22 of the KDPW_CCP S.A. Supervisory Board dated 13 December 2022, the rate of the fee is modified to be expressed in basis points (bps) per year and the fee amount will be based on the product of the fee base, the maturity of the repo/365 transaction, and the fee rate, which will ultimately be 2 bps. However, in view of the current promotion under Resolution No. 34/578/22 of the KDPW_CCP S.A. Supervisory Board dated 13 December 2022, this rate remains reduced at 1 bp (in accordance with the KDPW_CCP S.A. regulations, the promotional reduction of the fee is valid for a fixed period of time, until 30 June 2023).

Reduction of the fee for clearing of repo transactions at KDPW_CCP

(point 2.3 of the Table of Fees)

The reduction of the fees applied from 1 January 2023 to 30 June 2023.

Resolution No. 34/578/22 of the KDPW_CCP Supervisory Board dated 13 December 2022

Waiver of the fee for clearing of repo transactions at KDPW_CCP

(point 2.3 of the Table of Fees)

The reduction of the fees applies from 1 June 2022 to 31 December 2022.

Resolution No. 1/545/22 of the KDPW_CCP Supervisory Board dated 16 March 2022 amended by:

• No. 21/565/22 of the KDPW_CCP Supervisory Board dated 3 June 2022.

In connection with the decision of the Polish Financial Supervision Authority of 3 March 2022 on the extension of the authorisation to provide clearing services as a CCP to the extent of activities connected with the clearing of repo transactions concluded in organised trading and the decision approving amendments to the Rules of Transaction Clearing (organised trading), including Appendix 1 “Table of Fees”, introduced by Resolution No. 14/497/21 of the KDPW_CCP S.A. Supervisory Board dated 11 May 2021 (as amended by Resolution No. 48/531/21 of the KDPW_CCP S.A. Supervisory Board dated 13 September 2021 and Resolution No. 8/552/22 of the KDPW_CCP S.A. Supervisory Board dated 16 March 2022), and the decisions of the Polish Financial Supervision Authority of 3 February and 3 March 2022 on the validation of a significant change to the margining model consisting in the inclusion of additional components of total risk in the calculation of margins, i.e., wrong way risk (WWR), and liquidity and concentration risk (LCR) introduced by Resolution No. 53/461/20 of the KDPW_CCP S.A. Supervisory Board dated 6 August 2020 (as amended by Resolution No. 70/478/20 of the KDPW_CCP S.A. Supervisory Board dated 9 October 2020), the Management Board of KDPW_CCP S.A. announces the amendments entered into force on 25 April 2022.

The amendments to the Rules of Transaction Clearing (organised trading) are designed to support the following:

• start of the clearing of conditional repo transactions which will be concluded in organised trading. KDPW_CCP S.A. will accept for clearing classic repo transactions in Treasury securities registered in KDPW, excluding index-linked bonds. Repo transactions will be covered by the existing transaction clearing liquidity guarantee system organised by KDPW_CCP S.A. from the moment of their acceptance into the KDPW_CCP S.A. clearing system (transactions concluded in organised trading operated by BondSpot S.A. will be covered by the existing GPW BondSpot ATS guarantee fund). According to the amended Table of Fees, fees will be calculated on the nominal value of transactions depending on the duration of the repo transaction, ranging from 0.0005% for 1-2 day transactions to a maximum of 0.008% for transactions between 6 months and one year; however, in order to promote the service, we offer a promotional reduction of the fee for the clearing of repo transactions in KDPW_CCP S.A. to 25% of the amount determined according to this point in the Table of Fees.
• alignment of regulations in connection with the start of the clearing of repos. This implies among others the following:
  • clearing members will be entitled to name KDPW_CCP S.A. as the entity to perform the obligation of reporting repo transactions. Repos will be reported according to Regulation (EU) 2015/2365 of the European Parliament and of the Council of 25 November 2015 on transparency of securities financing transactions and of reuse and amending Regulation (EU) No 648/2012;
  • initial margins will be calculated separately for repo transactions in securities and other transactions;
  • KDPW_CCP S.A. will identify the counterparty to a repo transaction which, on a given day, according to the terms of the transaction, respectively, acquires an interest coupon or is obliged to transfer the interest coupon. KDPW_CCP S.A. will perform actions in respect of interest coupons provided that the coupon record date falls within the period starting on the settlement date of the opening leg of the repo transaction (inclusive) and the coupon payment date is determined no later than the settlement date of the closing leg of the repo transaction determined in accordance with the terms of the transaction (exclusive). Consequently, repo transactions should fulfil those conditions if they are to be cleared in the clearing system operated by KDPW_CCP S.A.;
• start of buy-ins/auctions in the GUI system. KDPW_CCP S.A. will take actions in this process in order to buy securities subject to a transaction affected by a settlement fail by buying such securities. KDPW_CCP S.A. will carry out the process within, respectively, four business days after the expected settlement date of the transaction (where the transaction is in shares) or seven business days after the expected settlement date of the transaction (where the transaction is in securities other than shares). If a buy-in fails or is not possible, the participant affected by default may request KDPW_CCP S.A. to defer the buy-in until an appropriate later date calculated in accordance with Commission Delegated Regulation (EU) 2018/1229 of 25 May 2018 supplementing Regulation (EU) No 909/2014 of the European Parliament and of the Council with regard to regulatory technical standards on settlement discipline (OJ L 230 of 13 September 2018, p. 1). KDPW_CCP S.A. will carry out the buy-in primarily by way of auctions (i.e., by sending a proposal to buy securities to clearing members within the GUI system). The securities will be delivered within, respectively, four business days after the expected settlement date of the transaction (where the transaction is in shares) or seven business days after the expected settlement date of the transaction (where the transaction is in securities other than shares). If a buy-in is not possible or fails, KDPW_CCP S.A. will calculate and collect compensation from the defaulting participant and pay it to the participant affected by default. The compensation will also constitute a substitute benefit paid in accordance with the Act on Trading in Financial Instruments;
• clarification of the provisions of the Rules of Transaction Clearing (Organised Trading) in connection with the calculation of cash penalties referred to in Article 7(2) of Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012 (OJ L 257, 28 August 2014, as amended) as part of the handling of settlement fails;
• introduction of additional buyer protection. Accordingly, a clearing member responsible for a settlement fail will be obliged to pay a cash benefit in the amount and on the terms set out in the Rules of Transaction Clearing (Organised Trading) in respect of the lost benefit of a participant affected by default or its client which it would have obtained as a result of the exercise of the property right attached to the affected securities provided that, among others, the right was exercised in direct connection with an optional corporate action (an event, other than a general meeting, such as a tender offer or an offer to exchange shares or an optional profit distribution). As a condition to use the additional buyer protection, clearing members are required to deliver in due time an appropriate declaration, in accordance with the template defined by KDPW_CCP S.A., of its or its client’s intention to exercise a property right attached to securities in connection with such optional corporate action and to use the additional buyer protection (if the exercise of such right requires that it or its client expresses its intention to exercise such right and it or its client has such intention). If a clearing member does not present the declaration, it or its client will be deemed to have waived the additional buyer protection and KDPW_CCP will not be obliged to provide the benefit in respect of the lost pecuniary benefit in connection with the optional corporate action;
• introduction of the processing of auctions to close the positions of a defaulting participant resulting from transactions concluded in securities trading. The operation will be carried out in the event that KDPW_CCP S.A. terminates the participation agreement with the defaulting participant with immediate effect upon identification of an event of participant default. KDPW_CCP S.A. will, upon termination of the participation agreement with a clearing member with immediate effect, send to the other clearing members a proposal to open positions in order to close the position of the defaulting participant (KDPW_CCP S.A. may limit the number of clearing members to which it sends a proposal to open positions). A clearing member which has received a proposal to open positions will be entitled (but not obliged) to submit to KDPW_CCP S.A. an offer to conclude a transaction and will be bound by the offer until the end of the auction. Upon receipt of an offer, KDPW_CCP S.A. will either accept the terms of the received offer to conclude the transaction, and subsequently send a settlement order to the settlement institution to settle the transaction, or reject the offer;
• adjusting the scope of actions taken by KDPW_CCP S.A. in case of clearing member default. In particular, the regulations have been amended with a view to the planned start of the clearing of repo transactions, the introduction of buy-ins and auctions, as well as the obligation to pay compensation, refund the difference in the price of securities or pay a cash benefit under the additional buyer protection;
• the introduction of mandatory communications with clearing members via the GUI system in cases specified in the Rules of Transaction Clearing (Organised Trading) and the Detailed Rules of Transaction Clearing (Organised Trading). This will be additional communication, which is ultimately to be used by participants for certain activities in clearing systems. Therefore, the amendments introduce an obligation to handle additional communication in the process of auctions and buy-ins (submission of a declaration (access request) is required). Details were presented in a dedicated letter together with a access request template;
• payment agents’ obligation to ensure the execution of payments to clearing members during the availability of the systems within which such function is performed.
• changes of fees set out in the Table of Fees. Apart from the fee for the clearing of conditional repo transactions and its promotional reduction as described above, the changes in the fees are introduced, among others, in connection with the processing of settlement fails due to the lack of securities as well as the additional buyer protection. The fee related to the processing of settlement fails due to the lack of securities will be PLN 1,000 (if the failed settlement amount is no more than PLN 5,000,000) and PLN 2,500 (if the failed settlement amount is more than PLN 5,000,000). The fee for the use of the additional buyer protection will be PLN 1,000. In addition, other fees are introduced, such as a fee for actions taken at the request of a participant affected by default to shorten the settlement date of the closing leg of a repo transaction (a fee of PLN 2,500 charged to the clearing member who does not repair a settlement fail due to the lack of securities);
• changes to the margining model. As part of initial margins, add-ons will be determined for wrong way risk (WWR) and liquidity and concentration risk (LCR). The concentration of positions and concentration limits will no longer be determined. The add-ons will be calculated on an ongoing basis, at clearing account level, separately for cash and derivatives positions. Accordingly, the initial margins required from clearing members will be determined using the risk parameters determined in accordance with the Detailed Rules of Transaction Clearing (Organised Trading) in respect of the members’ exposures including the following components:
  • a requirement covering the member’s potential future exposure following the identification of an event of member default (SPAN® margin),
  • a requirement reflecting the member’s current exposure as a result of actual market price movements (marking-to-market),
  • a requirement covering risks arising from the liquidity of financial instruments and the concentration of positions to the extent of the member’s exposure (Liquidity and Concentration), and
  • a requirement covering the risk arising from the correlation between a member’s exposure and its credit risk (Wrong Way Risk).

Further to the decision of the Polish Financial Supervision Authority of 14 October 2021 approving amendments to the Rules of Transaction Clearing (organised trading) adopted in Resolution No. 49/532/21 of the Supervisory Board of KDPW_CCP S.A. dated 13 September 2021 the amendments entered into force on 1 January 2022.

The amendments in the Table of Fees defined in Appendix No. 1 to the Rules of Transaction Clearing (Organised Trading) concerned fees for the management and administration of assets posted by clearing members as margins and contributions to relevant funds. The amendment is designed to introduce a fee structure which is universal regardless of the macroeconomic situation and interest rates. As a result, the structure and amount of the fee for the management and administration of assets contributed to the relevant fund and assets posted as margins has been modified and will consist of a fixed part calculated on the value of collateral deposited in cash, equal to 0.07% (a reduction from the current level of 0.1% per quarter) multiplied by the basis for calculating the fee in a given quarter, as well as a variable part in the amount of 20% of profits generated for the participants from the management of the collateral. The fee charged on posted securities will be reduced from 0.1% to 0.07% per quarter.

Temporary reduction of the fee for management and administration of securities posted as contributions to the clearing fund and the relevant guarantee fund and posted as margins in the transaction clearing liquidity guarantee system or in the negotiated loan clearing liquidity guarantee system
(point 4.1 of the Table of Fees)
The reduction of the fees applied from 1 January 2021 to 31 December 2021 Resolution No. 10/493/21 of the KDPW_CCP Supervisory Board dated 29 March 2021 amended by Resolution No. 30/513/21 of the KDPW_CCP Supervisory Board dated 29 June 2021

Reduction of the fee for the participation type of “non-clearing member”. The fee for the year 2021 shall be PLN 5,000, If a participation agreement for the participation type of “non-clearing member” is concluded in the first half of 2021, the fee for the year shall be equal to the full amount of the reduced fee (PLN 5,000), and if in the second half of 2021, the fee shall be equal to ½ of the reduced fee (PLN 2,500).
(point 1.1 of the Table of Fees)
Resolution No. 12/495/21 of the KDPW_CCP Supervisory Board dated 29 March 2021.

Temporary reduction of the fee for management and administration of cash assets (other than cash assets in EUR) paid in as contributions to the clearing fund and the relevant guarantee fund and posted as margins in the transaction clearing liquidity guarantee system or in the negotiated loans clearing liquidity guarantee system.
(point 4.3 of the Table of Fees)
The reduction of the fees applied from 1 July 2021 to 31 December 2021.
Resolution No. 32/515/21 of the KDPW_CCP Supervisory Board dated 29 June 2021.

Temporary reduction of the fee for the management and administration of cash posted as contributions to the clearing fund and the relevant guarantee fund and cash posted as margins in the transaction clearing liquidity guarantee system or in the negotiating lending clearing liquidity guarantee system
(point 4.3 of the Table of Fees)
The reduction of the fees applied from 1 July 2020 to 31 December 2020.
Resolution No. 27/435/20 of the KDPW_CCP Supervisory Board dated 15 May 2020

Temporary reduction of the fee for management and administration of securities posted as contributions to the clearing fund and the relevant guarantee fund and posted as margins in the transaction clearing liquidity guarantee system or in the negotiated loan clearing liquidity guarantee system
(point 4.1 of the Table of Fees)
The reduction of the fees applied from 1 October 2020 to 31 December 2020.
Resolution No. 63/471/20 of the KDPW_CCP Supervisory Board dated 17 September 2020.

Further to the decision of the Polish Financial Supervision Authority of 3 November 2020 approving amendments to the Rules of Transaction Clearing (organised trading) adopted in Resolution No. 7/415/20 of the Supervisory Board of KDPW_CCP S.A. dated 4 March 2020 (as amended by Resolution No. 52/460/20 of the Supervisory Board of KDPW_CCP S.A. dated 6 August 2020 and Resolution No. 71/479/20 of the Supervisory Board of KDPW_CCP S.A. dated 9 October 2020) the Management Board of KDPW_CCP S.A. announces that the amendments entered into force on 1 December 2020. The amendments of the Rules of Transaction Clearing (organised trading) under those Resolutions aim to:

• introduce an additional channel of electronic communications (GUI system) to the regulations, which not only gives users access to the clearing system but also supports the submission of information and declarations in electronic format in the system as referred to in the Rules of Transaction Clearing (organised trading) or regulations issued thereunder, including in particular orders to open or close clearing accounts, orders concerning collateral, and (at a later date) orders concerning position transfers. The GUI system in its proposed form (i.e., including the aforementioned functionalities) will be available on the KDPW_CCP S.A. website under a dedicated agreement to be proposed by KDPW_CCP (the content of the new agreement and the new access request applications required to join the GUI system in its proposed form will be communicated at a later date). It should be noted that the SWI system will continue to operate as the mandatory communication system for participants while the GUI system, including the functionalities defined in the KDPW_CCP regulations and operated via the KDPW S.A. system, will be optional;
• introduce provisions governing the terms and conditions of communications in special circumstances, including in the event of a contingency or other significant threats, such as the current epidemic threat. Consequently, in such circumstances, derogations will be allowed from the requirements of the Rules of Transaction Clearing (organised trading) or regulations issued thereunder regarding the format of documents containing declarations or information, subject to mutual consent of KDPW_CCP and the participant. The Management Board of KDPW_CCP S.A. may, in its Resolution, define circumstances where declarations or information should be submitted in electronic format via the SWI system or the GUI system or in writing;
• introduce provisions authorising the use, in the event of default of a clearing member participating in more than one clearing system organised by KDPW_CCP, of any surplus which:
  • remains after the payment of the member’s debits due by virtue of its participation in another system organised by KDPW_CCP;
  • represents such member’s own funds; or
  • has been contributed by that member as collateral securing all transactions cleared by such member or transactions concluded and cleared on the member’s account.

  In that case, in accordance with ESMA guidance, KDPW_CCP should freely pay any debits arising from the clearing of transactions by using also such own funds of the member rather than returning such funds and using contributions of other members posted in the fund. Consequently, such funds should constitute part of the of each transaction clearing liquidity guarantee system. Therefore, such surplus will, once posted in the relevant account managed for KDPW_CCP, constitute financial collateral contributed as initial deposit to each of the systems;

• introduce other amendments of editorial nature.

In connection with the decision of the Polish Financial Supervision Authority of 11 May 2020 approving amendments to the Rules of Transaction Clearing (organised trading) adopted in Resolution No. 6/414/20 of the Supervisory Board of KDPW_CCP S.A. dated 4 March 2020, the Management Board of KDPW_CCP S.A. announces that the amendments entered into force on 1 August 2020.

The amendment to the Table of Fees attached in Appendix 1 to the Rules of Transaction Clearing (organised trading) is connected with the expected launch by KDPW_CCP S.A. of the clearing of transactions in Treasury bonds to be organised by BondSpot S.A. as an alternative trading system.

In connection with the decision of the Polish Financial Supervision Authority of 15 June 2020 approving amendments to the Rules of Transaction Clearing (organised trading) adopted in Resolution No. 25/433/20 of the Supervisory Board of KDPW_CCP S.A. dated 15 May 2020, entered into force on 1 July 2020.

The amendments concern the Table of Fees laid out in Appendix 1 to the Rules of Transaction Clearing (organised trading), including:

• fees for the management and administration of cash posted as contributions to the relevant fund and cash posted as margins (excluding cash in EUR) – change of the minimum fee threshold;
• fees charged on posted securities – reduction of the fee from 0.2% to 0.1% per quarter and removal of maximum and minimum fee amounts.

In connection with Resolution No. 27/435/20 of the Supervisory Board of KDPW_CCP S.A. dated 15 May 2020, the fee for the management and administration of cash posted as contributions to the clearing fund and the relevant guarantee fund and cash posted as margins in the transaction clearing liquidity guarantee system or in the negotiating lending clearing liquidity guarantee system, referred to in point 4.3 of the Table of Fees, will be reduced from the effective date of the amendments of the Table of Fees under Resolution No. 25/433/20 of the Supervisory Board of KDPW_CCP S.A. to 31 December 2020 as follows: if the amount of the fee equal to 0.1% times the basis for the calculation of the fee in a quarter is more than 100% of the income earned for the participant in the quarter, the fee charged to the participant for the quarter will be equal to 100% of such income.

Temporary waiver of the fees for registration of transactions in short-term, mid-term and long-term Treasury bonds futures contracts and in WIBOR reference rates futures contracts and for transferring positions in such contracts (points 3.1.1.3. and 3.1.1.3.1. of the Tabel of Fees)

The waiver of the fees applied from 1 January 2019 to 29 February 2020.

Resolution No. 7/354/19 of the KDPW_CCP Supervisory Board dated 31 January 2019 amended by Resolution No. 51/398/19 of the KDPW_CCP Supervisory Board dated 23 September 2019.

On 1 October 2019 the amendements to the following rules entered into force:

1. Rules of Transaction Clearing (organised trading) - in connection with the decision of the Polish Financial Supervision Authority of 5 September 2019 approving amendments to the Rules of Transaction Clearing (organised trading) under Resolution No. 44/346/18 of the KDPW_CCP S.A. Supervisory Board dated 21 December 2018 as amended by Resolution No. 39/386/19 of the KDPW_CCP S.A. Supervisory Board dated 17 June 2019 and Resolution No. 46/393/19 of the KDPW_CCP S.A. Supervisory Board dated 12 August 2019,
2. Rules of the Clearing Guarantee Fund - in connection with the decision of the Polish Financial Supervision Authority of 5 September 2019 approving amendments to the Rules of the Clearing Guarantee Fund under Resolution No. 45/347/18 of the KDPW_CCP S.A. Supervisory Board dated 21 December 2018 as amended by Resolution No. 40/387/19 of the KDPW_CCP S.A. Supervisory Board dated 17 June 2019,
3. Rules of the WSE BondSpot ATS Guarantee Fund,the amendments are aimed at adjusting the provisions of the Rules of the WSE BondSpot ATS Guarantee Fund to the amendments to the Rules of the clearing fund and include, i.e. the introduction of a process of daily updating of clearing members' required contributions.

Draft Rules of the WSE BondSpot ATS Guarantee Fund The following modifications are to be expected as a result of the entry into force of the aforementioned amendments to the Rules of Transaction Clearing (organised trading), the Rules of the Clearing Guarantee Fund and the Rules of the WSE BondSpot ATS Guarantee Fund:

• clearing members’ required contributions to the clearing fund and the relevant guarantee funds managed by KDPW_CCP will be updated on a daily basis,
• the methodology of calculating the fund value and the participants’ contributions will be modified as follows,
• additional margins will no longer be required,
• the maximum value of the funds will no longer be determined,
• the minimum contribution to each fund will be adjusted,
• a single institution code will be used for the purposes of participation in the funds,
• certain matters concerning clearing member default will be clarified in the regulations,
• the amount of the flat-rate withholding tax charged to non-resident clearing members will be defined,
• clause will be added authorising clearing members to terminate the participation agreement unilaterally, together with all transactions, in the event of KDPW_CCP default.