KDD QuickClear Information System for CSD
- General Presentation
2nd AECSD Conference, Moscow, October 2005
Deputy President & COO
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,
• Asynchronous system messaging is being used
• XML data messaging system implemented
• Transactional and data STP supported
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
• Implemented standards (HTTP, SSL PKI, XML, WebServices, Digital
• High degree of standardisation= lower costs for all the participants in
the pre and post-trade processing chain!!!
IS and the Business Environment
Brokers Stock Exchange
Investment Central Bank
• 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.
CSD Client structure
• CSD Functionality Navigator
• Functionality window
• Messaging window
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.
• 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 IS supports 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.
Services related to the non-organized market
1. Securities Transactions supports transfer • Disposal limitations:
Intra Account Movements (between the accounts - Interim Order,
of same securities holder), - Supervisory Order,
Inter Account Movements (to the account of the - Handover Decree,
new securities holder),
Third-party rights, - Claim Enforcement,
Disposal limitations. - Tax Execution,
All the transfers are processed in real time. - Pledge Realization Interim Order.
2. Third-Party Rights and Disposal limitations
3. Certificated Securities
• Third Party Rights:
- Usus Fructus,
- Redemption Right,
- Preemptive Right,
- Dispose Denial Right,
- Block Inventory.
Functions/Services Related to the Organized Market
• IS supports two basic functionalities related to the “organized
- 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
• IS provides RTGS OTC-DVP settlement mechanism to settle large value
transactions 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
• 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.
• IS System provides complete functionality on the basis of the risk
minimization by adopting DVP mechanism in the takeover acceptance and
securities transfers process.
Corporate Action Processing Functions
• Basic functionality related to any corporate action in the CSD System is
- 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 new
• Fees calculation means functions for automatic and dynamic real-time
calculation according to the pre-set formulas, service tariff and quantity of
• Real-time calculations are provided for market, off-market and OTC-DVP
transactions with online inquiries for the CSD operator and CSD members.
Inquiries and Data transfers
• The IS System includes standard list of inquiries.
• In addition the IS System includes data transfers through Web services.
• 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).
Thank you for your kind attention.
KDD- Central Securities Clearing Corporation,