Settlement process - Poland
Settlement cycles
Equities on WSE: | T+2 mandatory |
Bonds on WSE: | T+2 (T+1 if off-session) |
OTC: | Any cycle agreed between counterparties, usually market practice is T+1 or T+2 |
Settlement flow
Settlement for Stock Exchange (SE) trading as per Art121 of the Securities Law
Transactions concluded on the WSE are settled based on successfully pre-matched client and international broker settlement instructions.
| SD-1: | The custodian bank receives settlement instructions and starts pre-matching instructions with the counterparty. |
| SD: | The custodian bank pre-matches instructions with the counterparty. After successful pre-matching, an appropriate instruction is sent to the KDPW up until 15:30 SD. |
by 15:30 | Before each against payment session, the KDPW matches all received instructions (for this as well as for the following days). Sessions are at 10:30, 13:00 and 15:30. During each session, KDPW checks the correctness of the instructions as well as the availability of cash and securities. After each session, KDPW participants receive a report with information about all transactions settled during this session. |
by 17:00 | Based on the report received from the KDPW, the custodian bank settles transactions in its system (in three batches, around 13:00, 15:30 and 17:00) and sends settlement confirmations to clients. |
Settlement for OTC transactions
OTC transactions are settled based on successfully pre-matched customer instructions.
Registration
There is no registration at KDPW level.
There are two different account structures possible at the level of the Polish custodian: omnibus accounts and segregated accounts.
Omnibus accounts became possible on 16 April 2012, previously the only possible account structure was segregated accounts in the name of the Beneficial Owner.
Under the segregated account structure, those who manage the assets of third parties are required to disclose the beneficial ownership by opening the securities account in the name of the final beneficial owner.
Please refer to the Disclosure Requirements - Poland for details of disclosure requirements for the omnibus account structure.
Note: All domestic Polish securities held by Clearstream Banking with Bank Handlowy are held under the omnibus account structure.
Stamp duty
Stamp duty is not applicable in the Polish market for the regulated market, nor for any T-bond or T-bill transactions.
OTC transactions in instruments other than T-bonds and T-bills and not concluded with a local brokerage house or a local bank running brokerage activities as counterparty (or with the intermediation of such local brokerage house or local bank) are subject to 1% stamp duty tax.
Additionally the following transaction are exempt from stamp duty:
- a foreign investment firm’s OTC sale of securities which were acquired (as proprietary trading) in an organized market trading, for example on the WSE (i.e. as part of its remote membership business)
- sale of securities to a foreign investment firm
- sale of securities with the intermediation of a foreign investment firm (the term “intermediation” is not clear although it may be expected that this shall cover the sales transaction between two clients of a foreign investment firm, where such foreign investment firm intermediates and arranges such a transaction, but is not counterparty to such transaction).
Securities lending transactions are also exempt from stamp duty.
The 1% stamp duty will be calculated on transactional value. If the trade is settled "free of payment", the market value is applied.
The buyer is responsible for the calculation and payment of stamp duty as well as the completion of the relevant tax forms and submission to the appropriate tax office. The official form is available only in Polish language.
The tax form should be submitted and all stamp duty payment obligations exercised within 14 calendar days from the settlement date of the OTC transaction. As per market practice, tax forms in Poland are sent via registered mail.
Customers are required to check with their tax advisor applicability of stamp duty related to their trades.
Cash penalties
Penalties will be calculated and applied on matched settlement instructions that fail to settle, in full or in part, on and after their intended settlement date (ISD), if both the settlement instruction and the relevant financial instrument are subject to cash penalties.
Instruments subject to cash penalties
Any financial instrument listed in the Financial Instruments Reference Data System (FIRDS) database maintained by ESMA will be subject to cash penalties. However, cash penalties will not apply to shares listed in the Short Selling Regulation (SSR) exemption listed in the Short Selling Regulation (SSR) exemption list.
Buy-ins
Buy-ins apply in the market for WSE transactions. The KDPW may arrange a buy-in transaction for a WSE broker or remote member on the third day after the expected settlement date.
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