Strict and continously evolving standards set by regulator ESMA make up one of many challenges that today’s European trade repositories under SFTR and EMIR face. Notably, one provider – UnaVista – recently announced that it is closing its SFTR trade repository in EU27. Slawomir Zajac, Director of KDPW Trade Repository and Board Member of ANNA, shares his current view.


UnaVista decided to close its SFTR TR in EU27. Maybe there’s a time for one global TR in EU?


A setup with multiple service providers (TRs) is better for the trade reporting service from the perspective both of reporting entities and supervisory authorities. To concentrate a service within a single global provider would hinder supervision by the supervisory authority which will be forced to negotiate and align solutions depending on the requirements of such a single global player. A monopoly provider could charge high fees to all reporting entities, which would hurt smaller firms or entities outside the TR’s country of origin. Moreover, a global TR would not feel the need to invest in improved service quality, limiting itself to the bare minimum required by regulations and licence. Local trade repositories, in turn, are more familiar with their local markets and specific conditions. As long as there are several TRs in operation, clients have a choice between a basic service, which is inexpensive but covers all required functionalities, and a premium service, which is more expensive but includes additional functionalities.

What is KDPW’s outlook of continued service provision in the difficult business environment of regulatory reporting?

It is very challenging to run a business as a licensed TR operator. On the one hand, ESMA imposes strict and continuously evolving standards (note that UV decided to stop their SFTR service six months before ESMA’s new validations come into force); on the other hand, non-licensed large aggregators compete with TRs and have more commercial leeway to provide their services. Supervisors need to lower their requirements for TRs (for instance by allowing the pooling of resources and technology under SFTR and EMIR and by ensuring a more stable regulatory environment) and tighten supervision over providers of reporting services (more supervision of RSEs, not just RCs), in particular by implementing better transparency of delegated reporting. Furthermore, TRs are required to publish their price lists (providers are exempt from this requirement) and partly to disclose their client lists by notifying transfers between TRs.

The aim of KDPW’s service is to provide a full range of post-trade services within the KDPW Group, from clearing operated by KDPW_CCP, securities settlement, custody and safekeeping offered by KDPW to regulatory reporting services under MiFID (ARM), EMIR and SFTR (Trade Repository). The Trade Repository enables KDPW_CCP and other entities established in Poland and across the EU to meet their reporting obligations, and is a key part of the market infrastructure. Revenue volumes are important but they are not our top priority. We are a stable, public trust organisation with 27 years of experience and a focus on the entire capital market. We know that many entities choose KDPW TR thanks to the quality of our service, the trust we enjoy, and our advanced technology. We are committed to continuous development.

What is your opinion on competition in SFTR reporting?

Competition in SFTR reporting is now very much like competition in EMIR reporting. There are currently four SFTR trade repositories in the EU managed by EMIR TR operators, soon to be three. The SFTR reporting market is divided along the same lines as the EMIR reporting market and it’s not a coincidence that the SFTR trade repositories are operated by the same entities. It has become a market standard to offer both services under one roof. Existing business relations have been critical as all trade repositories initially offered their SFTR service to EMIR TR clients. The EU trade repositories now compete in both service segments. Every TR strives to take the best advantage of its strengths. Some TRs are expanding their service range (including UV TR) while others develop inexpensive, simple, easily accessible solutions (like KDPW TR). Other key factors include TR ownership structures. Additionally, we have also observed geopolitical factors that play a role in the selection of a TR. It is worth underlining that KDPW TR holds a licence to provide regulatory services throughout the whole EU, so questions of territoriality should not play any role here: it should be a substantive choice uniquely based on service scope.

And you are ready for competition. What are your competitive advantages?

Our key strengths include our staff. As the trade repository service is highly specialised, no experienced professionals were available for hire when the EMIR TR launched. We made great efforts to recruit and train experts in-house. Their experience and expertise was instrumental to the launch of the SFTR service based on our established models. As such, we are well positioned when it comes to staff rotation.

We are also self-sufficient and develop all KDPW TR services (EMIR, SFTR) in-house without the need for outsourcing. This gives us great comfort as we can easily react to developments in the regulatory reporting environment.

We also offer free-of-charge test environment and continuous expert support of account managers. Their support continues throughout the duration of live reporting subject to time priorities which are even more stringent than in the educational environment. Customer relationship managers present and clarify business terms of the service and maintain long-term customer relations, including notifications of upcoming regulatory modifications.

And what about the pricing?

As we do not provide a global service geared solely towards profit, we can offer attractive prices compared to other TRs by maintaining a low cost base compared while ensuring top-quality service of professional experts combined with advanced technology based on the long-term experience of the KDPW Group. While we have attracted many large clients established outside Poland and increased our market share in the last year, we remain the EU’s smallest TR, which also has its upsides (or, in fact, nothing but upsides), especially for our clients. We are available and responsive as necessary to assist reporting entities whom we support in reporting, alignment with the requirements, and relations with local supervisors, if necessary. We help clients to identify new technology solutions which facilitate and support communication with the TR and improve the quality of our service.

Do you have any experience in porting? 

As the operator of an EMIR Trade Repository, we have the necessary experience in porting across different TRs, including KDPW and UV. As SFTR porting follows the same guidelines, we have established the necessary procedures and systemic solutions. Given our solid operational relations with the UV Trade Repository, we can jointly complete the migration of prospective clients and provide all necessary support and co-ordination to existing UV clients. Importantly, porting is offered free of charge, which means that transfers of reporting entities to KDPW encounter no financial barriers. We have taken over some of CME’s large clients whom we ported smoothly over a single weekend. This shows that a small TR can be attractive to large reporting entities. By comparison, other providers were porting to new TRs over many weekends. 

We offer A2A data exchange to larger clients and provide a simple GUI to all clients, featuring access to the report database and message history. Our applications and solutions are complemented by a professional customer service. We design our solutions with a focus on rapid and easy communication. Our solutions are simple and free from any risk of modification of the contents of reports. We focus on the top priorities of a fast and reliable service. We validate all reports in real time. We respond within seconds with potential error codes and descriptions, if required. We are positive that our offer is attractive to prospective clients. We know for certain that our existing clients are satisfied with our solutions, as demonstrated by long-term customer relations.