Clearing and Settlement

The central securities settlement system (VPO), is based on a multilateral netting and clearing model of all trades that are entered to be settled on a certain settlement date. Based on the net transfer per seller and buyer, the Central Bank of Norway carries out the cash settlement and VPS the securities settlement between the participants.

Payment between brokers or settlement agents and their investors, takes place outside of VPO.

The main characteristics of the Norwegian securities settlement system are as follows:

• Dematerialised securities with book entry transfer
• Central book-keeping in the CSD
• Investors are able to keep accounts directly in the CSD
  • Domestic investors; compulsory related to holdings in equities
  • Foreign investors; voluntarily between individual accounts or on nominee-accounts
  • Access to the accounts via account operator(s), or directly via the Web
• Settlement via brokers or settlement agents
• Settlement participants are obliged to guarantee funds to cover settlement through:
  • Keeping a deposit at the Central Bank of Norway, or
  • Drawing rights for cash from a guarantee bank keeping a deposit at the Central Bank of Norway
• Delivery versus Payment (DvP)
  • NOK (central bank money)
  • EURO
  • USD
• Multilateral netting
• An automated pool based borrowing and lending program of securities
• International standards