The main features of settlement of securities transactions carried out in the Norwegian securities market are as follows:
- Dematerialised securities (no physical securities).
- A single central securities depository – VPS (the Norwegian Central Securities Depository).
- Investors are permitted to operate their own accounts with VPS.
- Domestic holders – must hold securities on their own VPS account.
- Foreign holders – may hold securities either on their own VPS account or through a nominee.
- Investors can manage their VPS accounts either through an account operator or directly over the internet.
- Settlement is carried out through an investment firm or a settlement agent.
- The parties that participate in the central securities system for settlement in Norwegian kroner are investment firms, settlement agents and CCPs.
- In order to participate in the central securities system, settlement participants must provide a liquidity guarantee either by holding an account with the Norwegian central bank (Norges Bank) or by having access to an account with Norges Bank through an arrangement with a bank that operates such an account, known as a liquidity bank.
- Delivery versus payment (DvP) – NOK payment in central bank money.
- Multilateral netting.
- Automatic pool-based arrangement for securities borrowing and lending.
- Extended balance checking for availability of cover across multiple accounts.
VPS uses international standards
- Settlement instructions can be given using ISO 15022.
- ISO 6166 is used for Norwegian financial instruments.
- VPS is responsible for allocating international securities numbers (ISIN) in Norway.
- BIC codes are used to identify settlement participants when matching transactions.