CSDR – Status per March

The Norwegian parliament is in the process of adopting a new law on Central securities depositories (CSDs) and on Securities settlement. The Standing Committee on Finance and Economic Affairs has presented its proposal in Innst. 166 L (2018-2019) (https://www.stortinget.no/no/Saker-og-publikasjoner/Publikasjoner/Innstillinger/Stortinget/2018-2019/inns-201819-166l/). The new law implements CSDR (the European Regulation on improving securities settlement in the European Union and on central securities depositories) into Norwegian law. The new law will replace the current Securities register act of 5. July 2002 nr. 64.

The Parliaments adoption of the new law facilitates that VPS is authorized as a CSD under CSDR.

It is still not clear when the new law will enter into force and VPS will be able to apply for an authorization. The EEA Joint Committee decided to include CSDR and technical standards to CSDR in the EEA-Agreement on 8 February 2019. It does however follow from the decision that the entry into force of the decision is dependent on the three EFTA-countries lifting their article 103 reservations. The timing for when this will be completed is not clear, but it is expected that the Norwegian parliament will lift its reservation in Q2 2019.

VPS has been working to prepare for CSDR for a long time and have already implemented many of the new requirements. We refer to the VPS’ Road Map and the revision of the VPO NOK rules that has been out for consultation. A consultation document on VPS Rules for registration of financial instruments, implementing CSDR and the recently adopted Norwegian law, will be published shortly. VPS’ process to implement CSDR into our solutions and operation will continue in parallel with VPS’ preparation of the application for a new authorisation.

In addition to implementing CSDR into Norwegian law, the law regulates certain issues that CSDR does not regulate, i.e.:
– the use of account operators,
– legal rights to securities registered in a central securities depository and to securities registered in the register of a nominee that holds securities on behalf of customers in a Norwegian CSD
– rules on confidentiality and exemptions from this
– liability of a CSD and account operators
– CSDR sets up a right for certain issuers to arrange for its securities to be recorded in a CSD, in the Norwegian law this right is extended to issuers not covered by the rule in CSDR.
– the Norwegian law extend the right to open an account with the CSD compared to the regulation in CSDR.

These additional Norwegian rules are largely a continuation of current Norwegian law. It is however important to notice that the role of account operators are clarified in the Norwegian law. According to section 6-1 a Norwegian CSD decides whether to use account operators or not and to what extent. The role and responsibility of account operators, if used, is however clarified in the law. Certain duties of account operators will follow directly from the law, other duties shall according to section 2-2 of the law, be decided in the rules of the CSD. Account operators should also be aware of the regulation in section 9-2 on account operator’s liability, and the regulation in Section 11-9 and 11-10 on sanctions for infringements.