A system participant or investor acting through a system participant may open in its name various types of operational accounts used only for the aggregate accounting of securities in those settlement systems where the participant has acquired the status of a system participant. A securities account for securities of the same ISIN is created upon the first credit of the respective securities for the benefit of the holder of the operational account.
The Nasdaq CSD offers account types which can be held with any settlement system nominee accounts in the name of the system participant or the client of the system participant and with owner accounts in the name of the end investor.
Each securities account has a unique account number composed of:
- the number of the operational account, which allows the account type and the legal implications of holding securities in the account to be determined (such as the level of asset segregation and entitlement to securities, where applicable); and
- the ISIN of the securities credited for the benefit of the holder of the operational account, which allows determination of the settlement system in which the securities are initially recorded and, hence, the law applicable to the securities holding.
Securities registered at the Nasdaq CSD as an issuer CSD are held within the settlement system in which the securities are registered. Securities held at the depository as an investor CSD, through a CSD link arrangement with a foreign CSD, are deemed to be held in the default settlement system of the account operator, unless the account operator has selected a different default settlement system for that specific operational account. Thus, the proprietary aspects (entitlement to securities, pledge rights and other rights in rem) of securities held by the account holder with:
- Estonian Settlement System are governed by Estonian law;
- Latvian Settlement System are governed by Latvian law; and
- Lithuanian Settlement System are governed by Lithuanian law.