Nasdaq CSD operates four securities settlement systems (the Estonian SSS, the Icelandic SSS, the Latvian SSS and the Lithuanian SSS), each with a national jurisdiction in Estonia, Iceland, Latvia and Lithuania, respectively.
The outsourcing of matching and settlement services to T2S via the Estonian, the Latvian and the Lithuanian securities settlement systems is serviced by a single IT platform which offers the same procedures for all the systems. The Icelandic securities settlement system is consolidated into the same single IT platform and provides securities settlement where the cash leg is settled in the Central Bank of Iceland.
A participant’s operational account in the CSD system displays, in consolidated form, the balance of all legal accounts associated with the participant within one or more SSSs. Nasdaq CSD accommodates a variety of combinations of legal accounts to enable the SSSs to form a single operational account, but operational account may only contain an aggregation of legal accounts of a single type – either segregated nominee accounts, nominee accounts, or owner accounts. It is only a participant’s legal account within a specific SSS that establishes the participant’s legal entitlement to a security (whether an ownership entitlement or a custody holding entitlement for the benefit of a client).
One legal account is associated with only one operational account in the same category as the legal account. A legal account is identified by means of:
- the account number of the relevant operational account; and
- the ISIN of the relevant security held in that legal account (used to attribute the securities to the legal account in the Estonian, Icelandic, Latvian or Lithuanian SSS). Settlements of securities transfers in an SSS take place according to the law applicable to the SSS to which the legal account belongs.
A Nasdaq CSD participant may have Estonian, Icelandic, Latvian and Lithuanian instruments in its operational account, which means that there would be four legal accounts – one in each respective SSS.
From an operational perspective, each operational account in the Estonian, Latvian and Lithuanian SSS constitutes a single account in T2S. Any T2S-eligible securities settlement transaction performed in an SSS via a operational account is settled in T2S. For legal and settlement finality purposes, all positions of securities in operational accounts (Estonian, Icelandic, Latvian and Lithuanian ISINs) are attributed to the legal accounts held in the respective SSS.