Debt securities eligible in the Icelandic Securities Depository (ISD): - Government bonds - Treasury bills - Corporate debt securities

Transcription

1 Iceland Types of securities Debt securities eligible in the Icelandic Securities Depository (ISD): - Government bonds - Treasury bills - Corporate debt securities Depository DANSKE BANK, COPENHAGEN Depository Code: 85 Custody Operations - Custodian Services 2-12, Holmens Kanal DK-1092 Copenhagen Denmark Cash correspondent details GLITNIR BANKI HF., REYKJAVIK SWIFT Address: ISBAISRE Cash Account Number of 1 : IS ISO Currency Code for the Icelandic Krona: is a Group D currency. Type of link Permits delivery and receipt of securities free of payment to and from counterparties in the Icelandic domestic market. Indirect link via DANSKE BANK, COPENHAGEN to the Icelandic Securities Depository (ISD) for dematerialised securities. 1. is hereinafter referred to as CBL. 26 April 2006 Iceland - 1

2 General information The Iceland Stock Exchange (ICEX) was established in 1985 as a joint venture of several banks and brokerage firms at the initiative of the central bank. Trading began in 1986, initially only in T-bonds. In 1989, ICEX launched its first trading system, which allowed continuous trading. The trading has always been electronic by remote access; the exchange has never had a trading floor. In 1990, housing bonds (mortgage-backed securities with a state guarantee) were listed and they quickly became the benchmark bonds for long-term interest rates. On 1 January 1999, the exchange became a limited company with shares held by listed companies (29%), member firms (29%), the central bank (16%), pension funds (13%) and the Investor Association (13%). ICEX also has a licence to operate a regulated OTC market, that is, a regulated market for securities that are not officially listed on the stock exchange. In 2000, ICEX became a member of the Nordic Stock Exchange Market, NOREX. The Icelandic Securities Depository (ISD) is a registry, a depository and a clearing house for the settlement of securities in dematerialised form. The ISD system holds equities and bonds in book-entry form. The ISD employs a book-entry only system and runs a central registry and depository for securities. All trades on the ICEX in dematerialised securities are transferred automatically to the ISD system as matched trades. The ISD sends payment instructions to the Central Bank of Iceland, which acts as intermediary for netting in the payment system. Only settlement banks can be a part of the netting process. The settlement cycle is T+1, that is, all trades are settled before opening on the following trading day. Dematerialised securities traded on-exchange are settled on an against payment basis on T+1. It is customary to agree settlement on a T+3 basis for off-exchange trades. Foreign exchange transactions are settled on a T+2 basis. The financial market in Iceland is regulated by The Financial Services Authority, Iceland. Further information is available on Pre-matching and settlement services The table below summarises CBL s pre-matching service for external settlement instructions, as well as the pre-matching method and start time in the market. Information available from Iceland is limited to problems identified during the pre-matching attempt; no positive matching confirmation is provided. For further details of CBL s pre-matching services, see Pre-matching services for external settlement instructions in the Introduction. Scope Service offered Method employed Start (local time) All securities Immediate release flag available Manual via telephone 10:00, SD-1 Specific settlement rules / settlement restrictions Settlement with Bridge counterparties is not possible; only internal and external instructions are allowed. 30 January 2006 Iceland - 2

3 Iceland Settlement times Clearstream Banking domestic instructions in Icelandic debt securities are settled through Danske Bank, Copenhagen (depository code 85). Instruction Provisioning Deadline for Settlement confirmation receipt of valid start end instruction from to value Receipts FOP a :30 SD-1 SD+1 (n) SD+1 (cts) Deliveries FOP NTP SD-1 12:30 SD-1 12:30 SD-1 SD+1 (n) SD+1 (cts) a. It is mandatory for customers to pre-advise free of payment receipts of Icelandic debt securities using a free of payment instruction. CBL s depository, Danske Bank, will refuse all such free of payment receipts that have not been pre-advised by the customer. Procedures for domestic counterparties Domestic counterparties delivering or receiving securities to or from CBL customers must instruct the Icelandic Securities Depository (ISD) as follows: Deliver to/receive from: Danske Bank's account at Glitnir Banki hf For the account of:, account Back-to-back processing Back-to-back processing is not available for transactions in Icelandic debt securities. Failed instructions Instructions with Icelandic counterparties that have not settled by the 30th calendar day following the date of the first attempted settlement are generally cancelled by CBL. However, CBL reserves the right to cancel instructions that have not settled by the fifth domestic business day after the requested settlement date and have not been re-confirmed by the customer. Securities lending and borrowing Icelandic debt securities eligible in CBL qualify for CBL s securities lending and borrowing programme. Foreign exchange Foreign exchange services for are available to customers automatically. To complete foreign exchange conversions for, customers should contact CBL s Treasury Desk directly via an authenticated communications medium. 25 October 2006 Iceland - 3

4 Details of security types Instrument Currency Maturity Interest rate Treasury bills Housing bonds (indexed) Housing Authority bonds (indexed) Treasury notes Treasury bonds (indexed) a. Bullet: Any interest due is paid on redemption date. up to 1 year 25 to to 42 6 to to 20 Interest / Dividend payment frequency Form zero coupon - dematerialised fixed quarterly dematerialised fixed annual dematerialised fixed or zero coupon fixed or zero coupon annual bullet a dematerialised dematerialised Income payments Fixed income securities Record date in CBL is one business day prior to coupon payment date. Interest on Icelandic debt securities is credited to the customer s account in the overnight processing for coupon payment date with same-day value, based on the positions on record date. Holding restrictions Icelandic debt securities beneficially owned by Icelandic residents must not be held in Clearstream Banking. Customers are responsible for ensuring compliance with this restriction. Taxation No withholding tax is deducted from interest on Icelandic debt securities in Clearstream Banking. 18 March 2005 Iceland - 4

5 Iceland Instruction specifications CreationOnline Receive Free a M Trade Date O Deal Price M Place of Settlement BIC ICSDISR1XXX - Iceland M Delivering Agent BIC counterparty s BIC or Delivering Agent Name and Address (if BIC does not exist) counterparty s name (ICEX member name) M Seller BIC ordering party s BIC or Seller Name and Address (if BIC does not exist) ordering party s name O Account ordering party s account Deliver Free M Trade Date O Deal Price M Place of Settlement BIC ICSDISR1XXX - Iceland M Receiving Agent BIC counterparty s BIC or Receiving Agent Name and Address (if BIC does not exist) counterparty s name (ICEX member name) M Buyer BIC beneficiary s BIC or Buyer Name and Address (if BIC does not exist) beneficiary s name O Account beneficiary s account a. It is mandatory for customers to pre-advise free of payment receipts of Icelandic debt securities using a free of payment instruction. CBL s depository, Danske Bank, will refuse all free of payment receipts that have not been pre-advised by the customer. Creation via SWIFT and CreationDirect MT540 Receive Free a Seq M :98a: :TRAD //Trade date/time B O :90a: :DEAL //Deal price M :95P: :PSET //ICSDISR1XXX E1 M :95P: :DEAG //Counterparty s BIC or :95Q: :DEAG //Counterparty s ICEX member name (if BIC does not exist) M :95P: :SELL //Ordering party s BIC or :95Q: :SELL //Ordering party s name (if BIC does not exist) O :97A: :SAFE //Ordering party s account MT542 Deliver Free M :98a: :TRAD //Trade date/time B O :90a: :DEAL //Deal price M :95P: :PSET //ICSDISR1XXX E1 M :95P: :REAG //Counterparty s BIC or :95Q: :REAG //Counterparty s ICEX member name (if BIC does not exist) M :95P: :BUYR //Beneficiary s BIC or :95Q: :BUYR //Beneficiary s name (if BIC does not exist) O :97A: :SAFE //Beneficiary s account a. It is mandatory for customers to pre-advise free of payment receipts of Icelandic debt securities using a free of payment instruction. CBL s depository, Danske Bank, will refuse all free of payment receipts that have not been pre-advised by the customer. 24 March 2006 Iceland - 5

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