The securities settlement system (VPO)
Securities transactions are settled in the securities settlement system. Settlement is made for claims in both securities and cash.
In Norway, there is a joint settlement system for equity instruments, bonds and short-term paper, referred to as the securities settlement system (VPO). Securities brokers, banks and Norges Bank participate in the securities settlement system. Norges Bank continuously assesses the impact of securities settlements on financial stability.
Banks’ participation in the securities settlement system is regulated by Avtale om oppgjør av avregninger fra Verdipapirsentralen ASA (VPS) mellom (banken) og Norges Bank (Norwegian only).
Investment firms’ participation in the securities settlement system is regulated by Avtale om oppgjør av avregninger fra Verdipapirsentralen ASA (VPS) mellom (verdipapirforetaket) og Norges Bank (Norwegian only). In addition, the investment firms must provide a guarantee from their bank. The bank must have a settlement account in Norges Bank in order to provide such a guarantee.
The Governing Council of the ECB decided 17 July 2008 to launch the TARGET2-Securities (T2S) project to establish a common technical platform for settlement of securities transactions within and between European countries. 10 September 2009 Norges Bank sent the following letter to the ECB regarding negotiations on securities settlement in Norwegian Kroner in T2S: "Regarding Norwegian kroner in TARGET2-Securities".