A new EEA settlement discipline regime for securities trading (CSDR) enters into force on 1 February 2022, cf Commission Delegated Regulation EU) 2018/1229 of 25 May 2018 supplementing Regulation (EU) No 909/2014 of the European Parliament and of the Council with regard to regulatory technical standards on settlement discipline. The purpose of the supplementary regulation is to increase settlement rates for securities settlement by introducing, among other things, cash penalties for settlement fails.

The new regime has potential importance for the treatment of securities pledged as collateral for loans from Norges Bank. This applies to pledged securities held by Euroclear Bank SA/NV and by Clearstream Banking SA. Norges Bank therefore introduces more precise rules for pledging and releasing such securities and specific rules regarding the responsibility for any cash penalties, cf new section 5.6 Collateral held by Euroclear Bank SA/NV or Clearstream Banking SA of the terms and conditions for account management for banks (new section 5.5 of the terms and conditions for account management for central counterparties).

For each settlement date, a deadline of 3:30 pm is set for requests to Norges Bank for registering and releasing securities as collateral for loans. The deadline appears in the operating schedule for NBO. Requests for pledging or releasing collateral that Norges Bank receives after the deadline will be automatically rejected. Rejected requests must be resubmitted to Norges Bank with a later NBO settlement day.

In addition to the amendments following the new CSDR settlement discipline regime, Norges Bank tightens the rules on the treatment of pledged securities in the event of maturity or redemption, cf new second paragraph in section 5.4 Instalment, redemption and maturity of the terms and conditions for account management.

Terms and conditions with all amendments were sent for consultation by letter dated 27 October 2021 to banks and central counterparties with pledged collateral in Euroclear Bank SA/NV or Clearstream Banking SA and to Finance Norway. Norges Bank has not received any comments to the amendments.

This circular constitutes an announcement of the revised terms and conditions for banks and central counterparties respectively and revised operating schedule for NBO in accordance with section 1 of the terms and conditions for account management.

Terms and Conditions for Account Management at Norges Bank - Banks (pdf)

Terms and Conditions for Account Management at Norges Bank - Central Counterparties (CCP) (pdf)

Operating Schedule for Norges Bank’s settlement system (pdf)