CIBC Mellon has extended its custody network to include Iceland, taking its total coverage to 83 countries. Islandsbanki HF, Reykjavik has been selected as local agent.
CIBC Mellon says trading of securities in Iceland occurs on the Iceland Stock Exchange with a T+1 settlement period. For off-exchange trades, a settlement period of T+2 many be negotiated between the parties. Trades are settled against the local currency of Icelandic Krona.
The Verdbrefaskraning Islands HF, or the Icelandic Securities Depository Ltd., is the securities depository in Iceland and holds all listed securities in dematerialized form. Registration at the CSD is completed upon settlement, though registration of physical securities can take as long as a month. However, says CIBC Mellon, securities may be traded during the registration period.
There are no investment restrictions on non-resident investors in Iceland. However, says CIBC Mellon, notifications must be given when voting rights or the nominal price of shares reaches, exceeds or drops below the following limits: 5 per cent, 10 per cent, 20 per cent, 33 per cent, 50 percent and 66 per cent.
Clients of CIBC Mellon will be using segregated securities accounts. A certificate of incorporation (or equivalent legal establishment document) is required to open an account in Iceland, and a tax identification (ID) number is then provided.
The Icelandic market does not recognize ex-date, record date or payment date, says CIBC Mellon. The company determines the dates to be applied in their announcement of the event. Dividends and bond interest are usually paid twice a year, and in most cases credited on pay date. Companies in Iceland usually hold their general meeting in the spring. The Icelandic Stock Exchange blocks all shares one hour prior to a company’s meeting and releases the shares once the meeting is finished.