Clearstream has appointed Danske Bank as its agent in Iceland. The Luxembourg-based ICSD already uses Danske in Denmark.
Clearstream says its customers can now settle free of payment transactions in Icelandic government debt executed on the Icelandic Stock Exchange (ICEX).
With this addition, Clearstream’s network now reaches 40 markets around the globe: 24 in Europe, five in the Americas, ten in the Asia Pacific region and in South Africa.
“This network is the widest of any international central securities depository and enables counterparties in local markets to efficiently settle eligible securities through Clearstream’s operational hub in Luxembourg,” says a Clearstream spokesman.
Clearstream has recently implemented access to the Icelandic market by using a ‘Free of Payment’ (FoP) method, in addition to the ‘Delivery versus Payment’ (DvP) service that already exists between Clearstream and Danske Bank for Danish securities. Free of Payment (FoP) links enable irrevocable delivery of securities but without the guarantee of payment by the counterparty.
Most of Clearstream’s links to markets operate on a ‘Delivery versus Payment’ (DvP) basis. This method eliminates the principal risk for customers through a simultaneous exchange of securities and payments, which in turn builds the necessary confidence required to drive additional market liquidity.