The CSDs in Denmark (VP) and Iceland (VS) have opened a link between the two markets, and have secured the approval of the financial authorities in both countries to operate it.
The link is designed to reduce trading costs for both Danish and Icelandic investors, by enhancing the efficiency of clearing and settlement of cross-border trades in Danish and Icelandic securities. Essentially, the link enables Danish securities to be registered in VS, and Icelandic securities to be registered in VP. “This means that Danish investors can trade Icelandic securities on equal terms with Danish Securities which will make it considerably easier and more interesting for Danish investors to trade in Icelandic securities,” say the two CSDs in a joint statement. “Similarly, it becomes easier for Icelandic investors to trade in Danish securities.”
The link will also enable VP and VS to handle the distribution of interest and dividends in Danish kroner and Icelandic kroner, respectively, in the same way as they do today in the domestic currency.
To begin with, the link will be open to 20 of the most traded Danish securities and 14 of the most traded Icelandic securities.