Securities settlement system

Securities issued in Lithuania are registered at the accounts of the Central Securities Depository of Lithuania (CSDL). When the holders and/or custodians of securities change, the transfer of such securities from one account to another should be performed. When such a transfer is performed together with a related funds transfer (for example, when buying or selling securities), it is called a delivery versus payment securities transfer, whereas in the event that the securities transfer is not related to the funds transfer, it is called a free-of-payment securities transfer.

It is important to ensure the application of delivery versus payment principle where possible. This principle means that securities are transferred simultaneously with the funds transfer. This helps avoiding the situation when one transaction party transfers securities or funds, but does not receive funds or securities from another party. CSDL system applies this principle to all securities transfers against payment. First, securities are blocked in the securities accounts of the CSDL. Then, the Securities Settlement System submits an order to the respective payment system to transfer funds between the accounts of participants. After receiving a notification on the successful transfer of funds, the Securities Settlement System transfers securities.

The system settles securities transactions concluded at the AB NASDAQ OMX Vilnius securities exchange and outside of it, while the related funds transfers are performed via the payment system LITAS-RLS (in litas) or via the payment system TARGET2-LIETUVOS BANKAS (in euro). Settlements are performed according to the results of trading sessions submitted by the exchange information system and transfer orders for transactions in shares, corporate bonds and Government securities electronically submitted by system participants.

Securities held with one central securities depository (CSD) may be transferred to another CSD. For this purpose, the first CSD must open a securities account for the second CSD. This is called a link. When only one CSD has a securities account in another CSD, such a link is called a unilateral link, whereas when both CSDs have accounts with one another, it is called a bilateral link. CSDL has bilateral links with the Estonian CSD (EVK) and the Latvian CSD (LCD) and a unilateral link with an international CSD Clearstream Banking Luxembourg s.a. The Polish CSD (KDPW) also has a unilateral link with the CSDL.

More comprehensive information on the system’s operation, schedule and pricing is published on the CSDL' website, whereas specific system participants are listed in the Official List of Systems.