Bank of Lithuania

Securities settlement system

The securities settlement system VPAS is used for executing securities transfers. The operator of the system is Nasdaq CSD SE.  The system was registered with the Bank of Lithuania under the Resolution of the Board of the Bank of Lithuania on 18 September 2017. Moreover, Nasdaq CSD SE is connected to TARGET2-Securities (T2S) – a European securities settlement infrastructure that executes standardised settlements for domestic and cross-border securities transactions.



Nasdaq CSD SE is the first central securities depository (CSD) in the European Union, authorised under CSDR. Nasdaq CSD SE is established in Latvia with the branches in Estonia and Lithuania. The CSD operates three securities settlement systems, a system in each country, and offers notary and central maintenance services as well as certain ancillary services.

The authorisation under CSDR means that Nasdaq CSD SE follows the requirements set in the Regulation in the field of securities settlement, organisational structure, integrity of the issue, protection of securities, risk management, access, creation of links, etc. Nasdaq CSD SE is free to offer its services in other European Union countries and is subject to supervision including at least a yearly review and evaluation.

The connection to T2S allows the participants of VPAS to benefit from the most advanced liquidity and financial risk management tools: auto-collateralisation and intraday credit facility, settlement recycling, night-time settlement, and continuous optimisation processes.

Currently, securities issued in Lithuania are registered on Nasdaq CSD SE accounts; however, securities market participants can choose any CSD authorised under CSDR to register their issues with. When the holders and/or custodians of securities change, such securities must be transferred from one account to another. When such a transfer is performed together with a related funds transfer (e.g. when buying or selling securities), it is called a delivery versus payment securities transfer, whereas when the securities transfer is not related to a funds transfer, it is called a free-of-payment securities transfer.

It is important to ensure the application of the delivery versus payment principle. This principle means that securities are transferred simultaneously with a funds transfer. This helps avoiding the situation when one party to a transaction transfers securities or funds but does not receive funds or securities from the other party. The Nasdaq CSD SE VPAS applies this principle to all securities transfers against payment. 

Securities held with one CSD may be transferred to another CSD through the so-called link. When only one CSD has a securities account with another CSD, such a link is called a unilateral link, whereas when both CSDs have accounts with each other, it is called a bilateral link. Nasdaq CSD SE has a unilateral link with the international CSD Clearstream Banking Luxembourg s.a. The Polish CSD (KDPW) also has a unilateral link with Nasdaq CSD SE.

More information on the system’s operation, schedule and pricing is available on the Nasdaq CSD SE website. T2S is described on the European Central Bank website and individual system participants are listed in the Official List of Systems and Their Participants.



STEP2 is a Pan-European retail payment system operating since 2003, where credit transfers and direct debit transactions in euro are executed under uniform terms and conditions.



You can participate in the system both directly and indirectly. Institutions that provide bank services and are registered in the European Economic Area, as well as hold an account in TARGET2 and are able to send/receive EBA Clearing files may become STEP2 participants. Currently, the system has more than 130 direct participants from around the EU and other countries that execute credit transfers and direct debit transfers in line with SEPA requirements.

Part of banks and foreign bank branches operating in Lithuania (AB DNB bankas, Swedbank, AB, AB SEB bankas, Nordea and Danske bank branches in Lithuania, etc.) are indirect system participants – they execute payments through their parent banks or institutions within groups that are direct STEP2 participants.

STEP2 participants can send payment orders to the system 24/7; however, payment orders are executed at a designated time on business days. STEP2 has five same-day settlement cycles and two (optional) night-time settlement cycles for SEPA credit transfers. There are two settlement cycles for direct debit payments within the system. The final settlement is carried out in real time via TARGET2.

More information on the purpose and operation of STEP2 is available on the EBA Clearing website.


Last update: 18-04-2017