Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 4

Recommendation 5 Recommendation 6 Recommendation 7 Recommendation 8

Market selection

Recommendation 1

Securities Systems* have a primary responsibility to their users** and other stakeholders. They must provide effective low cost processing. Services should be priced equitably.

* Securities Systems = depositories, settlement and clearing systems
** Users = customers of the securities system, and all other parties to whom the securities system owes a duty of care

1.	Is the board that governs the depository answerable to its users?	Each year CSDL presents annual report and audited financial statements to industry participants in paper form and on the web site. Though the brokers and issuers are not stakeholders of CSDL, they have been represented on the CSDL Board since its foundation in 1994. The interests of market participants and investors are also insured by Security Commission (SC), which holds substantial rights in the CSDL and has a representative participating in all CSDL's Board and shareholders' meetings.
2.	Does any single organisation, or sector (e.g. brokers, custodians, Stock Exchange) have a large voting position at the board of the depository?	The Board has 9 members, 4 of them represent the Bank of Lithuania (BL), 3 - Ministry of Finance (MF), 1 - Stock Exchange (SE) and issuers, 1 - National Brokers' Association.
3.	Is there cross subsidisation of products (e.g. international services subsidised by local ones or transaction costs subsidised by asset servicing charges)?	The size of fees is proportional to labour costs and other operational expenses, used for international services as compared to local services (annual and entry fees are 4 times greater while custody fees are twice as much for international services if compared to the local ones). Transaction fees and asset servicing charges are in accordance with operational costs.
4.	What process is in place at the depository to ensure that it meets the needs of all its stakeholders (e.g. institutions, broker dealers, retail investors, issuers)?	CSDL has 2 major stakeholders - BL (holds 60% of all votes) and MF (32%). They have 7 members on the Board that guarantee their interests in service providing and strategic development of CSDL. The interests of brokers and issuers are represented through their 2 members on the Board and, also, indirectly by participation of the SE representative on GSM (has 8% of votes) as well as by the statutory powers of SC with regard to CSDL (see R1q1) .
5.	What is the communications strategy of the depository to its stakeholders and how is this run?	Stakeholders take part in making all important CSDL decisions, which are immediately presented through SE information system, REUTERS and directly to market participants involved.