Compliance Report ISSA Recommendations 2000

ISSA - International Securtities Services Association

Compliance to the ISSA Recommendations 2000

Market: Norway

Status: October 31, 2001

Recommendation 1
Recommendation 2
Recommendation 3
Recommendation 4

Recommendation 5
Recommendation 6
Recommendation 7
Recommendation 8

Market selection

Recommendation 8

Local laws and regulations should ensure that there is segregation of client assets from the principal assets of their custodian; and no possible claim on client assets in the event of custodian bankruptcy or a similar event. Regulators and markets, to further improve investor protection, should work:

to ensure clarity on the applicable law on cross border transactions
to seek international agreement on a legally enforceable definition of finality in a securities transaction
to ensure that local law fully protects the rights of beneficial owners
to strengthen securities laws both to secure the rights of the pledgee and the protection accorded to client assets held in Securities Systems.

1. Under local rules and regulations, what are the segregation requirements for keeping client assets and custodian assets in the depository? In the Norwegian market every beneficial owner has his own Security account by law.
One exception is the possibility to apply for nominee licence registration, restricted to foreign customer accounts.

2. How are clients' assets protected in the event of insolvency of a custodian or depository? Client assets are protected through registration in beneficial owners' name.

3. Does local law recognise the existence of beneficial owners who may differ from the legal owner of a security? This difference is not recognized within the system, but may apply on a case by case basis with the tax authorities.

4. Does local law clearly define the point of time when a settlement, both for the security and the cash involved, achieves finality and thus cannot be unwound? Yes it does.

5. Does a pledgee have an absolute right to realise their security at all times? Whenever there is a legitimate reason to realise, the answer is yes.

6. Does the depository have loss sharing provisions in its rules, and how would these be applied? An eventual loss will be shared among the account operators through an algorithm of size.

1.	Under local rules and regulations, what are the segregation requirements for keeping client assets and custodian assets in the depository?	In the Norwegian market every beneficial owner has his own Security account by law. One exception is the possibility to apply for nominee licence registration, restricted to foreign customer accounts.
2.	How are clients' assets protected in the event of insolvency of a custodian or depository?	Client assets are protected through registration in beneficial owners' name.
3.	Does local law recognise the existence of beneficial owners who may differ from the legal owner of a security?	This difference is not recognized within the system, but may apply on a case by case basis with the tax authorities.
4.	Does local law clearly define the point of time when a settlement, both for the security and the cash involved, achieves finality and thus cannot be unwound?	Yes it does.
5.	Does a pledgee have an absolute right to realise their security at all times?	Whenever there is a legitimate reason to realise, the answer is yes.
6.	Does the depository have loss sharing provisions in its rules, and how would these be applied?	An eventual loss will be shared among the account operators through an algorithm of size.