Compliance Report ISSA Recommendations 2000

ISSA - International Securtities Services Association

Compliance to the ISSA Recommendations 2000

Market: Sweden

Status: October 29, 2001

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? The CSD of Sweden is VPC, which is a private owned company. The four major banks in Sweden hold 98.6 % of the shares. Thus, the board of directors is answerable also to a major part of the users of VPC services.

2. Does any single organisation, or sector (e.g. brokers, custodians, Stock Exchange) have a large voting position at the board of the depository? Yes, the four major banks in Sweden banks in their capacity as brokers and custodians have a 98 % voting power of VPC, the Swedish CSD.

3. Is there cross subsidisation of products (e.g. international services subsidised by local ones or transaction costs subsidised by asset servicing charges)? No, the price list is adjusted according to the cost of different service lines.

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)? VPC is governed as a normal private company by its board of directors. In addition VPC co-operates with the Equity Market Council and the Legal Council of Swedish Securities Dealers Association and in a number of task forces set up together with the industry. In cash issues VPC co-operate with the Swedish Central Bank (Riksbank) and with Swedish Bankers' Association.

5. What is the communications strategy of the depository to its stakeholders and how is this run? VPC is constantly in contact with all the account operators/clearing members, i.e. banks and securities companies and with the Riksbank through the VPC system, mail and fax. It also communicates with the issuers.

1.	Is the board that governs the depository answerable to its users?	The CSD of Sweden is VPC, which is a private owned company. The four major banks in Sweden hold 98.6 % of the shares. Thus, the board of directors is answerable also to a major part of the users of VPC services.
2.	Does any single organisation, or sector (e.g. brokers, custodians, Stock Exchange) have a large voting position at the board of the depository?	Yes, the four major banks in Sweden banks in their capacity as brokers and custodians have a 98 % voting power of VPC, the Swedish CSD.
3.	Is there cross subsidisation of products (e.g. international services subsidised by local ones or transaction costs subsidised by asset servicing charges)?	No, the price list is adjusted according to the cost of different service lines.
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)?	VPC is governed as a normal private company by its board of directors. In addition VPC co-operates with the Equity Market Council and the Legal Council of Swedish Securities Dealers Association and in a number of task forces set up together with the industry. In cash issues VPC co-operate with the Swedish Central Bank (Riksbank) and with Swedish Bankers' Association.
5.	What is the communications strategy of the depository to its stakeholders and how is this run?	VPC is constantly in contact with all the account operators/clearing members, i.e. banks and securities companies and with the Riksbank through the VPC system, mail and fax. It also communicates with the issuers.