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Participation in securities settlement systems outside the EEA

Securities settlement systems that have been approved by Finanstilsynet have legal protection under the Norwegian Payment Systems Act. As from 1 January 2019, such protection was extended to apply to Norwegian participants in securities settlement systems that have decided that the system shall be subject to the law of a non-EEA state. This may be relevant after brexit.

Section 4-2 of the Norwegian Payment Systems Act provides legal protection for securities settlement systems that have been approved by Finanstilsynet and notified to the EFTA Surveillance Authority (ESA). Such protection implies that agreements on clearing and settlement may be enforced as to their content even if insolvency proceedings are opened against a participant in the system, but as a rule only if the relevant transfer order has been entered into the system prior to the initiation of insolvency proceedings. Corresponding protection applies to Norwegian participants in securities settlement systems that have decided that the system shall be subject to the law of another EEA member state, cf. section 4-1, fourth subsection, first sentence of the Act.

As from 1 January 2019, such protection was extended to apply to Norwegian participants in securities settlement systems that have decided that the system shall be subject to the law of a non-EEA state, cf. section 4-1, fourth subsection, second sentence of the Payment Systems Act. This is particularly relevant in connection with the United Kingdom’s exit from the EU and consequently from the EEA. Such protection is granted only if the Norwegian participant in the securities settlement system has notified Finanstilsynet of its participation and this has been announced on Finanstilsynet’s website.

Participation in securities settlement systems outside the EEA can be notified to Finanstilsynet by ordinary letter (addressed to Finanstilsynet, Infrastructure and Markets Section), specifying the Norwegian participant’s name and LEI number / organisation number, as well as the system joined by the participant and the name of the system operator. Finanstilsynet will request additional information from the notifying party if necessary.

The participation will be published in Finanstilsynet’s registry.