Denmark: Financial System Stability Assessment with reports on - IMF

53 ANNEX VREPORT ON THE OBSERVANCE OF THE RECOMMENDATIONS FOR SECURITIESSETTLEMENT SYSTEMSGeneral1. The assessment of the observance of the Committee for Payments and Settlement<strong>System</strong>s (CPSS) and the International Organization of Securities Commissions’ (IOSCO)Recommendations for Securities Settlement <strong>System</strong>s dated November 2001 was carried outas part of the first FSAP mission to <strong>Denmark</strong>, November 7–18, 2005. 322. Værdipapircentralen (VP) is the sole CSD in <strong>Denmark</strong> and registers the ownership ofsecurities issued in the country, clears, and settles securities transactions in the regulatedmarkets and in the OTC market. In 2005, 10.2 million transactions were settled in VP <strong>with</strong> amarket value of DKr 30,924 billion (around US$5,012 billion), made up of DKr27,485 billion in bonds and DKr 3,439 billion in shares.3. Prior to the mission, Danmarks Nationalbank, the central bank, and the DFSA, asoverseers of VP, prepared a comprehensive and thorough self-assessment, which was used asthe basis for this assessment.Scope of the <strong>Assessment</strong>4. VP registers, clears, and settles a broad range of securities, such as treasury bills, allother negotiable money market instruments, bonds issued by the public and private sector,including mortgage bonds, equities, and investment certificates issued by mutual funds.5. Derivatives trades in Danish securities are conducted through OMX DerivativesMarkets, a secondary name to Stockholm Stock Exchange Ltd (SSE), used for the derivativestrading and clearing operations. When OMX clears derivatives transactions, this means thatOMX Derivatives Markets acts as the central counterparty (CCP) for all derivatives tradesconducted in this market. The size of the derivatives market in <strong>Denmark</strong> has so far beenrelatively small (in mid-2005, around 700,000 contracts were outstanding <strong>with</strong> an averagedaily settlement of DKr 1.5 million). Futures and options on Danish securities havepreviously been listed on the FUTOP (CSE) but have recently been transferred to SSE inconnection <strong>with</strong> the merger of the Nordic and Baltic stock exchanges into the OMX GroupAB. 3332 The assessment was performed by Jan Woltjer, Monetary and Capital Markets Department (MCM),International Monetary Fund (IMF), formerly the De Nederlandsche Bank.33 For information on the OMX Group, see: http://www.omxgroup.com/en/index.aspx .