Approved Settlement Banks -

banks approved for settlement with the clearing house

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Cash transactions created in the collateral management system (CMS) through its cash optimization feature are executed in Nasdaq Clearing’s payment system. The payments system utilizes direct debit instructions and credit instructions to automate cash flows and to enable full straight through processing of cash transactions.

To enable automated payments between the clearing participants and the clearing house through the payment system, each participant opens bank account(s) with one or more settlement banks approved by Nasdaq Clearing. Bank accounts will need to be set up for each eligible currency in which the participant is active.

The below table lists approved settlement banks, the locations of their branches and applicable currencies for each branch.

Approved Settlement Banks

Bank Sweden Norway Denmark Finland UK US
The Bank of New York Mellon EUR, GBP, USD
Barclays Bank PLC EUR, GBP, USD
Danske Bank SEK NOK, EUR DKK, EUR EUR GBP
DNB SEK NOK, EUR DKK USD
Handelsbanken SEK, EUR
Nordea SEK NOK, EUR* DKK EUR
SEB SEK, EUR NOK, EUR DKK EUR
Swedbank SEK, EUR

* = Only applicable for members trading commodities products

Download the full list of Approved Settlement Banks

Requirements for Approved Settlement Banks

This information describes the main requirements for a bank acting as an approved settlement bank for Nasdaq Clearing and conducting settlement for clearing participants other than themselves.

Further requirements may apply as stated in the services agreement entered into between Nasdaq Clearing and an approved settlement bank.

Service Agreement

An approved settlement bank shall have a service agreement with Nasdaq Clearing specifying the terms and specifications of the cash settlement services provided by the settlement bank

Credit Rating

An approved settlement bank shall have a credit rating of “A-“ or higher in accordance with Standard & Poor’s credit rating system, or a credit rating of “A3” or higher in accordance with Moody’s credit rating system.

Currencies

A bank can be approved as settlement bank for one or several of the currencies applicable for settlement on Nasdaq Clearing’s markets. The currencies for which a bank is approved is stipulated in the services agreement between the settlement bank and Nasdaq Clearing. A settlement bank shall have access to central bank liquidity for applicable currencies.

Technical Requirements

An approved settlement bank shall be able to send and receive payment instructions and send payment confirmations and end-of-day statements through SWIFT Net according to the agreed specifications. All transactions for all message types shall be sent over SWIFT Net.

Connection to Central Bank/TARGET2/CHAPS

For payments in SEK, NOK and DKK the settlement bank must be connected to and be able to execute payments through the currency’s respective central bank, the Swedish Riksbank for SEK and the Danish Nationalbank for DKK. For payments in EUR the settlement bank must be connected and be able to execute payments through the TARGET2 settlement system. For payments in GBP the settlement bank must be a direct member of CHAPS for connection to Bank of England.

Cash Settlement Standing Settlement Instructions (SSI)

For Nasdaq Clearing to be able to debit the participant’s accounts, the clearing participant authorizes the clearing house to issue payment instructions and the relevant settlement banks to debit the participant’s accounts in accordance with such instructions. Such authorizations are obtained for each bank account by the following arrangements:

  • under the Clearing Rules (or alternatively under a separate written and signed mandate), each participant authorizes Nasdaq Clearing to issue instructions to debit the participant’s bank accounts, and
  • by issuing a power of attorney (PoA) in favor of the settlement bank, the clearing participant authorizes the settlement bank to debit the participant’s bank accounts in accordance with Nasdaq Clearing’s instructions. PoA must be signed for each currency participant settles in. Several currencies can be on the same PoA if a participant is using the same settlement bank for all those currencies. Cash Settlement SSIs are setup according to Power of Attorney documents that differs depending on the model used.

Models offered for Cash Settlement

Settlement Bank model

Member chooses a settlement bank and its relevant branch depending on currency a Clearing Member wants to settle in. 

The following PoA templates are available:

  • Nasdaq - Power of Attorney: Danske Bank, DNB, Handelsbanken, SEB or Swedbank to be used as a Settlement Bank.
  • Nasdaq - Power of Attorney (Nordea): Nordea to be used as a Settlement Bank.
  • Nasdaq - Power of Attorney (Barclays): Barclays to be used as a Settlement Bank.
  • Nasdaq - Power of Attorney (BNY Mellon): Bank of New York Mellon to be used as a Settlement Bank.

Settlement Agent model

Member uses Settlement Agent for the funding of daily cash settlement obligations.

The following documentation should be provided to Nasdaq Clearing:

  • Nasdaq - Mandate (Settlement Agent): this form must be completed and signed by both the Clearing Member and the Settlement Agent.
  • Nasdaq - Power of Attorney Settlement Agent: this form must be completed and signed by both the Settlement Agent and the Settlement bank.

Settlement Bank as Clearing Member

Members that are approved settlement banks might use themselves as a Settlement Bank.

The following documentation should be provided to Nasdaq Clearing:

  • Nasdaq - Mandate (Settlement bank as Clearing Member) must be signed by a settlement bank.

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