The VP System |  |
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| VP Securities Services settles trades in securities. The cash side of securities trading is settled via the participants' accounts with Danmarks Nationalbank. |
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Two main functions
In Denmark, securities are registered with VP Securities Services – VP for short. VP has two overall main functions:
- Registering securities
- Clearing and settling securities trades
The settlement of securities trades is the interesting part in relation to payment systems.
Exchange of money for trades in securities
The standard settlement cycle for a securities trade is 3 days in Denmark, i.e. the trade is settled 3 days after it is reported to VP.
During a trading day, the traders report their purchases and sales of securities to VP. At fixed times during the settlement day, VP calculates the net position of each participant, both in respect of securities and money. This is called clearing. The net positions are then exchanged in a settlement. For securities, this is done at VP, while the money amounts are exchanged between the participants' accounts with Danmarks Nationalbank. Securities trades are settled in euro and Danish kroner.
Participants exchange not only securities, but also interest and other payments, via their accounts with Danmarks Nationalbank. Interest payments are exchanged in euro, Danish kroner, Swedish kronor and Icelandic kroner.
Participants may also perform so-called gross settlement, i.e. each trade is settled separately in real time. |
