The ES-CPH settlement system

Abstract icon ES-CPH is the Danish system for the settlement of securities transactions and periodic payments in Danish kroner and euros.
ES-CPH settlements are handled by Euronext Securities Copenhagen, which is part of the pan-European stock exchange and market infrastructure group, Euronext Group. Euronext Securities Copenhagen is the central securities depository for all Danish listed securities as well as certain other securities. In addition to settling transactions and periodic payments, Euronext Securities Copenhagen handles issuance, custodian services and administration of securities.

ES-CPH is connected to the pan-European platform TARGET2-Securities (T2S). Under the Danish model for the settlement of securities transactions, the professional participants’ mutual securities transactions are settled on T2S, while private investors’ transactions are settled through ES-CPH’s own settlement system.

ES-CPH is a so-called multilateral net settlement system, which at fixed times of the day calculates the participants’ net securities and cash positions. Securities are settled via accounts at Euronext Securities Copenhagen, while cash is exchanged via accounts at Danmarks Nationalbank. 

A core element of the ES-CPH settlement system is the simultaneous exchange of securities against cash, known as Delivery versus Payment (DvP). The DvP principle ensures that a party to a securities transaction does not deliver its part of the transaction without receiving the other part. In the ES-CPH settlement system, the DvP principle thus contributes to eliminating the principal risk when settling securities transactions. 

The participants in Euronext Securities Copenhagen’s clearing and settlement system are called clearing participants. Participation is open to securities dealers, including banks, mortgage credit institutions and investment firms, as well as Danmarks Nationalbank and clearing houses. 

In the ES-CPH settlement system, securities transactions can also be executed in real time outside the fixed settlement cycles. Real-time settlement may be used when one of the parties to a securities transaction urgently needs liquidity or securities.