Safekeeping of financial instruments in the Central Securities Depository - Nasdaq CSD SE

Citadele banka AS (Bank) is a direct participant in the central securities depository - Nasdaq CSD SE (Nasdaq CSD), with the direct participation in the account operator’s status in Baltic states  Securities Settlement Systems. Therefore, to ensure safekeeping of financial instruments registered in Latvia, Lithuania and Estonia in favour of the Bank and its clients, the Bank opened financial instruments accounts in Nasdaq CSD.

Safekeeping of financial instruments registered in the Baltic states in favour of the Bank’s clients is possible by holding:

• financial instruments owned or held by different clients of the Bank on one financial instruments account (participant’s client account);
• financial instruments owned or held by one client of the Bank on one financial instruments account (individual account).

In all cases, financial instruments of the Bank’s clients are held and accounted in Nasdaq CSD separately from the Bank’s financial instruments. Financial instruments accounted on a participant’s client account or individual account will not be used to satisfy claims of creditors of Nasdaq CSD or the Bank, also in case of insolvency.

Transactions with clients’ financial instruments accounted in Nasdaq CSD are performed with intermediation of the Bank on the basis of clients’ orders.

The Bank’s commission fees related to safekeeping, transfers of financial instruments and other custodian bank services with regard to financial instruments accounted on a participant’s client account or individual account are determined in the Bank's pricelist for private persons and for companies. 

A fee for opening an individual account is determined according to the pricelist of Nasdaq CSD. Safekeeping of financial instruments on an individual account on the level of Nasdaq CSD may be related to increased costs, in particular when encumbrances are registered with regard to financial instruments (e.g. financial collateral, etc.).

The client may choose where the Bank shall ensure safekeeping of the client’s financial instruments registered in Latvia, Lithuania and Estonia, i.e. on which account in Nasdaq CSD – on a participant’s client account or individual account. The client shall inform the Bank of his/her choice submitting a respective order to the Bank. Until the Bank receives such order from the client, all client’s financial instruments registered in Latvia, Lithuania and Estonia shall be held on a participant’s client account in Nasdaq CSD.

Detailed information on the account types ensured by the Bank on the level of Nasdaq CSD for safekeeping of financial instruments registered in Latvia, Lithuania and Estonia in favour of the Bank’s clients is provided below.

Individual Account

An individual account is an account on which financial instruments registered in Latvia, Lithuania and Estonia and owned or held by the Bank’s client are accounted. It is opened on the level of Nasdaq CSD in the Bank’s name in favour of one client only, without identification of such client.

The evidence that financial instruments, held on an individual account in the Bank’s name on the level of Nasdaq CSD, are owned by the client is an entry on the client’s financial instruments account opened in the Bank . An entry in an individual account in the Bank’s name on the level of Nasdaq CSD testifies only that financial instruments are held in favour of another person and are held separately.

Custody of financial instruments on an individual account in the Bank’s name is possible only when financial instruments are held on the client’s separate financial instruments accounts on all levels of safekeeping (in other credit institutions, investment brokerage companies, etc.).

In some cases, safekeeping of financial instruments on an individual account on the level of Nasdaq CSD may mitigate risks related to the activity of the Bank as an operator of accounts opened in Nasdaq CSD as well as may speed up returning of securities to the client in case of insolvency of the Bank.

Participant's Client Account

A participant’s client account is opened in the Bank’s name on the level of Nasdaq CSD. Financial instruments held or owned by several clients of the Bank are held together and accounted on a participant’s client account, without identification of such clients.

Financial instruments held on a participant’s client account on the level of Nasdaq CSD are held separately from the Bank’s financial instruments.

An entry on a participant’s client account attests that financial instruments are held in favour of several clients of the Bank and each client and its financial instruments are not identified separately.

The evidence that financial instruments held on a participant’s client account on the level of Nasdaq CSD are owned by the client is an entry on the client’s financial instruments account opened in the Bank.

The Bank ensures immediate registration and accounting of the client’s transactions with financial instruments on the client’s financial instruments account in the Bank and on the participant’s client account on the level of Nasdaq CSD.