1. Registration and accounting of public financial instruments
According to the Law on the Financial Instruments Market, the Latvian Central Depository is responsible for making book entries of and account financial instruments that are in public circulation. In the capacity of a member of Association of National Numbering Agencies (ANNA), the LCD assigns ISIN and CFI codes to registered securities.
2. Accounting and safe-custody of financial instruments
All securities registered with the LCD are in book-entry form. The LCD provides safe-custody of financial instruments for intermediaries – banks and brokerage companies and maintains both their proprietary and customer accounts.
3. Clearing and settlement for securities trading
The LCD organizes clearing and settlement for NASDAQ OMX Riga stock exchange trades and OTC transactions. As the LCD participants have their corresponding financial instrument accounts with the LCD, the LCD settles the securities leg of a transaction. The cash leg is cleared by the Bank of Latvia according to the LCD instructions. The LCD is authorized by its participants to debit/credit their corresponding cash accounts with the Bank of Latvia for the settlement of securities trades.
4. Maintenance of the Initial Register of shareholders
The LCD keeps the initial lists of shareholders for privatized companies until the owners of securities have opened their own securities account with a LCD participant – a bank or a brokerage company. The initial lists of shareholders are kept in the Initial Register maintained by the LCD.
5. Corporate action services
The LCD provides corporate action services for registered financial instruments.
6. Shareholder registrar services for non-listed companies
The LCD may act as a shareholder registrar also for non-listed joint stock companies. The service is available both to companies having registered and bearer shares.
The LCD:
- may make book-entries of a company's registered and bearer shares either on a separate LCD register or on bank accounts (similar to cash);
- mitigates the shareholders' risks related to proving the title to securities and monitoring their ownership status;
- performs the function of a custodian for a collateral in bank-shareholder deals;
- Settles securities on behalf of customers, making the transactions absolutely safe.
- More
7. Corresponding depositories
The LCD has signed cooperation agreements with the Estonian Central Securities Depository, the Central Securities Depository of Lithuania and Clearstream Banking Luxembourg, allowing LCD participants to act as custodians with regard to the financial instruments registered with a counterpart depository.
