The registration of securities ensures the enforceability of shareholders’ ownership rights, a higher degree of circulation safety and greater trust by investors, partners and financial institutions.

Nasdaq CSD records securities issues in book-entry form and allocates an International Securities Identification Number (ISIN) to each securities issue. Nasdaq CSD is a National Numbering Agency (NNA) and has the authority to assign ISINs to financial instruments issued in Estonia, Iceland, Latvia and Lithuania.

The following types of financial instruments may be registered in Nasdaq CSD: equities, debt instruments, funds, rights, warrants and options. The registration of other financial instruments can be added if sufficient client demand exists.

Nasdaq CSD provides the initial registration of securities and admits such securities to the Settlement System specified by the issuer. Securities requested for admission must comply with the following general admission criteria:

  • Law under which the securities are constituted allows securities to be represented in book-entry form subsequent to a direct issuance in dematerialized form;
  • Law under which the securities are constituted does not prohibit securities to be validly issued and transferred in the Settlement System to which admission is requested;
  • All securities of the same issue are fungible;
  • Admission of securities complies with the requirements of the law applicable to the Settlement System to which the admission is requested.

As a general rule, Nasdaq CSD admits securities to the “home” Settlement System for the respective issuer:

  • Shares of companies registered in the Estonia and other securities constituted under Estonian law are admitted to Estonian Settlement System;
  • Shares of companies registered in the Iceland and other securities constituted under Icelandic law are admitted to Icelandic Settlement System;
  • Shares of companies registered in the Latvia and other securities constituted under Latvian law are admitted to Latvian Settlement System;
  • Shares of companies registered in the Lithuania and other securities constituted under Lithuanian law are admitted to Lithuanian Settlement System.

Nasdaq CSD may also admit securities of a foreign issuer seeking to exercise the freedom of issue (an issuer incorporated in a different jurisdiction from that of the Settlement Systems where initial recording of securities is applied for) to any Settlement System, provided the issuer complies with the admission requirements.

The registration of shares of a private limited company on Nasdaq CSD is optional. If a private limited company registers its shares, the company will free itself from the need to carry out notarial procedures related to shares and ensure its owners a neutral and safe record-keeping of the shares.

Admission procedure

A legal entity which seeks the right to issue securities in one or several Settlement Systems of Nasdaq CSD must submit a standard application form and supporting documents. After receiving an application, Nasdaq CSD will decide whether to initially record and admit securities to the Settlement System specified by the issuer no later than within three months, or more sooner if required by the applicable law.

Nasdaq CSD has the right to request additional information and documents within 15 business days after the date an application is submitted if:

  • Information provided in the application or supporting documentation is inaccurate, misleading or incomplete;
  • Additional information or documentation is necessary to assess the applicant’s compliance with the requirements and admission criteria;
  • Additional information or documentation is necessary for carrying out a comprehensive risk assessment provided by Article 49 (3) of the Regulation (EU) No 909/2014.

If admission is requested by a foreign issuer, the Nasdaq CSD shall have the right to request that the issuer provide, at its own expense, a reasoned and independent legal opinion from a reputable law firm or attorney-at-law in the form and substance acceptable to Nasdaq CSD, demonstrating and establishing that possible conflict of laws issues would not jeopardize compliance with the admission criteria.

Registration of equities

Documents to be submitted to Nasdaq CSD by issuers of equities:

  • An application for the registration of shares;
  • Articles of association;
  • Certificate of Registration;
  • Issuer agreement with schedules signed by the issuer;
  • Initial register agreement signed by the issuer;
  • Deed of delivery and acceptance of the issuer’s shareholders register;
  • Registration order.

List of documents to be submitted to Nasdaq CSD may vary and is subject to specific requirements of respective Settlement System of Nasdaq CSD.

After the documents are submitted, Nasdaq CSD will verify whether they meet the requirements. If they do, Nasdaq CSD will make the necessary (register) entries within five business days.

An application for registration and additional documents may be submitted to Nasdaq CSD:

  • By standard mail;
  • By e-mail signed with a digital signature;
  •  At Nasdaq CSD’s local offices.

Deregistration of equities

The shares of a company entered in the register shall be deleted from the register upon:

  • Dissolution of the company after the termination of the liquidation or bankruptcy proceedings;
  • Dissolution of the company in the event of merger or division;
  • Transformation of a public limited company into a private limited company, the shares of the private limited company shall be removed from the register of the basis of an application of the issuer;
  • Shareholders’ decision to deregister the shares from Nasdaq CSD, if the shares are not pledged.

The process of deregistration is initiated before an application is submitted to the Commercial Registry, but shares are deleted from securities accounts after the relevant entry is made in the Commercial Registry.

Specific deregistration process may vary per local legislation and is subject to specific requirements of respective Settlement System of Nasdaq CSD.

Registration of debt securities

In order to register debt securities with Nasdaq CSD, registration of the securities in a central registry must be specified in the terms and conditions of the issue. Registration of debt securities makes it easier for a company to manage them.

Registration of debt securities in the central registry also makes it easier for a company to obtain bank loans. For investors, it ensures safe and reliable registration of ownership of securities, facilitates their purchase and sale and makes the securities available for pledging as security for loans or other obligations.

In order to register debt securities, a company must provide Nasdaq CSD with:

  • An application for the securities registration;
  • Articles of association;
  • Certificate of Registration;
  • Issuer agreement with schedules signed by the issuer;
  • The original or a certified copy of the agreement with an issuer agent;
  • The issue terms and conditions;
  • Registration order.

List of documents to be submitted to Nasdaq CSD may vary and is subject to specific requirements of respective Settlement System of Nasdaq CSD.

Once properly completed documents are submitted, Nasdaq CSD makes necessary entries in the central registry and securities are transferred to the investors’ securities accounts within no more than five business days. Issuer must also apply for a unique internationally acknowledged identification code (ISIN) for the securities which is assigned by Nasdaq CSD before the securities are registered.

Redemption of debt securities

The cancellation of debt securities takes place on the redemption date, when the company buys the debt securities back and redemption payments are made to the investors. On the redemption date debt securities are deleted from the investors’ securities accounts.

In order to cancel debt securities, the issuer company must provide to Nasdaq CSD with the following:

  • An application for redemption of debt securities from the registry;
  • A list of investors in case of partial redemption of securities. The list of investors includes the name of the owner of the debt security, personal identification code/registry code, the number of the securities account, and the number of securities to be deleted;
  • Other special instructions.

Nasdaq CSD deletes the securities from the investors’ securities accounts within two working days after receiving the application, unless if the application requires a later date for making entries.

Specific cancellation process may vary per local legislation and practices, and is subject to specific requirements of respective Settlement System of Nasdaq CSD.

Obligations of registered companies

When the shares of a company have been registered at Nasdaq CSD, the issuer is required to notify Nasdaq CSD as the keeper of the register of all circumstances concerning amendments to rights and obligations related to issued securities. The circumstances to be notified could be as follows:

  • Increase/reduction of nominal value;
  • Changes in share capital• merger;
  • Reorganisation;
  • Fund issue;
  • Changes in issue terms;
  • Payments from shares;
  • The adoption of a liquidation resolution by the issuer or initiation of bankruptcy proceedings with regard to the issuer;
  • Changes in management;
  • Change in company’s name;
  • Changes in company’s contact details.