Nasdaq has chosen Citi Investor Services to provide Account Operator Services, applicable in the Nordics and Euroclear Bank
The mandate, which went live this week after a detailed integration plan, sees Citi positioning itself at the forefront of the Nordics’ evolving market infrastructure landscape by taking on the technical and operational investments required for sweeping changes like T2S and T+1. In doing so, Citi offers financial market infrastructures – including Nasdaq – a service and technology infrastructure for post-trade processes, freeing them from infrastructure upgrades and regulatory adaptation.
Instead of investing resources into these market changes, exchanges and clearing houses can use Citi as their operational engine. As Ola Mjorud, Nordic head of Custody, at Citi explained, “We step in between the client and their CSD link so that the client only needs to communicate with us, while we communicate with the market. The client maintains their own CSD membership, market share but it’s our engine, our operations team, our technology that makes sure this all works properly.”
This partnership approach allows firms like Nasdaq to focus on their core business – trading and clearing – while Citi manages the complexity and ongoing market changes. “You need to build for that, you need to adapt your systems for that, you need operational excellence for that whereas Citi can do that for you, so you don’t have to worry about that,” Mjorud noted. The mandate also enables Nasdaq to move from a fixed to a variable cost structure as the derivatives exchange continues to provide clearing solutions to clients worldwide.
Nordic market changes
Nasdaq’s selection happens as Euroclear plans to replace the Swedish market infrastructure system, VPC. Changes such as these require investments and upgrades from markets participants, something that Citi, which has a custody network covering 63 markets, is used to. “We do this anyway, while clients only need to focus on their core business while also maintaining direct membership in CSD.” Clients include global custodians, clearing houses, derivatives venues and banks that need to maintain a CSD link but want to avoid costly upgrade when infrastructure changes are required.
Nasdaq’s Roland Chai, president of Nasdaq Europe, commented, “Working with Citi was a natural step as we share a common desire to simplify post-trade processes by focusing on harmonised solutions and innovation. Citi was the preferred choice for Nasdaq as we sought to gain efficiencies across our post-trade activities.”
