SINTEF optimizes billions worth of transactions - every day!

During the spring of 2004, SINTEF carried out a project for VPS ASA (The Norwegian Central Securities Depository) to further develop a software system used for optimal clearing and settlement in the Norwegian financial market. Upon successful completion of the initial project, SINTEF and VPS signed a long-term agreement where SINTEF assumes responsibility for further development and maintenance of the software.

“VPS chose SINTEF as our partner because of SINTEF’s expertise in optimization and software development. VPS is very satisfied with the work SINTEF does. They possess high competence and deliver high quality solutions”, says Sissel Bergh Bakke, Senior Vice President and Chief Information Officer at VPS.

All transactions on Oslo Stock Exchange (Oslo Børs) are settled by VPS. In November 2004, the average value of transaction per day in VPS’ settlement system was NOK 16 billion from an average number of 30 000 transactions.

All trades in financial instruments (e.g. stocks and bonds) may be entered into the security settlement system, whether traded on the Stock Exchange or not. Participants may have entered into more contracts than covered by securities or money at their disposal. Thus, not all trades can be settled, leading to the problem of deciding which trades to settle. Our software solves this problem by maximizing the total value of the whole settlement, at the same time ensuring that priorities among trades are respected.  This optimization module is a cornerstone in VPS’ settlement system.

VPS and SINTEF continue working together to meet the needs of the participants in the settlement system.