Asset Servicing Times Country Profile Article

Brian Bollen looks at Nordic asset management and its current CSD models following the economic upheaval of the COVID-19 pandemic and the most recent Russian invasion of Ukraine

Coming back to write about the Nordic daycare market for the first time since 2010, mixing it up with memories of similar adventures in 1998 and 2007, turned out to be a rather bizarre experience. Similar, perhaps, to how Rip van Winkle might have felt when he stirred after a 20-year nap in the Catskill Mountains.

How would a modern Rip van Winkle feel to find that companies that were born to serve their distinctly local market now go by the names of Euronext, Euroclear and Nasdaq?

There have indeed been many changes in northern conservation since 2010, reflecting a growing market, observes Robert Vincent Leon Stenmark, head of the Norwegian branch of Northern Trust. “If you don’t change and align with future demand, something is wrong.”

It highlights the impact of the global financial crisis of 2007-2008 on the financial sector and its service providers, pointing to the successive waves of regulation that have followed since, aimed at enhancing transparency, harmonization and the protection of investors. “Euroclear intervened on central securities depositories (CSDs) in Sweden and Finland while Euronext followed suit in Norway (in 2019) and Denmark (2020)”, he observes.

An obvious conclusion to draw as the debate continues over whether these developments are good or bad is that further improvements in technology and advances in digitalization represent as much certainty as possible. discern in the context of Russia/Ukraine. conflict.


Some cynical long-term observers might go so far as to argue that nothing that mattered just weeks ago still matters in what threatens to become the worst possible world.

We can note, however, that Verdipapirsentralen ASA (Euronext Securities Oslo) was incorporated in 1985 as part of the introduction of electronic securities registration to replace physical securities in Norway.

Euronext Securities Oslo is today the only CSD in Norway, providing an efficient infrastructure and services for the settlement of securities transactions and the registration of ownership rights in securities. It provides these services to investors and issuers through a network of investment banks, brokers, banks and fund management companies.

These entities, acting as account operators, are responsible for all client relationships with investors and issuers, and manage day-to-day access to Euronext Securities Oslo’s services. Euronext NV owns 100% of the shares of Euronext Nordics Holdings AS, which in turn owns 100% of Euronext Securities Oslo.

Euronext Securities announced the appointment of Kristine Bastøe in 2021 as the new CEO of Euronext Securities Oslo, effective March 1, 2022, to lead its development and make a decisive contribution to Euronext’s strategy to pan-Europeanise and to develop Euronext Securities.

As part of the new strategy, Euronext Securities announces that over the next three years it will broaden its service offering, converge platforms in all markets, expand its activities across Europe and improve customer experience, with a united team.

Among other notable news, Euronext Securities Oslo obtained approval from the Financial Supervisory Authority of Norway on January 28, 2022 to operate as a CSD, in accordance with the EU Central Securities Depositories Regulation (CSDR).

Audun Bø, outgoing CEO of Euronext Securities Oslo, describes this as a milestone for the exchange. “The CSDR license guarantees our ability to offer a secure, transparent and efficient infrastructure with services associated with the Norwegian capital market, for the benefit of issuers, investors and market participants around the world.”

Sweden and Denmark

Euroclear Sweden is Sweden’s CSD, contributing to safe and efficient securities management in the Swedish market since 1971. It became a member of the Euroclear group in 2008 and calculates that approximately 1,800 companies, including all listed Swedish public limited companies, are affiliated with its titles. system.

About fifty banks and other financial institutions use its system daily to manage and settle securities. Euroclear Sweden’s latest development is a digital service for fund orders between fund companies and fund distributors.

Euronext announced in August 2021 that it had finalized the settlement of the shares in its offer launched on April 23, 2020 to acquire 100% of VP Securities, the Danish CSD.

VP’s main areas of activity are CSD and securities services, and issuer services. VP’s core business is CSD services, serving both the financial industry and its clients’ needs for secure securities issuance, clearing and custody services.

VP also ensures the efficient intermediation of interest, repayments and dividends to investors. Issuer services include issuer agent services and investor services activities, of which VP is the main Danish provider.

Services include issuance services, management of corporate actions, register of shareholders, annual general meetings, investor relations services, investor analytics, and compliance and corporate governance services.

The Danish economy came back strong in 2021 after the slowdown of 2020, when the pandemic left its deep marks on economic activity, wrote the famous chief economist of the Nordea group, Helge Pedersen, in late February.

Thus, the GDP increased by 4.1% during the year. This is the highest level since 1994, when GDP grew by 5.3%. But the progress must of course be seen in the context of last year’s steep 2.1% decline.

In the fourth quarter of 2021, growth was 1.1% compared to the third quarter. This development follows a corresponding increase of 1.2% in the third quarter.

Growth in the last quarter of the year was driven by a strong development in exports, which increased by up to 6.2%, with exports of goods and services increasing significantly. As imports increased by only 2.6 percent, net exports therefore contributed significantly to growth.

In turn, domestic private demand declined; private consumption by 2.7% and gross investment by 4.2%. The decline in private consumption must be linked to the lockdown of parts of the service sector due to the rising number of COVID-19 cases in late autumn.

On the other hand – and perhaps due to the increase in cases – public consumption resumed, as it was again necessary to intensify efforts against the COVID-19 pandemic.


Euroclear Finland is Finland’s CSD, connecting issuers, investors and financial intermediaries with safe, secure and efficient issuance, settlement and asset services. By keeping a digital ownership register, it gives clients reliable, real-time information about their assets. Euroclear Finland claims to have over 1.4 million digital book entry accounts and that its issuance and settlement system is TARGET2-Securities and CSDR compliant.

Finnish assets have felt pressure lately, but increased Finnish country risk explains only part of the move, Jan von Erich and Antti Koskivuo write in a recent article on business research site Nordea. . Finland’s economic ties with Russia are greater than for the eurozone as a whole, but energy dependence is not.

Finland’s political security landscape has changed, with the majority of Finns now supporting NATO membership. Finnish bonds underperformed versus France, which also suggests Finnish country risk has increased to some extent, von Erich and Koskivuo say.

“While Finnish assets could easily face more pressure in the future, especially as tensions in the Russian war continue, any collapse of Finnish assets is certainly not our baseline,” write -they. “We also note that, as there has recently been a focus on including Russian energy exports in the sanctions, Finland is unlikely to be among the most affected countries in the euro zone, if such measures are introduced.”

Nordea analysts Dane Cekov, Kjetil Olsen and Lars Mouland said: “The domestic economy fared much better than Norges Bank expected in December, when Omicron dimmed the outlook.

“Registered unemployment stood at 2.1% at the end of February, a year earlier than expected by the Norges Bank. The unemployment rate will continue to decline and the labor market will become even tighter, supporting higher wage growth and underlying inflation ahead.

“Core and headline inflation has been consistently above Norges Bank forecasts over the past three months. Core inflation exceeded the 2% target in February – a year earlier than expected – and is expected to rise further in the month ahead.

“Given global price pressure, rising energy prices and the tight labor market in Norway, inflation expectations and demands for wage growth have risen hand in hand. Yet with wage growth approaching 4%, as the team now expects, purchasing power will rise more than Norges Bank assumed in December, even if headline inflation is higher. . Higher real wage growth will continue to support private consumption and future economic growth,” add Cekov, Olsen and Mouland.

“Above-target underlying inflation and a positive output gap justify interest rates rising above a normal level that Norges Bank has estimated to be just below 2%,” they conclude.

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