VP Securities is launching a new functionality that will collect shareholder disclosure information on behalf of issuers.

With this service, issuers will be able to use VP as a collector, which will greatly simplify the process of gathering shareholder information. The new service is expected to be launched in time for the Annual General Meeting season.

In September 2020, the Shareholder Rights Directive’s (SRD II) rules on shareholder identification and voting went into force. This means that listed companies now have the right to identify their shareholders and request intermediaries to provide relevant information about a company’s shareholders.

New directive replaces manual process

The current process of requesting and receiving this information is far from straightforward. “Today, each custody bank has to be contacted individually, which makes gathering shareholder information a time-consuming and manual process,” Helen Sørensen, Product Manager at VP explains. SRD II, however, stipulates that the data will be sent using straight through processing (STP), which enables VP to step in and offer a simpler and more efficient method of getting shareholder information on behalf of issuers.

The Collector solution

VP has developed a Collector solution, where VP collects the investor information from the custodial banks, gathers it into a comprehensive report and delivers that information to the requesting issuer. The solution is available to all companies that have issued and registered their shares with VP.



“As an issuer CSD, we’re able to use the technological infrastructure that SRD II has put in place,” says Helen Sørensen. “By using internationally recognized communication standards, we can bypass the manual work typically associated with gathering this information. We’re also used to handling personal data and already have methods in place for securely processing confidential information. So, it makes sense that we can, as a neutral party, collect this information and provide it to our customers in a report.”

Launch in Q1 2021

The new functionality will be available by the end of Q1, in time for the Annual General Meeting season. “We realise that this is where our customers will be most interested in using this type of service to identify their shareholders.” And according to Helen Sørensen, there is already considerable interest around this new functionality. “We’ve seen a great deal of interest from the companies that issue with us, and we already have a test customer lined up.”

A service with great potential

Concurrently, VP is working with the other Euronext CSDs to explore developing a pan-European solution that would be available to issuers in all of Euronext’s markets. VP is also looking into how to improve the usability of the shareholder information report. “Once we’ve gathered all of the shareholder information, the resulting report could be quite large in size. So, we’re exploring ways we could improve the readability of the report, perhaps by producing a summary or other high-level document,” Helen Sørensen says. There are a number of possibilities to improve and expand the service, once its implemented, and this helps to underscore the potential of applying technological innovation to fulfil a regulatory requirement. “I think this is a good example of how we can use our technical know-how to help issuers benefit from new legislation,” she concludes.

Fact box: About SRD II

In April 2019, the Danish Parliament adopted the amendments to the Shareholder Rights Directive, known collectively as SRD II. The purpose of these amendments is to stimulate shareholders’ long-term engagement, increase transparency in the voting process both in relation to proxy voting and shareholder identification and to improve the issuer-investor dialogue. 

One of the ways SRD II increases transparency related to an issuer’s shareholder base is by establishing a standardized process for a collector to gather shareholder responses from intermediaries holding that information.

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Contact

Helen Sørensen

Product Manager

Phone: +45 2969 2802

Email:  HSorensen@euronext.com

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Henrik Ohlsen

Customer Relations & Sales Director

Phone: +45 2910 1202

Email:  HOhlsen@euronext.com

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We are rapidly approaching the 2021 AGM season and, in the same way as in 2020, companies need to navigate the planning process, while taking the Covid-19 restrictions into consideration. Only relatively few Danish companies tried out the partly or fully virtual AGM format in 2020, but with the current restrictions on in-person gatherings that will be a necessity in 2021, and many questions will arise.

The VP technical solution for the virtual AGM is in place

VP has developed a well-functioning solution that can facilitate both the fully and the partly virtual AGM – and ensure that it is easy for shareholders to engage and exercise their shareholder rights online.

The solution in brief:

• Via the platform it is possible to:
  • Participate via PC, tablet or smartphone, typically by logging in using NemID
  • Watch the AGM as a livestream
  • Ask questions/make comments via the messaging feature
  • Vote online
  • Present shareholder proposals via the livestream or a pre-produced video at the AGM
  • Send information from the company to participants during the AGM
• Just before and during the AGM, VP sets up a hotline to guide shareholders with questions or problems concerning their online participation.

Approval of new regulation facilitating virtual AGMs.

At the end of December 2020, the Danish government approved an amendment to the Danish Companies Act which extends the authority granted earlier in 2020 to deviate from provisions in companies’ articles of association requiring that general meetings be held as physical meetings. The amendment gives a company’s management the option, without authority under the company's articles of association, to hold a fully or a partly virtual general meeting, and it will apply until 31 December 2021.

Link to the Act (in Danish)

Information to shareholders and careful planning are key

The partly or fully AGM set-up makes new demands of everyone involved in the planning and holding of the AGM.

On drafting the exact wording of the notice convening the AGM in 2021, companies should ensure that as much as possible is done to keep shareholders informed of how the AGM will be conducted, how they can participate and vote and, in particular, how they can ask questions, and how and when those questions will be answered.

Companies might also consider establishing a dedicated area of the website for ongoing information about the AGM and/or establishing a dedicated email service to allow shareholders to ask questions about the meeting.

Prior to holding the AGM, a trial run is recommended, to make sure that the electronic system functions well and that the parties involved know exactly how to go through and handle the individual processes during the meeting.

In addition to the purely technical issues, the individual company, and also the chair, must be aware that the partly or fully virtual format naturally presents a new framework for how the AGM is conducted, compared to the normal physical meeting. It is important to think virtual from the outset and adapt to the new media. For example, it is important that the management’s report and the accompanying presentation are adapted to the new format and that the technical format and the handling and approach of the management and chairman, including the handling of the debate, support shareholder democracy and involvement.



Please do not hesitate to contact us if you have any questions regarding the planning of the AGM or you would like to receive further information on our solution for the partly or fully virtual AGM.

See previous articles on annual general meetings.

The 2021 AGM season - Time to consider opportunities for change

Tivoli successfully jump starts the new SRD II process for convening general meetings

Towards a more flexible and shareholder-friendly approach to AGMs

Contact

Investor Services

Opening hours: 9:00 - 16:00 CET

Phone: +45 4358 8866

Email:  vp_vpinvestor@euronext.com

Please do not hesitate to contact us if you have any questions...

- Investor Services, Opening hours: 9:00 - 16:00 CET

In the fourth quarter of 2020, VP Securities sent out its annual customer satisfaction survey. The results show improvements in satisfaction across the board, and positive trends in several key areas.

Customer satisfaction on level with benchmark

One of the most standout survey results is overall customer satisfaction, which increased by 2-index points to a score of 74, and is on level with the industry benchmark of 73. The survey also revealed positive trends in the individual business areas. The CSD business area experienced a 6-point increase in satisfaction (73) when compared with 2019, and Investor Services had a satisfaction score of 81.



Other positive developments include a 5-point increase in decision makers’ satisfaction levels, an increase in the overall perception of VP’s image and an improved perception of VP’s value for money. CSD Services again excelled in this last area, with an 8-point increase in perceived value of money amongst decision makers.

The overall customer satisfaction, increased by 2-index points to a score of 74, and is on level with the industry benchmark of 73.

Satisfaction with VP employees on the rise

Another encouraging trend was the increase in customer satisfaction with VP employees. Employee performance is the most important driver for customer satisfaction, so the fact that the survey revealed an upward trend in all three survey questions related to customers’ perception of the value VP’s employees provide is a positive development. General satisfaction with VPs products and services improved as well.

Heightened focus on crisis communication

Survey responses also highlighted areas for improvement. One area in particular is operational communication, especially in cases of incidents and issues. To ensure prompt, clear crisis communication with the market, VP has established a new Customer Crisis Management Group. Formed in December 2020, this group is an additional measure that VP can activate when it needs to establish more nuanced communication with the market. The group’s purpose is to ensure a close dialogue with the market when complex situations arise.

Results show internal efforts are bearing fruit

When commenting on the survey results, Henrik Ohlsen, Customer Relations and Sales Director at VP, stated 

Looking back, we can see that the market has been influenced by several large projects and implementations, which have impacted our customers’ processes and ways of working. These developments have also negatively impacted satisfaction. We’ve taken steps to ensure operational stability and launched a number of internal product and service initiatives in order to reverse this downward trend. It’s gratifying to see that our efforts have paid off and that our customers are now more satisfied. Of course, we realise that we’re not finished. This is an on-going journey, and we will continue to work closely with our customers to continue to meet, and hopefully surpass, their expectations.

About the survey

VP Securities conducted the customer satisfaction survey during the period of 19 October to 4 November 2020. The survey was primarily email-based, combined with 20 interviews of key stakeholders and decision makers from Tier 1 clients. The survey focuses on VP as a whole, and the CSD and Issuer Services business areas. The overall survey response rate was 29%.

Contact

Henrik Ohlsen

Customer Relations & Sales Director

Phone: +45 2910 1202

Email:  HOhlsen@euronext.com

It is all about simplicity for our customers and thereby more efficient processes

- Henrik Ohlsen, Customer Relations & Sales Director

Euronext Securities Porto has decided to change the fee book to be applied to the services provided to Financial Intermediaries and to the Issuers, assuming as main objective the promotion and development of the Portuguese capital market, while aligning the quality of some specific services to the price charged.

Euronext Securities Porto intends with the amendment of its price lists:

Issuer Entities:

• Encourage the growth and development of the stock market, by reducing share maintenance fees by 6%;
• Support the growth and new trends in the distribution of Funds through a 6% reduction in maintenance fees applied to fund units. It was also decided, with the same purpose, to reduce the fee for registration and cancellation of fund units registered in the Centralised System, from a decreasing scale with discounts based on the number of registration and cancellation requests processed each year, to a single fee, regardless of the number of registrations and cancellations made in the year;
• Defend and protect the Warrants and Certificates market by reducing the registration and cancellation fee for the first 2,000 of these financial instruments registered;
• To bring the prices charged to Issuers for holders’ identification into line with the expenses incurred for updating this service in September 2020 and September 2021, as well as with international practices regarding the structure of charges for this type of service. Thus, the fee based on the Issuer’s share capital was changed to a structure intended to cover the charges and costs of this service, based on a fixed price per request for identification of holders, plus a charge per holder identified, with a maximum limit for the holders identified per request;
• Encouraging the automation of the notification of General Meetings, a service provided to the market since September 2020, charging a lower price if the notification is sent by the issuer through Interbolsa’s portal;
• To encourage subscription and redemption operations of funds units and ETFs using the order routing facility, the commission per subscription and redemption operation requested from Euronext Securities Porto carried out by means other than order routing, which require manual procedures from the operational team, was increased. The possibility of charging this commission to the depositary entity involved in the operation was also excluded, thus limiting the collection of the commission due to Euronext Securities Porto to the fund itself and to the fund or ETF management entity.

The following commissions were also adjusted:

• Commission for the cancellation of subscription transactions before the payment date, and the cancellation of subscription transactions after the payment date;
• Commission applied to settlement of primary market and other operations;
• Respond to the market’s request to charge the fees applied to some corporate events directly to the Issuer Entities and not to the Paying Agent of the event in question, as occurs in the pricing model currently in force.

Issuers Entities and Financial Intermediaries:

• Maintenance fees will be charged to Issuer Entities and Financial Intermediaries, for conversion rights assigned to the State, constituted pursuant to Law no. 61/2014 of 26 August (Special regime applicable to deferred tax assets), which are exempt from maintenance fees in the Price List in force. The exemption of maintenance commission was maintained for rights resulting from the exercise of corporate events processed through the centralised securities system.
• Update all fee collection procedures from the 8th of the month following the provision of the service to the 15th of the following month. With this amendment, the intention is to give shape, as of now, to compliance with the “AMI-SeCo Standards for Billing Processes” which are part of the “Single Collateral Management Rulebook for Europe (SCoRE)”.

Financial Intermediaries:

• Following the information received from the supplier of the communication lines that allow the connection to the Euronext Securities Porto systems, that it no longer provides ADSL lines, the price of optic fibre backup lines was updated.
• Interbolsa made the General Meetings notification service available to the market in September 2020 (and, since September 2021, the respective SWIFT 20022 messages), having subsequently set the price of this service.
• The fee to be charged, to the Financial Intermediaries participating in the systems of this management entity, per SWIFT FIN PLUS message sent by Euronext Securities Porto for identification of holders and notification of General Meetings was established. Euronext Securities Porto made available to its participants a Closed User Group (CUG) opened at SWIFT for this purpose, which allows participants that join this group to be invoiced directly by SWIFT, thus obtaining the prices SWIFT charges to each participant, which in most cases are more advantageous. However, some customers decided not to join the CUG and requested Euronext Securities Porto to receive SWIFT FIN PLUS messages.

The fee Books were updated to reflect the new brand of Interbolsa – Sociedade Gestora de Sistemas de Liquidação e de Sistemas Centralizados de Valores Mobiliários, S.A. – Euronext Securities Porto.

Visit Euronext Securities Porto Fee Book

Euronext Securities Porto is pleased to inform its clients of the forthcoming implementation of the Eurosystem Collateral Management System (ECMS) and the associated SCoRE standards, in addition to a new Corporate Actions platform.

This implementation will meet clients’ needs for increased compliance with standards and improved efficiency of Corporate Actions processing, modernisation of systems to provide greater flexibility, streamlined delivery and faster time to market, and harmonisation of services for clients across markets.

What is ECMS?

The Eurosystem Collateral Management System (ECMS) is a unified system for managing assets used as collateral in Eurosystem credit operations. Its launch is planned by Eurosystem for November 2023.

Financial intermediaries connected to the Eurosystems (e.g., T2S) will be required to connect to ECMS, which will comply with the SCoRE standards.

What is SCoRE?

As part of its mandate to foster European financial markets integration and promote a truly domestic single market in Europe, the Eurosystem’s Advisory Group on Market Infrastructures for Securities and Collateral (AMI-SeCo) is working towards developing a Single Collateral Management Rulebook for Europe (SCoRE).

SCoRE is a set of standards, which defines common rules for managing collateral. The implementation of these standards aims to reduce fragmentation in the European markets, which arises due to the variety of legacy standards, structural constraints and as a result of complex and diverse market practices.

While the AMI-SeCo identified ten areas where harmonisation is needed, the first set of published standards focus on three topics:

1. Triparty Collateral Management
2. Corporate Actions
3. Billing processes

Currently only Corporate Actions and Billing standards are applicable to Euronext Securities Porto.

Euronext Securities Porto adaptation plans for compliance with the SCoRE standards are available here.

Corporate Actions

The latest version of the SCoRE Corporate Actions Standards can be found on the ECB website. The adaptation plan for SCoRE standards give details of the expected impacts on Corporate Actions compliance and can be found here.

While our analysis of the standards, their impacts and the best method of implementation is still ongoing, Euronext Securities Porto can already foresee many of the changes that will result from their adoption. A non-exhaustive list of the expected changes has been drawn up for Fixed Income securities and is provided in the table below.

• Implementation of additional Corporate Action event types and events with options.
• Alignment of the cash and securities payments.
• Implementation of reversals.
• Notification in case of delays in execution of a Corporate Action.
• Ensure availability of the default option for the new CA events with options.
• Expansion the use of blocking of securities for the new elective CA events.
• Availability of the full set of the ISO 20022 Corporate Actions messages for clients, complying with standards.
• Enhancement of business processes, workflows and key data with the implementation of ISO 20022 messages.
• Alignment with the standard for securities that follow the “Modified Following business day” convention.

New Corporate Actions platform

Euronext Securities Porto will take advantage of the implementation of ECMS and the SCoRE standards to implement a new Corporate Actions platform. This will increase the efficiency and modernise the processing of Corporate Actions, while complying with the new SCoRE standards.

The new Corporate Actions platform will be implemented first for the Fixed Income securities. The schedule for this implementation is expected to align with the milestones identified in the high-level timetable for the implementation of the ECMS platform, with expected production go-live in November 2023.

Management of Corporate Actions for all other asset classes will migrate to this new platform after the go-live of the ECMS in Production. A dedicated implementation plan and milestones for these asset classes will be communicated in due course.

Following the migration of Fixed Income securities to the new Corporate Actions platform, the existing platforms will run in parallel to continue providing services for all other asset classes.

Billing

The AMI-SeCo validated the content of the SCoRE Billing Standards in June 2021. The final version of the standards can be found on the ECB website.

Euronext Securities Porto expects to comply with the standards for the ECMS deadline.

The adaptation plan for the SCoRE standards includes the expected impacts for Billing compliance and can be found here.

Impacts of compliance with the SCoRE billing standards is expected to have minute impact for clients. The details of the ISO 20022 messages and any other applicable changes will be communicated, if applicable, in due course.

Impact on clients and further information

Euronext Securities Porto is currently completing its impact analysis and project definition to ensure the best possible solution for its clients.

As some of the details of the standards are still the subject of consultation and feedback, we are actively participating in the discussions with the various groups. This is to ensure that the compliance with the standards and associated timetable meet the needs of our clients, and that we can manage the impact of the time required for these discussions on our compliance implementation and overall roadmap.

More detailed information regarding client impact and timetables will be provided at a later date.

Key milestones

This project aims to meet the main milestones listed in the table below, which align with the high-level timetable for the implementation of the ECMS platform.

More details on the timetable will be provided in future communications.

Within the scope of the Shareholders Rights Directive II – Directive (EC) 2017/828, of May 17, 2017), INTERBOLSA implemented, on September 6, 2021, the ISO 20022 messages for the identification of beneficial holders and for the notification of General Meetings, as well as the identification of beneficial holders with record date in the past (up to 1 year).

Changes to INTERBOLSA Regulation No. 2/2016, introduced by INTERBOLSA Regulation No. 1/2021, can be consulted through the following LINK.

INTERBOLSA obtained on October 28, 2019 the certification on the full compliance with ISO 27001:2013 standard requirements, with respect to the Information Security Management System in the following scope:

• Market settlement instructions;

• OTC settlement instructions, including DVP in EURO and FOP instructions.

ISO 27001 is the international standard, of reference, related to Information Security Management Systems composed of a set of requirements that aim to ensure the adequate risk management inherent to information security.

By obtaining this certification, INTERBOLSA reinforces and guarantees:

• The use of best international practices regarding Information Security Management Systems;
• Data protection, confidentiality, integrity and availability;
• An ongoing commitment to data protection and operational risk management.

On December 23, 2020 a recertification was carried out, valid until October 27, 2022.

In 2021, Euronext reinforced its leading position in sustainable finance.

We launched our “Fit for 1.5º”, a climate commitment for us and for our partners and clients, and as of end of year, Euronext is the leading stock exchange in Europe for both the number of issuers with #ESG bonds listed and the outstanding issuance amount of ESG bonds listed on each stock exchange.

In addition to this, we are the leading ESG index provider in Europe for structured products since 2019, and also the leading stock exchange for the listing of green bonds.

This data is based on Euronext's Universal Registration Document which has been published on 11 April 2022.

Reference is made to the consultation on changes to the Euronext Growth Oslo Rule Book Part II and notices, as published on 14 February 2022.  The main and material amendments relate to Euronext Growth Advisors. Oslo Børs has also conducted a complete review of the Euronext Growth Oslo Rule Book Part II in relation to definitions, language, references and clarification of ambiguities. Notice 2.2 is also updated, and notice 2.3 will be replaced with a new notice 2.3 which contains more extensive guidance and information.

The consultation period is now over. There have been made some further adjustments and clarifications as a result of the consultation. The changes in the rules have been resolved by Oslo Børs in accordance with such. The changes will enter into force on 9 May 2022. The updated rule book and notices, and the DD form, EGA Agreement and updated application forms (EGA and admission to trading) are available on Euronext’s websites. Mark-up versions of the documents follow below.