Customer needs and internal efficiency gains will give cross-border issuance a strong future, predicts Global Head of Investment Solutions FICC Heikki Ruoppa from Danske Bank.

Customer needs and internal efficiency gains will give cross-border issuance a strong future, predicts Global Head of Investment Solutions FICC Heikki Ruoppa from Danske Bank. In 2017, Danske Bank issued in EUR several times in Denmark in order to reach retail investors outside Denmark, and the bank is now a firm believer in cross-border issuance.

Since 2017, Danske Bank has issued all structured products in EUR towards customers at one CSD, VP SECURITIES. Instead of local CSDs in each market, Danske Bank is now turning to its usual CSD partner in Denmark and undertaking cross-border issuance in the very same set-up as for issuance in DKK. Heikki Ruoppa is in charge of structured products at Danske Bank and leads three teams in Copenhagen, Stockholm and Helsinki, respectively. In this interview, he outlines the drivers and perspectives regarding cross-border issuance.

Q: What do you see as the key drivers, when it comes to cross-border issuance?

Heikki: There is a clear trend for issuance to become significantly more tailormade compared to earlier. We are adapting products more to customer needs, and our customers want to be able to choose. There is also a trend for issued amounts to decrease, and while the total issued amount is quite unchanged, the number of transactions is increasing. To be cost efficient while meeting these customer needs, we need to be faster, and have greater automation and more simplified processes. Cross border issuance fits nicely into this picture, as it allows us to use the same CSD and the same process for issuance in DKK, EUR and SEK, and hopefully also NOK in the future. I think this trend for growth in the number of issuances and their decreasing size will continue in the future. To me, it is evident that cross-border issuance will be a key benefit for us and for the market, as it will pave the way for automation and simplified processes.

Q: Is it fair to connect cross-border issuance with harmonisation on a greater scale?

Heikki: Definitely. Harmonisation in the Nordics will happen, and as a Nordic bank we are obviously looking for ways to streamline our offerings and operations. If we are able to handle all currencies in one and the same process, we will become faster and more responsive to customer needs, while at the same time increasing cost efficiency. Of course, we also need to have the same advice for our customers on, for example, buying or selling positions in Mærsk, regardless of whether the advisory team is located in Helsinki or Copenhagen.

Harmonisation, standardisation and regulation have come to stay, and will not go away. By streamlining issuance in all relevant currencies into one process, we are also making life easier in terms of compliance with MiFID and adaptation to T2S.

“Our rough calculations tell us that we will be able to save 70-75 per cent of the costs compared to having four different operations running in four different ways in Denmark, Norway, Sweden and Finland. But the key concern here is for us to give the customers the benefit of speed and low risk,” says Global Head of Investment Solutions FICC Heikki Ruoppa from Danske Bank in a comment on the role as first mover in cross-border issuance.

Q: You are among the first movers for cross-border issuance. Did you encounter any barriers?

Heikki: I think there is a lot of tradition in the way we think about issuance, and we will have to leave that behind. For example, we met some anxiety as to whether Swedish and Finnish investors would react negatively to Danish ISINs, and this proved to be just old habit talking. What did the customers say? Nothing. The customers buy in if the product is right and positioned right, and the ISIN is not relevant. We are selling the product, not the ISIN. In the long run, these mental barriers will disappear, and I expect more banks to start using cross-border issuance. This will eventually also be a long-term advantage for Danske Bank, as it will support standardisation and a centralised system approach, and we will need that in order to stay competitive on a global scale.

Q: What are the central business benefits from cross-border issuance for Danske Bank?

Heikki: Having one process for issuance in all currencies in central bank money is a strong position if you want to speed up a placement process. Ten years ago, the processing time was around ten days. For some of the other local Nordic markets it is around five days, and with VP we have brought it down to two hours. Is this good enough, you can ask, and no, I know that in the near future we expect to be able to issue instantly and in a fully automated process with VP SECURITIES. The key for us is the ability to meet the customers’ demands and to serve our customers.

Our rough calculations tell us that we will be able to harvest direct cost savings of 70-75 per cent. The biggest cost saver, however, concerns our internal processing, and in future we will be able to reduce the number of processes from four to only one – and that really makes a difference!

Q: How do you see this developing in the years to come?

Heikki: At Danske Bank we set high standards and it’s my belief that the same applies to VP SECURITIES. They are the ones who are challenging and seeking to change the existing Nordic market infrastructures, for the benefit of our customers. It’s therefore my hope that our colleagues from the other Nordic banks will also be able to support this development. If that happens, my prediction is that VP SECURITES would also be able to support issuances in USD, GBP and JPY.

For more information:

Contact Senior Relationship Manager Henrik Høj or Customer & Relations Director Henrik Ohlsen.

Euronext is proud to announce that IPOready will now be Euronext’s unique pan-European business educational pre-IPO programme. IPOready aims to support European companies considering a listing on Euronext in the coming years. IPOready will combine and replace Euronext’s successful legacy TechShare, GoPublic, IPOready, and FamilyShare programmes into one single comprehensive pre-IPO programme for businesses ready to take the next step towards financing their growth journey.

Our 6-month educational programme is designed to provide executives with the tools and insights they need to achieve IPO readiness and success while focusing on building a strong European community of alumni to provide ongoing support and guidance between peers.

Building on a Successful Pre-IPO Programmes Track Record

Euronext’s pre-IPO programmes have a proven track record, having already trained over 920 high profile companies since 2015, including close to 30 companies that went public on Euronext following their participation. Euronext’s global pre-IPO campus has become a flagship event for our legacy TechShare, IPOready, Go Public and FamilyShare programmes’ participants and partners, with over 200 of them joining from across Europe every year. Euronext’s pre-IPO programmes count with the support of 90 partners and sponsors from the financial industry.

Since 2018, our programmes have expanded to new geographies adapting to local specificities and macroeconomic trends. Indeed over the last few years, Euronext welcomed within its pre-IPO programmes companies originally from around 10 countries, from the 7 markets where Euronext operates, the Netherlands, Belgium, Ireland, Portugal, Italy Norway, France, but also from Spain, Central Eastern Europe and the Nordic region.

IPOready, the unique pan-European pre-IPO programme for companies willing to getting prepared for a potential future IPO on Euronext markets

With IPOready now unifying its legacy pre-IPO programmes, Euronext provides a comprehensive and unified approach enriched by the diversity of companies selected from all sectors. One of the key benefits of IPOready is its ability to attract a diverse set of participants from traditional industries to cutting-edge technology companies. This unification reflects our commitment to creating a unified, European and global dynamic community for participants, helping to foster a thriving entrepreneurial ecosystem that can drive innovation, growth and prosperity. IPOready provides participants with access to Euronext's vast ecosystem, networking opportunities with other entrepreneurs, and exposure to potential investors. Euronext develops with IPOready an alumni network, provides former participants with follow-up and mentorship until their potential IPO, and maintain the relationship with Euronext with for example the Euronext Tech Leaders initiative.

A distinguishing feature of Euronext’s pre-IPO programme has been its strong ESG expertise historically provided to its pre-IPO alumni. While investors are increasingly demanding regarding ESG features of equity stories during the IPO process and after, Euronext is leader in ESG and in accompanying companies building strong ESG stories while carrying out their IPOs. ESG is to further become a core element of IPOready, with all participants to be trained on the main ESG dimensions for preparing a successful IPO and the opportunity to dive deeper on ESG topics with dedicated sessions.  

Euronext Securities is currently deploying three “Italian crafted” dashboards that will equip clients with a detailed overview of their settlement efficiency and penalty data in real time. These dashboards are just the first in a series of data-based initiatives created by Euronext Securities Milan that will help clients across all Euronext CSDs gain actionable insights to unlock the full potential of their post-trade activities.

Pooling expertise for the benefit of Euronext Securities’ clients everywhere

From Porto to Oslo, Euronext’s network of Central Securities Depositories (CSDs) have a long history of data mining. Even prior to the creation of Euronext Securities, each CSD worked with its respective clients to unlock their data’s potential, and create value-adding services that solved their problems. Now, by uniting the efforts of the individual CSDs, Euronext Securities can offer clients a common dashboard across all markets.

We are expanding the common data lake technology for all Euronext CSDs, to present data in an interactive dashboard, which clients can use to monitor and understand their post-trade operations. The interface is the same across CSDs, and each CSD’s data is stored separately, so as to avoid overlapping information between CSDs,

Explains Christian Alexander Viken, Head of Data & Analytics at Euronext Securities. “By giving our clients a common way to access their data, they can have a uniform experience wherever they do business with us, be it in Italy, Denmark, Norway or Portugal, and access their data from a single dashboard.”

Putting settlement data at clients’ fingertips

The first dashboard to be rolled out to all CSD clients is the Settlement Efficiency dashboard, an area that has been a hot topic across Europe in recent years. “Our aim with the settlement dashboard is to address our clients’ specific needs,” explains Giovanni Costantini, Senior Sales and Relationship Manager at Euronext Securities Milan. “We want to give them the information that will help them identify improvement areas in their settlement process and then give them the tools to make these improvements.” Clients can see information regarding their assets under custody, the split between asset classes and their ranking and market share within the CSD. If they are also clients in other Euronext CSDs, they can see the same information in the same format for each CSD where they do business.

Keeping an eye on penalties

With the introduction of the CSDR penalty regime in the Spring of 2022, penalty-related data has also been an area of interest for issuers and financial institutions. The new Penalty Dashboard will help clients to both monitor their own performance in this area and benchmark it against the market. “Using the dashboard, clients can identify settlement issues based on single ISINs, operations or operating days. They can also measure operational efficiency and identify areas for potential savings,” says Fernando Gilardi, Head of Data Analytics & Data Strategy - Product Development at Euronext Securities Milan.

Using data to ensure and optimise liquidity

Liquidity is another area of interest for financial institutions. Euronext Securities’ new Liquidity Dashboard service – currently in the prototype phase – will offer clients unprecedented insight into their current and future liquidity needs. “This dashboard allows clients to predict their liquidity, so they can apply post-trade services more effectively,” explains Enrico Papalini,

Head of Software Development and Analysis at Euronext Securities Milan.

Clients can easily integrate liquidity information into their accounting and treasury systems. Using this real-time information, they can also reconcile cash positions, optimise their liquidity and improve their collateral management. The dashboard also enables clients to take proactive decisions, based on its predictive modelling.

Our clients need to monitor their liquidity position, particularly intraday positions. At the same time, they need to understand their liquidity needs for the days to come. We want to provide them with a dashboard that both informs them about their liquidity position at any given point in time, and that also can help them to anticipate their future liquidity needs,

Giovanni Costantini says.

Partnership with leading data science university fuels innovation

To make this form of predictive forecasting possible, the Euronext Securities data services team uses predictive models based on machine learning and artificial intelligence. They benefit from the company’s long-standing partnership with the University of Milan, an institution renowned for its data science department. “Every year we host a data lab, where we have  student interns from the university’s Data Science Department join our data science team. They work together with our in-house data scientists to produce models that can forecast liquidity needs using AI and machine learning algorithms.”

Even though clients will be viewing predictive models, they can rely on an accurate forecast estimate of available liquidity. Enrico Papalini explains why. “Thanks to the technical infrastructure we have put in place, we can launch an enormous amount of training models simultaneously, analysing and choosing those that work best and that allow us to give more accurate information to our clients, even in the dynamic market environment we have experienced in recent years.”

The dashboard also clearly indicates the difference between the real-time, current market data and the predictive or synthetic data, so clients can distinguish between the actual and forecast liquidity models.

Next step: improving the client experience

The Settlement Efficiency and Penalty dashboards are currently in the prototype phase in Euronext Securities Copenhagen, with Euronext Securities Oslo and Porto to follow. Implementation of the data lake in Euronext Securities Oslo will begin later this year, with the goal of launching the dashboards in late 2024. Similarly, the Liquidity Dashboard will be introduced in a prototype phase to select clients in Euronext Securities Copenhagen, with the other markets to follow over the next year.

Development is also underway for a dashboard collecting data from Euronext Securities’ CRM platform. “Our plan is to integrate our data pool with the data we collect during the different client support phases,” says Fernando Gilardi “Currently, our CRM system gathers information on the queries we get from clients, and we want to create a dashboard that will display these questions and show key parameters that can give our clients more insight into common issues and their resolution.”

During the 2023 AGM (annual general meetings) season, Euronext Securities supported over 425 AGMs ensuring the smooth conduct of the events and providing exceptional shareholder engagement regardless of the format of the meeting (traditional in-person, virtual or hybrid.) Now that the 2023 annual general meeting (AGM) season has ended, our experts look back at the season and see what this year’s experiences tell us about the future of the physical AGM.

Will virtual AGMs win the day?

Bjørn Stendorph Crepaz, Head of Issuance & Issuer Services Euronext Securities, believes there are two basic factors that speak in favour of virtual AGMs, or VGMs (Virtual General Meeting).

The main advantage we hear when it comes to choosing a hybrid or fully virtual solution is accessibility. All investors, regardless of their location or circumstances, have an equal opportunity to attend and participate in the meeting. That is also the explanation that companies, who opted for a VGM this year, gave. And it makes sense that this would be a compelling argument for large companies with an international shareholder base.

There are other factors related to trends in share ownership. “Something else that will have a bearing on how AGMs develop in the future is the demographic shift in share owners. If, as some industry experts believe, the average age of share owners continues to fall, so that we see younger, more tech-savvy generations becoming active investors in the stock market, then we can imagine that this development will further accelerate the push towards fully virtual meetings,” Bjørn Stendorph Crepaz says.

Physical AGMs and the local investor

Whether or not companies opt for a physical AGM also has a lot to do with the company- and local culture. “Many companies still use the AGM as a marketing and branding opportunity,” Marianne Benedict explains. “In Denmark, for example, it’s a part of fostering a strong local investor culture, and is a way for smaller investors to show their commitment to and engagement with the companies they invest in.” For these companies, there is still a feeling that virtual solutions lack the personal feel of the in-person AGM. “It can be difficult to replicate the feeling of a community celebration on a digital platform,” she says.

Hybrid AGMs – the best of both worlds?

Which brings us to the solution that Euronext Securities’ experts highlighted as the way forward at the end of last year’s AGM season: a hybrid solution. “The hybrid model is ideal in that it allows companies and investors flexibility,” says Marianne Benedict, Head of Issuer Services at Euronext Securities Copenhagen. “For professional investors who might have several AGMs to attend during a season, it makes it possible for them to attend more meetings even if they are spread out over a wide geographic area, because they have the option of attending virtually. And companies can maintain the close connection with their local investors who choose to attend in person.

Based on our experience, the only definite conclusion we can draw, according to Marianne Benedict, is that it’s still early days after the pandemic. “What’s clear after this year’s AGM season is that we’re still in a transition phase,” she says. “Pandemic restrictions are behind us, but we still haven’t defined what form the post-pandemic AGM will take.”

According to Pierre-Edouard Borderie, Head of Euronext Corporate Services, a subsidiary of the Euronext Group “companies tend to move more and more towards hybrid and virtual AGMs. In 2022 more than 35 companies chose Company Webcast webinar solution, to broadcast their AGM. This year, already 44 companies have broadcasted their AGM via Company Webcast.”

In Italy, Euronext Securities is a new player, having entered the marketplace just over a year ago with its value-added solution for managing the full lifecycle of general meetings. As Simone Canova, Business Development Manager, Issuers – Euronext Securities Milan explains, the pandemic pushed companies to adopt more flexible options in managing their AGMs and this triggered the government to regulate these options. A temporary pandemic regulation was created, (and has recently been extended to the 2023 AGM season), to allow companies to appoint a Designated Shareholder Representative, thus providing a mechanism for shareholders to be represented and have their voices and votes counted even if absent from the general meeting. This has created a unique opportunity in Italy, where Euronext Securities can be entrusted to act as an intermediary between the company and its shareholders, expanding its duties to include proxy voting, ensuring compliance with regulatory requirements, and providing expert guidance on corporate governance matters to guarantee transparency and integrity throughout the entire process.

Full GM support – regardless of the format

Euronext Corporate Services recommends that issuers acquire the most accurate mapping of their shareholders prior to the general meeting. This exercise aims to identify who will be present at the AGM, what will be the topics of interest and what voting results can be anticipated.

Whether the 2024 season brings a marked increase in physical meetings, virtual or hybrid, Euronext Securities’ Investor Services team is ready to provide clients with the necessary support.

We’ve worked closely with our clients both before, during and after the pandemic to create flexible AGM services that can be tailored to their specific needs, whether they’re opting for a physical, virtual or hybrid solution,” Marianne Benedict says. “So, whichever format they choose for next year’s AGM season, we’ll be ready.

To learn more about Euronext Securities’ general meeting services, contact your local team [1]

To learn further about Shareholder Analysis, Euronext Corporate Services’ shareholder identification tool please visit the website:

Analyse your shareholding structure with Shareholder Analysis (euronext.com)

Your local team contact