Euronext is introducing a new service that helps customers to comply with internal and external regulations regarding employee trading. This new, pan-European online solution has been developed by Euronext VPS, the Norwegian Central Securities Depository.

Introducing TradeLog

“TradeLog is a new online solution that helps compliance departments monitor employee trading,” explains Nicola Miori, Product Owner at VP Securities. “It can be tailored to the company’s environment and incorporates all of the regulations, internal policies and procedures which govern employees’ trading activity.”



TradeLog includes a fully digital registration process for pre-approval of trades, and automated monitoring and notification of trade violations. The solution is linked to the employee’s account in VP Securities, and it also links directly to the Danish Business Authority (Erhvervsstyrelsen) to retrieve information about listed companies.

Facts

vp.INSIDER vs TradeLog

For VP Securities customers familiar with vp.INSIDER, it’s important to note the key differences between the two services. vp.INSIDER only covers shares issued by the customer in question, whereas TradeLog covers the entire market. Due to vp.INSIDER’s unique structure and focus on compliance with the Market Abuse Regulation, the two services will remain separate for the time being. For vp.INSIDER customers, TradeLog provides an extension to the current trade monitoring services you have at your disposal, enabling you to monitor the full range of your employees’ trading activities.

Using technology to simplify compliance

For VP Securities customers, TradeLog is a significant improvement when compared to the current trade monitoring solution. “Instead of having to manually check trades, our customers will now automatically receive notifications if their employees have violated regulations,” explains Søren Milbregt, Senior Relationship Manager. “With TradeLog, we’ve automated the entire process and centralised it on one platform, from the employee’s initial application to the compliance department’s evaluation and approval, and the ongoing trade monitoring and notifications.”



This automation gives compliance departments several advantages. “It will be a lot easier for compliance departments to see who’s complying with their trading guidelines and regulations,” Søren Milbregt says. “The system moves a lot of the responsibility onto the individual employee, which will also save time on the compliance side.”



TradeLog automatically ensures that consent from the associated employees is obtained and maintained.

Taking a proactive approach to compliance

While TradeLog clearly will make it easier for larger companies to monitor their employees’ trading activity, Søren Milbregt points out that the system offers benefits for companies of all sizes. “Even if you are a small investment company, this solution enables you to take a more structured, transparent approach to enforcing employee trading regulations. There’s considerable focus on insider trading and employee investment practices at the moment. TradeLog is a way for investment companies to take a proactive approach to compliance and put monitoring tools in place before incidents arise.”



There is a future-proofing aspect to the service as well. “We know that more compliance regulations are coming. Financial institutions that already have automated compliance measures in place will have a decided advantage in terms of being able to quickly adapt to new requirements,” Nicola Miori states. “The TradeLog solution is flexible and can be customised to an individual organisation’s internal trading policies, as well as changes to regulatory requirements. With this system in place, financial institutions are in a good position to comply with current and future requirements.”

Read more about TradeLog

Contact

Søren Milbregt

Senior Relationship Manager

Phone: +45 4358 8824

Email:  SMilbregt@euronext.com

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Nicola Miori

Product Owner, Data Services

Email:  NMiori@euronext.com

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What’s the future of negative interest rates? How are green investment strategies impacting Nordic investor behaviour? What impact will SRD II have on Nordic financial institutions? All of these questions have two things in common. One, they all impact the work we do every day. And two, they are all topics covered at recent Market Advisory Group (MAG) meetings.

What’s a MAG?

The Market Advisory Group, or MAG, is a knowledge-sharing forum open to all VP Securities’ customers and stakeholders. There are two to three MAG meetings each year, where attendees can learn and get inspired about and the latest developments and trends in the pan-European CSD market, and hear about the status of VP’s initiatives and strategic projects.



According to Søren Milbregt, Senior Relationship Manager at VP, the MAG is one of many avenues VP has used to maintain an on-going dialogue with its customers. “We had a customer forum for many years,” he relates. “Then, when we obtained our CSDR licence in early 2018, we had to meet new requirements regarding customer communication. This gave us an opportunity to create a series of more focused forums that can address specific areas, where the MAG is the forum we use for sharing updates and knowledge about the post-trade and capital markets.”

 

A focus on knowledge sharing and market insight

The first MAG meeting was held on 27 September 2018. Since that time, VP has held several meetings with more than 20 different presentations. As mentioned at the outset, MAG meetings cover a wide range of topics and have featured guests from the European Central Securities Depositories Association, Denmark’s National Bank (Nationalbanken), the Danish Financial Supervisory Authority and Finance Denmark, as well as many of the leading financial institutions in Scandinavia. “Our goal is to invite a broad selection of senior professionals in the financial markets who can share their knowledge and insights on a more strategic level,” Søren Milbregt says.

 

An opportunity to get a broader perspective

This focus on Nordic and pan-European market trends is also what many attendees appreciate about the MAG meetings. “A lot is happening in the post-trade area. There are many changes and initiatives on the way in terms of harmonisation and globalisation and the Nordic scene is changing,” comments Lasse Larsen, Head of Investor Services at SEB Denmark. “VP is an important piece in that puzzle, because they operate at the intersection between local interests and the global markets. So, these meetings are an effective communications channel VP can use to provide a status on where they stand in relation to all of this change.”



Another MAG meeting participant highlights the value of getting a wider view of the financial markets. “What I appreciate about the most recent MAG meetings, is that VP has done a good job of bringing in a broader perspective, where everything isn’t just about our narrow focus area of post-trade, but the presenters have been able to set things in a larger context that extends beyond our borders.”

 

Adapting to a virtual format

As is the case with many conferences and events over the past year, MAG meetings went virtual in 2020. “We were able to hold two MAG meetings last year, both of which took place virtually,” Søren Milbregt states. “While we’ve had to adjust the format of the meetings a bit to better suit the digital medium, the shift to a virtually hosted event has meant that we’ve had even more participants, and it’s made it easier for our international customers to attend.” The advantages of the digital format mean that it will likely play a role in future MAG meetings as well. “I think we’ll see a hybrid format going forward, where we give attendees the option of participating in-person or virtually.”

 

Save the date: 19 May 2021

The next virtual MAG meeting will take place on 19 May 2021 from 15:00 – 16:00. If you’d like to attend, just get in touch with your VP contact person. We look forward to seeing you there.

Contact

Søren Milbregt

Senior Relationship Manager

Phone: +45 4358 8824

Email:  SMilbregt@euronext.com

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Customer relationship is all about close dialogue and common focus on creating value for both parties

- Søren Milbregt, Senior Relationship Manager

For the second time in three years, Tryg Forsikring chose VP Securities for a Restricted Tier 1 Capital Notes issuance in Swedish krona.

According to Barbara Plucnar Jensen, CFO at Tryg, the desire to reach Scandinavian investors and use an established process were key factors in the company’s decision to issue via VP.

Tryg wanted to refinance their original issuance from May 2016, which has a call in May of this year. They decided on an accelerated plan that would enable them to take advantage of a strong market and finish the refinancing prior to a Rights Issue, launched on 1 March to finance the acquisition of the Scandinavian part of RSA. Thus, in February 2021, Tryg issued SEK 1bn in Restricted Tier 1 Capital Notes via VP Securities with a listing on the Oslo Stock Exchange (Oslo Børs).

Appealing to Scandinavian investors

As Barbara Plucnar Jensen, CFO at Tryg, explains, the company’s increased presence in Sweden was one of the main drivers behind their decision to issue in Swedish krona. “Issuing in Swedish krona makes a lot of sense for us. As a part of our recent acquisition of Trygg-Hansa, we will have a significant Swedish asset on our balance sheet. A large portion of our capital financing is in Swedish krona, hence we’ve issued in this currency before and have benefitted from being in the Swedish market.”



The combination of capital notes issued in Swedish krona and listed on the Norwegian stock exchange is also one that Tryg has had success with in the past, and suits the company’s Scandinavia based investor pool. “The vast majority, 87%, of our investors in this issuance are Swedish,” Barbara Plucnar Jensen says. “The other 13% are located in Denmark and Norway, so they’re all Scandinavian investors, and they don’t really have a preference in terms of which Scandinavian market we issue in. However, our other bonds are listed on the Oslo stock exchange, and it makes sense for us to centralise everything on the same exchange, where we already know the process and prospectus requirements.”



Barbara Plucnar Jensen also adds that keeping the entire process local was a definite advantage.

It makes sense from our point of view to issue in our local markets. We were interested in a Scandinavian issuance in Swedish krona, and we have a good track record with issuing via VP and listing in Oslo, so this was our clear preference.

Barbara Plucnar Jensen, CFO at Tryg

Investor reach and pricing meet expectations

The all-Scandinavian issuance proved to be a success with investors, as the bond was oversubscribed 2.5 times. “We had a terrific result,” relates Barbara Plucnar Jensen. “There’s no doubt that we benefitted from the increased awareness there is around our other transactions, yet to be able to issue a Restricted Tier 1 note through a Scandinavian CSD in these markets was extremely attractive, and that definitely helped our issuance as well.”



In terms of investor reach, Tryg was able to attract a strong representation of Nordic institutional investors. 

We had a really good investor reach. Asset managers account for 80 per cent of our order book, and 15 per cent are pension funds. So, we got a good, solid order book,” says Barbara Plucnar Jensen. Pricing also met the company’s expectations. “We had expected to price between 3Month STIBOR + 250-275bp and we ended with a price of 3Month STIBOR + 240bp, so we were pleased with that outcome as well.

Barbara Plucnar Jensen, CFO at Tryg

The fact that Tryg achieved both the investor reach and price they intended illustrates that their confidence in a Scandinavian approach paid off. “If there had been a huge price difference or if the investor reach had been markedly different, then we could have made the argument to issue elsewhere. But that wasn’t the case,” Barbara Plucnar Jensen states.



Andreas Hammarbro Ligaard, Senior Product Manager at VP, also points out how this issuance makes a strong case for cross-border cooperation. “Tryg’s experience highlights how companies can benefit from handling the entire issuance process, from prospectus development to exchange listing, through Euronext. They can get the same investor reach, competitive pricing and apply the same internal process – whether they’re issuing in Euros or one of the Scandinavian currencies. This is how we can offer the most efficient path to the capital markets, whether your target is Scandinavia or the rest of Europe.”

Latest articles on bond issuance

Danmarks Nationalbank issues green bond on behalf of the Kingdom of Denmark through ES-CPH

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The shortest path to the European markets is through your local CSD

Connecting Tryg Forsikring to Scandinavian investors

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A brief status after the first 20 days of the AGM season: 17 AGMs have been held - all virtual. There are still 127 virtual AGMs to come this season.

Since the approval of new Danish legislation in December 2020 to facilitate virtual AGMs, whereby the company’s management have the option, without requiring further authority under the company’s articles of association, to hold a fully or partly virtual general meeting, VP Securities has seen great interest in the VGM tool.



2021 was the first year of a fully virtual AGM for Ringkjøbing Landbobank, among many others. ”Since this was the first time we held a fully digital AGM, we had scheduled a dress rehearsal with the full set-up. This dress rehearsal gave us in-depth knowledge of VP’s VGM solution and also the opportunity to adjust various small elements before the general meeting itself,” says Chief of Staff, Lars Hindø.



He continues ”Our AGM was held as a fully digital general meeting via the VP VGM solution. The meeting went very well and professionally, and we had good help and assistance from our usual partners, VP Securities and AV Center.”

A few facts about the VGM solution

The VGM platform enables the shareholder to participate via PC, tablet or smartphone, typically by logging in using NemID. The virtual AGM is attended by watching a livestream, where questions can be asked or/and comments made via a messaging feature. If there are any items on the agenda that require voting, the shareholder can do so online. Shareholder proposals can be presented at the AGM via the livestream, or as a pre-recorded video.



Please do not hesitate to contact us if you would like a demonstration of the VGM tool or have any questions.

Contact

Søren Milbregt

Senior Relationship Manager

Phone: +45 4358 8824

Email:  SMilbregt@euronext.com

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Customer relationship is all about close dialogue and common focus on creating value for both parties

- Søren Milbregt, Senior Relationship Manager

VP Securities is pleased to offer our customers a new suite of services from Euronext Corporate Services. Access tailor-made advisory services and innovative solutions that help companies manage investor relations and communication, streamline governance and ensure compliance with market regulations.

When we spoke about the benefits of VP joining the Euronext Group, one of the advantages we discussed was the opportunity to offer our customers a broader portfolio of value-adding services. Euronext Corporate Services is an ideal example of how Danish issuers can leverage the experience and reach of our pan-European organisation to manage their relationships with investors more efficiently.

Henrik Ohlsen, Customer Relations and Sales Director VP Securities

Innovative solutions tailored to the individual customer

Euronext Corporate Services includes a wide range of investor relations, communications, governance and compliance services. These services provide a unique blend of digital tools, coupled with analysis and advisory solutions. “VP has always had a strong technological focus. We’ve long realised that we could use technology to make the issuance and settlement process more efficient, and, in recent years, our focus has been on how we can use technology to help our customers with their internal processes as well,” says Henrik Ohlsen. “Working together with Euronext Corporate Services, we’ll now be able to offer our customers a more advanced technology platform, and supporting services tailored to their specific needs and business requirements.”

We are excited to build on our rapidly developing presence in the Nordics and look forward to investing energy and resources into this important market. Through the team at Euronext Corporate Services, VP customers will have access to an additional 100 expert Euronext employees, specialising in investor relations, communications, governance, compliance and ESG, with a background of servicing over 3,000 customers in more than 25 different countries. That’s a considerable amount of knowledge and expertise that our Danish customers can benefit from. 

Pierre-Edouard Borderie, Head of Euronext Corporate Services

Just in time for AGM season

With social distancing requirements still in place in a number of countries, many of this year’s AGM activities will take place in a virtual environment. In Denmark, for example, the Danish government approved an amendment giving a company’s management the option to hold a fully or partially virtual general meeting, without needing authority under the company’s articles of association. “We’re expecting to facilitate between 100-110 virtual AGMs this year,” Henrik Ohlsen says. “We have the technical platform in place, and with the addition of Euronext Corporate Services, we can offer Danish companies a wide range of investor services to augment their virtual AGM.” For example, companies can employ Company Webcast, a complete webcasting service and reporting platform, to broadcast their virtual AGM.

Download Euronext Corporate Services eBook about virtual AGMs

A growing portfolio of investor services

Euronext Corporate Services is just one of many recent developments that have expanded the portfolio of investor services available to VP customers. “Our new Collector solution, which will also be available for the AGM season, is another example of using technology to help companies meet regulatory requirements,” Henrik Ohlsen says. “With this palette of new services, we are well-positioned to support our customers during the busy AGM season, and beyond.”

For more information about Euronext Corporate Services, please contact Anicet Bloncourt, Sales Director, Euronext Corporate Services:

Phone: +33 1 70 48 27 92

Email:  abloncourt@euronext.com .

Expanded Euronext corporate services portfolio

Euronext Corporate Services can support:

• Identification and analysis of the shareholder base of listed companies
• Investor targeting, and perception studies, to maximise roadshow effectiveness
• Advisory on ESG for corporates
• Webcasts of press conferences, analyst meetings, town halls, and other corporate events
• Hybrid or virtual AGMs
• Compliance with the Market Abuse Regulation and the Whistleblower Directive
• Organisation and streamlining of board meetings (including virtual if required by the conditions)

Read more about Euronext Corporate Services

Contact

Flemming Merring

Senior Product Manager, Issuance Products

Phone: +45 4358 8968

Email:  FMerring@euronext.com

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Søren Milbregt

Senior Relationship Manager

Phone: +45 4358 8824

Email:  SMilbregt@euronext.com

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It’s been almost five years since companies and financial institutions were first able to issue Euro-based bonds through VP Securities. In this article, we look at three compelling reasons why the shortest route to the European markets is through VP.

Reason #1 – Significant investor reach

One of the main concerns that arises when considering using a Danish CSD to issue Euro-denominated bonds is the question of investor reach. In this regard, Danish issuers going through VP have a definite advantage. “We’ve invested in a platform, T2S, that benefits issuers,” Bjørn Crepaz, Head of Issuer Products with VP, explains. “T2S – combined with links to important investor hubs – creates a shared, coherent market infrastructure that gives Danish issuers access to a large, international investor base.”



Experience also shows that international investors are not deterred by securities issued under Danish law. “Our customers have been surprised time and time again that it’s simply not an issue for international investors. In our most recent issuance with Jyske Realkredit, they didn’t get a single question about the Danish ISIN,” says Bjørn Crepaz.

Did you know - Investor reach via T2S

There are currently 21 Central Securities Depositories (CSDs) on the T2S platform and a total of 1,490 banks, plus the 1,600 banks that have accounts at Euroclear Bank and the 1,300 banks with Clearstream Bank Luxembourg. Issuers also reach Tier 2 and 3 investors by issuing via T2S.

Reason #2 – Lower costs and faster processing

Existing VP customers benefit from true Straight-Through-Processing (STP), which provides a quicker path to market than with other banks. Danish issuers can use the same infrastructure and processes they use when issuing bonds in Danish or Swedish kroner, which also adds a degree of certainty and efficiency to the process.



Issuing Euro-denominated bonds through VP also enables issuers to work under Danish legislation. This makes the process simpler, more efficient and cost-effective. “When you have to involve external counsel and advisors specialising in, for instance, UK law, you increase issuance costs by three to five times what you would have to pay with a Danish law prospectus,” comments Bjørn Crepaz. And there is the added benefit of minimised risk, as VP settles using central bank money, as opposed to the commercial bank money used by ICSDs.

Reason #3 – A proven model

Over the past few years, companies and financial institutions have issued Euro-denominated corporate, structured and mortgage bonds through VP. The wide range of bonds and issuers testifies to the flexibility and reliability of the process. “We’ve had the large banks, such as Danske Bank, and mortgage credit institutions, like Nykredit and Jyske Realkredit, and we’ve had corporates such as DSV and Danish Ship Finance,” Bjørn Crepaz states. “These examples demonstrate that whether you raise capital via investment-grade or high-yield bonds, and whether you’re issuing in Euros or one of the Scandinavian currencies, VP can meet your issuance needs.”

Helping fund local economies

Euronext’s main goal with its CSD business is to facilitate the funding of local economies through a smooth, harmonised infrastructure. And in light of the current situation, those funding needs are considerable. “All across Europe, countries have taken measures to tackle the current Covid-19 health crisis. Most states are applying an expansive – and expensive – fiscal policy, which results in big funding needs. Corporations need new funding via bond issuances or capital increases; governments are issuing bonds; and investors, who in many countries are facing negative interest rates, are looking for opportunities to get a return on their excess capital. All these needs can be met through well-functioning capital markets, where investors meet issuers. Our role is to help facilitate this exchange of funds, by creating an efficient issuance process across currencies,” concludes Bjørn Crepaz.

Did you know?

You can use bonds issued through VP as collateral in the ECB’s two collateral programmes: the Correspondent Central Banking Model (CCBM) and the Corporate Sector Purchase Programme (CSPP).

Latest articles on bond issuance

Danmarks Nationalbank issues green bond on behalf of the Kingdom of Denmark through ES-CPH

Jyske Realkredit issues Covered Bonds in EUR with VP Securities

The shortest path to the European markets is through your local CSD

Connecting Tryg Forsikring to Scandinavian investors

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Contact

Bjørn Stendorph Crepaz

Head of Issuance & Issuer Services at Euronext Securities

Phone: +45 2969 2815

Email:  BSCrepaz@euronext.com

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Henrik Høj

Senior Relationship Manager

Phone: +45 4358 8794

Email:  HHoj@euronext.com

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In January of this year, Jyske Realkredit issued its first Euro covered bond (CBD) with VP Securities. In this article, Anders Lund Hansen, Head of Mortgage ALM at Jyske Bank, talks about the decision to issue this bond through VP, and the benefits of using one CSD for all bond issuances.

Jyske Realkredit issued their first mortgage bonds in Euros back in 2016. Since that time, they’ve been active in the international mortgage bond market and, as Anders Lund Hansen explains, they believed the time had come to gather all of their bond issuance activities under one roof. “We’re now an established presence on the international market, and we believed the time was right to handle Euro bond issuance from our own market, using the same resources and processes that we use when we issue bonds in Danish kroner.”

Advantages of issuing through the local CSD

The fact that the VP follows the same issuance process for both Euros and Danish kroner made for a smooth transition process. “Everything was incredibly easy and problem-free,” Anders Lund Hansen says. “We clearly felt that VP was with us every step of the way, which helped us to feel secure with the entire process.”



Issuing Euro-based bonds through a Danish CSD offers a number of benefits. For example, issuers are able to issue based on Danish legislation. “We’re already bond issuers under Danish legislation and under the Danish mortgage system, so the more we can capitalise on that expertise, the better,” Anders Lund Hansen points out. “That makes the entire issuance process smoother and cheaper.” Bringing issuance closer to home makes the process easier to manage as well. “Everything you need is in-house, and when you have the team close to you, it gives you a greater feeling of control – you’re on your home turf, so to speak.”



‘Business as usual’ for European investors

One of the major unknowns was how international investors would react to a Euro-based bond being issued through a Danish CSD. “We have 83 active investors in our issuance, and we haven’t received a single question about the DK ISIN. This shows that this is a fully accepted solution seen from the European markets’ standpoint,” comments Anders Lund Hansen. Jyske Realkredit didn’t address the shift to VP in the prospectus documentation, so Anders Hansen and his team expected to get some queries concerning why they had chosen to go a different route with this issuance. Yet, even on that front, investors were silent. “No one asked why we chose to do things differently or asked for any explanation. It was truly ‘business as usual’, both for us as issuers, but apparently also for investors as well.”

Investor reach proceeded according to plan as well.

When I look in my order book, there’s no difference between this issuance and our previous ones,” Anders Lund Hansen says. “We have the same investors, both large and small, as we would expect to see. If anything, we have a few more investors than usual, which is most likely due to the favourable market conditions we’re seeing at the moment.

Anders Lund Hansen

Subscription period exceeds expectations

As of publication, Jyske Realkredit’s bond is oversubscribed three times (3.6), a fact which Anders Lund Hansen says reflects current market conditions. “It shows that there is a lot of money in the European market at the moment. We got into a positive feedback loop: investors could see that it was going well, and so more investors wanted to come on board. It’s also a testimony to the fact that the process worked well, and there were no difficulties in the investment process due to either Jyske Realkredit or VP.”



According to Anders Lund Hansen, we’re only seeing the beginning of issuing Euro-based bonds under Danish legislation. “I definitely believe that having a complete issuance process under Danish legislation is the way forward. And that’s only possible because VP has created a clear path for us to the European investment market.”

Relevant articles from the archive

VP Securities helps issuers collect shareholder disclosure information

From subscription to exchange How VP supports Danish investment funds

What is driving the increased trading activity

Contact

Søren Milbregt

Senior Relationship Manager

Phone: +45 4358 8824

Email:  SMilbregt@euronext.com

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Customer relationship is all about close dialogue and common focus on creating value for both parties

- Søren Milbregt, Senior Relationship Manager

The upcoming AGM season is the first big test.

On 3 September 2020, the last elements of the amended Shareholder Rights Directive (SRD II) came into force, providing better opportunities for shareholders to exercise their shareholder rights and for issuers to identify their shareholders. Gradually, common, standardised solutions are taking shape across the EU, and shareholders and issuers can take advantage of new communication and information channels. In this article, we give an update on the SRD II implementation.

The three areas covered by the implementation of the remaining elements of SRD II on 3 September 2020 are: companies’ right to identify their shareholders, shareholders’ right to be informed about general meetings and other corporate events, and shareholders’ right to participate and vote.

“We have now come a long way with the implementation of SRD II, but due to complexity, both nationally and across the EU, we have not finished the project yet. However, as we move ahead, we are all getting more insight and experience, and we are taking important steps towards the realisation of the overarching goal – namely to make it easier for all shareholders to exercise their shareholder rights,” says Morten Skanning, Senior Product Manager at VP Securities.

Companies’ right to identify their shareholders

In the period since September 2020, two Danish companies have requested identification of their shareholders.

“The limited use of this opportunity is likely due to the fact that it is still new and processes are not yet 100% in place for everyone involved. We expect to see increased volume in these requests during the 2021 AGM season. Going forward and as the market matures, we are convinced there will be considerable interest in shareholder identification as it is an important tool for companies to know the composition and development of their shareholder base,” says Morten Skanning.

As an additional service to all companies that have issued and registered their shares with VP, VP has developed a new solution, named VP Collector. The new solution will be available by the end of Q1 2021 – in time for the AGM season. Read more about the solution here.

Shareholders’ right to be informed about general meetings and other corporate events

In the period from September 2020, approximately 30 VP customers have used the new set-up for general meeting notification initiated by the issuing agent and sent from VP to end investors. However, the 2021 AGM season is at hand, and within the next few months most companies will have tried out the new set-up.

Companies need to be aware of the new framework when planning their next AGM or announcing other corporate events, and must make sure that they initiate dialogue with their bank/issuing agent in due time before the corporate event takes place – and, as usual, that they are also in dialogue with their shareholder registrar before the AGM.

In terms of the format of the convening notice for the AGM, companies should be aware that there will be less room for company-specific structures and free text content, since the content must be adapted to the ISO message format in which the notice will be forwarded to end investors. Furthermore, the convening notice and proposals must be prepared in English, for uploading to the VP platform that is used to forward the information to other intermediaries.

The new set-up means that all shareholders, whether they are retail or institutional shareholders, now have the same access to information about corporate events across EU companies. This is a significant achievement for retail shareholders in particular – making their exercise of their shareholder rights much easier.

says Morten Skanning.

Shareholders’ right to participate and vote

The technical development of a cross-border solution for proxy voting flow has been more complex than expected due to the co-dependencies between the different multi-purpose messages and the overall complexity involved in aligning the entire market to one standard.



Until the full flow is available, VP has implemented an interim solution which is an adapted version of the pre-SRD II processes, and which gives all end investors access to all SRD II services. For example, it is now possible for all end investors to receive a confirmation message when their vote is recorded and counted.

The implementation of the automated ISO message solution is expected to take place before the 2022 AGM season.



“The first big test of the new SRD II functionalities is the upcoming AGM season. We are in the middle of an important learning process, where processes and systems are continuously being adapted – and improvements are still needed. Therefore, VP continues to be in close dialogue with our customers in order to create the best possible solutions for them and for our issuers,” Morten Skanning concludes.

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VP Securities helps issuers collect shareholder disclosure information

Be prepared for the virtual AGM

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:  HOhl%73e%6e@euronext.co %6d" rel="nofollow"> 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