The Nordic capital markets have long been recognised for their strong digital infrastructure, high levels of transparency and active participation from investors. As cross-border investment becomes increasingly important to Europe’s capital markets, the region also has an opportunity to bring these strengths to a broader European market.
That was one of the themes discussed at last week’s PostTrade 360° conference in Stockholm, where Niels Siggaard-Rotendahl, CEO of Euronext Securities Copenhagen, and Kristine Bastøe, CEO of Euronext Securities Oslo, joined fellow Nordic CSD leaders for a discussion on the future of the region’s capital markets.
For both, the starting point is clear. The Nordic markets have built something worth preserving, while also recognising that the infrastructure connecting European markets increasingly needs to work across borders.
Staying close to the market
For CSDs, understanding what the market needs has never been more important. As the industry undergoes significant change, staying in close contact with clients and other stakeholders helps ensure that new developments solve real problems rather than simply introducing new technology or processes.
Kristine Bastøe highlighted the importance of maintaining an active dialogue with the market community. Euronext Securities engages with clients through user committees, project forums and other forms of regular interaction, creating opportunities to discuss priorities and the pace of change. “We cannot operate in a bubble,” she said. “We need to understand what issuers and investors actually need and make sure the changes we drive ultimately work for the market.”
Niels Siggaard-Rotendahl also stressed the importance of taking a broader view of the market and the different participants a CSD ultimately serves. For a CSD, that means looking beyond the immediate relationship to understand what is happening across the market and how changes affect issuers, investors and other participants. “You need to understand clients, and understand clients’ clients,” he said.
This is particularly relevant in the Nordic markets, where issuers, investors, exchanges and market infrastructures have traditionally had close relationships. Maintaining that proximity can help ensure that the region continues to develop capital markets that work for the businesses and investors using them.
Nordic strengths, European ambitions
The discussion also looked at the relationship between the Nordic markets and the wider European capital market. For Kristine Bastøe, the Nordic region has several strengths to bring to this conversation. Trusted relationships, transparency and a strong track record in digitalisation and innovation have helped create markets that are well positioned to adapt to change.
But being Nordic does not mean operating separately from Europe. Niels Siggaard-Rotendahl described the infrastructure connecting European markets as “European plumbing”, affirming that it should become more frictionless and less fragmented while building on what already exists.
For the Nordic markets, greater European integration does not necessarily mean losing their regional identity. Instead, it can provide a way to build on the strengths of the region while making it easier for investors and issuers to operate across borders.
This is also where technology and harmonisation can make a difference. Common standards and more connected infrastructure can reduce some of the complexity involved in cross-border investment, while allowing clients to retain choice. Kristine Bastøe does not see a future in which the Nordic markets necessarily need to converge around a single CSD. “The Nordics will not benefit from one CSD. We need the competition and we need to have choice in the region,” she said. For her, competition and integration are not contradictory. The aim is to create an environment where clients have choice while the infrastructure around them becomes increasingly connected.
A region amid transformation
The Nordic post-trade industry is also undergoing a period of significant change. The move towards more harmonised European infrastructure is happening alongside the development of digital assets and the adoption of AI. For CSDs, this means preparing for several changes at once while continuing to operate and improve the infrastructure that supports today's markets.
For Niels Siggaard-Rotendahl, one of the immediate challenges is the availability of the specialist expertise needed to support this transformation. Over the longer term, the industry will also need to work out how new asset classes can coexist with the current securities and infrastructure already in place.
Digital assets are still a relatively small part of the overall market, but demand is becoming more tangible. The question for market infrastructure is therefore increasingly how to accommodate new forms of assets alongside existing ones.
Kristine Bastøe described the challenge as the “sum of everything”. Individual changes can be managed, but implementing several major transformations at the same time requires careful prioritisation. “Doing one thing is easy, but doing everything in parallel requires much more,” she said.
That makes the relationship between CSDs, clients, regulators and other market participants particularly important. Large market transformations take time, and the practical details can be as important as the overall ambition.
Keeping sight of the destination
The Nordic markets are entering an important period of change, but the direction is clear. The goal is to make markets easier to access, more connected and more efficient, while retaining the strengths that have helped the region develop into one of Europe's most advanced capital market environments.
For Euronext Securities, that means continuing to listen to clients and work with the wider market community while contributing Nordic experience to the development of European capital markets. The Nordic markets have a strong foundation. The opportunity now is to build on it, connecting the region more closely to Europe while keeping the needs of issuers and investors at the centre of the transformation.