Euronext Securities Porto has in place a process for constant maintenance of its Business Continuity Plan, according to the best international practices, in order to ensure that the strategy and the procedures defined within the plan are capable to address any foreseeable crisis situation allowing, thus, the good functioning of the Market.

On the 30th of October 2021, Euronext Securities Porto carried out a global external test of business continuity with the activation of its disaster recovery center, allowing financial intermediaries to verify Interbolsa’s recovery capacity, acting normally from their own offices. This test is part of the plan for the verification of the adequacy and of the operation of the recovery procedures and necessary resources as described in the Business Continuity Plan of Euronext Securities Porto.

Euronext Securities Porto took advantage of the availability of the T2S platform during a non-working day to test with external participation the activation of the Business Continuity Plan. This availability was made possible by ECB extending the real time settlement window after the NTS settlement on the night from Friday to Saturday until Saturday afternoon.

The test was open to the voluntary participation of all financial intermediaries affiliated to Euronext Securities Porto, and ten institutions participated in this test of the disaster recovery center by accessing from their own offices, namely Banco Comercial Português, S.A., Novo Banco, S.A., Novo Banco Açores, S.A., BEST – Banco Electrónico de Serviço Total, S.A, Banco Finantia, S.A., BNP Paribas Securities Services, S.A., Citibank International, PLC – Sucursal em Portugal, S.A., Caixa Geral de Depósitos, S.A., ABANCA Corporacion Bancária, S.A. – Sucursal em Portugal and Banco de Portugal (DMR).

The test began on Saturday morning with a simulated incident, which left its main data center unavailable, with the consequent activation of the disaster recovery center and the re-routing of the communications decided after a meeting of the Crisis Management Team, thus allowing all participants to access the recovery system.

Immediately after the activation of the disaster recovery center, the Support and Recovery Teams activated the applications in the disaster recovery site and proceeded with the verification of the existence of information that resulted from the previous processing, as well as the accessibility to the services. After this the services were made available to the participants that they carried out testing activities using their terminals in their offices. These activities consisted of queries and data entry operations as well as information upload and download using the file transfer functions and real time messages of the STD system.

During the tests no critical issues were identified that could jeopardize the functioning of Euronext Securities Porto’s backup systems in a real disaster situation. This asserts the adequacy of the Business Continuity Plan of Interbolsa, as well as, of the disaster recovery data center.

All the activities executed according to a predefined test plan, which was thoroughly carried out. The testing was concluded with success, which was recognized by all internal and external participants.

This result reinforces once more the engagement of Euronext Securities Porto in satisfying international recommendations and good practices for Business Continuity, thus contributing to the mitigation of the risks associated with possible disasters. This achievement contributes to the continuity of the business and the safety and reliability of the market structures, strengthening the trust of the investors and the participants and benefiting, in the end, the whole Portuguese Financial Market.

In celebration of International Organization of Securities Commissions (IOSCO) World Investor Week 2022, Euronext colleagues from all seven exchanges joined The World Federation of Exchanges “Ring the Bell for Financial Literacy”. 

#WIW2022 is a week-long, global campaign promoted by International Organization of Securities Commissions (IOSCO) to raise awareness of the importance of investor education and protection.  We, at Euronext, are at the heart of European financial markets and communities, and are committed to improving financial knowledge, skills and attitudes beyond our organization.

Sibos is the largest event for the securities post-trade industry. It brings together decision-makers, experts and peers from the global financial community.  

Teams from Euronext, Euronext Clearing and Euronext Securities will be present on our stand to showcase our complete Post-Trade offering.  Euronext is building the leading market infrastructure in Europe,  connecting trading, clearing and settlement through the expansion of our clearing house and our network of European CSDs. 

 

From 10 to 13 October Euronext will be joining the debate on “Progressive finance for a changing world”, this year’s conference theme, and discuss the need to embrace digital transformation and drive sustainability and ethical change.  

Throughout the week, come by our stand to learn how we intend to shape capital markets for future generations.  

Euronext Speakers at Sibos

Monday 10 October 2022, 12:30 

Is T+1 the goal or a step to instant securities settlement?

Pierre Davoust (Head of CSDs) 

Monday 10 October 2022, 16:00

Big Issue Debate: Hype vs reality: how can digital value solve real world problems? 

Emilie Rieupeyroux (Head of Innovation)

Tuesday 11 October 2022, 14:10 

Live interview on Sibos TV

Anthony Attia (Global Head of Primary Markets & Post-Trade)

 

With this issuance, Denmark becomes one of the first countries in the European Union (EU) to issue a green bond according to the new EU Taxonomy, a set of definitions and criteria the EU has defined for sustainable economic activities. Euronext Securities Copenhagen is proud to have been part of this historical issuance.

According to Martin Wagner Toftdahl, Head of Monetary Policy and Government Debt at Danmarks Nationalbank, the new green government bond will play a critical role in developing a financial market for Denmark’s transition to a green economy. “We believe it’s important that there is a well-functioning green capital market, where investors can find green projects in a transparent and effective manner. The state’s presence on this type of market is essential to its development.”  

Setting a high standard by following the EU Taxonomy

As a part of the issuance process, Danmarks Nationalbank and the Danish government decided to follow the recently adopted EU Taxonomy and identify green expenditures based on the EU’s upcoming climate change investment legislation. “To create the necessary transparency, the EU will play a critical role in defining, from a central place, what constitutes a green investment,” Martin Toftdahl comments. “That’s one of the reasons we’ve chosen to place so much emphasis on the EU Taxonomy. Having an established definition will make it easier for issuers and investors alike.”  



Choosing to apply the new Taxonomy with this first issuance also ensures that the appropriate framework is in place from the start. “We believe it will be crucial going forward that issuers actively benchmarks themselves against the Taxonomy. For us, being a part of creating a green capital market means that we set a high standard from the beginning, and that we have an issuance that is forward-thinking and takes into consideration the developments just over the horizon,” says Martin Toftdahl.  

Creating transparency around green investments

Proceeds from the bond will be used to finance renewable energy production, including wind and solar energy projects, and the green transition of the Danish transport sector. That investors can clearly see how their investment funds are being used is an important aspect of the green bond market, as Martin Toftdahl points out. “With this issuance, we give investors our commitment that we will use the funds generated in the way that is intended. This creates transparency around the state’s investment in green projects. What will be even more important is the reporting that we will provide, where we inform investors about the impact of the green projects we initiate.”

Choosing the right approach for investors

Another key aspect of the issuance process was choosing the right issuance model. “We had considered a certificate model before this, and we had some considerations along the way, where it was helpful to work together with Euronext Securities Copenhagen to find the right approach,” states Michal Christian Nielsen, Chief Dealer, Monetary Policy Operations and Government Debt with Nationalbank. “The entire project required that it could be done within Euronext Securities Copenhagen, so it was important that we worked together to find the right model.”

In the end, Denmark issued the green bond as a twin bond, based on a concept introduced by Germany in 2020. This model supports the green bond’s liquidity and allows investors to switch the 10-year green twin bond to the corresponding, and more liquid, conventional 10-year twin bond on a one-to-one basis. Martin Toftdahl explains the rationale behind their decision. “The Twin Bond model is a well-known and proven model in the market. It was important for us to choose an issuance model that investors are comfortable with, and to ensure the necessary liquidity.”

 Best government bond demand since 2008

The first auction for the 10-year green government bond was held on 19 January 2022, and the order book was oversubscribed to a value of DKK 23.5 billion, which was the largest show of interest in a new government bond in over 10 years. DKK 5 billion was issued at the first auction, corresponding to the maximum issuance target for the auction. The bond was listed on MTS Belgium, the professional market for primary dealers, where Danish government bonds are normally traded. 



The positive reception bodes well for future green government bond issuances. Contingent upon market conditions, the plan is to issue DKK 15 billion in green bonds this year alone. Martin Toftdahl believes that they have laid a solid foundation for these plans to be realised. “Now we’ve established a framework where we can issue green bonds, and our sense is that this form of issuance is here to stay. There are clearly limits to how much the total size of green bond issuance can be. We still have as our primary focus to maintain the national debt market’s liquidity, particularly in the primary 2-year and 10-year series.”

Financing the transition to a green economy

Bjørn Stendorph Crepaz, Head of Issuance & Issuer Services at Euronext Securities Copenhagen, also believes that the market will see more green bond issuances in the future. “The European Commission estimates that the EU needs to invest an additional €260 billion each year in order to cut carbon emissions by 55% by 2030. That well illustrates the level of investment in green energy projects we will need to see throughout the EU over the next eight years. As a part of the market infrastructure, it’s our responsibility to facilitate green investments and the transition to a more sustainable economy. This is why the Listing business in Euronext is actively creating ESG indices and all four CSDs in Euronext Securities are working actively to support the new requirements around issuance of green bonds. We’re proud to have been a part of this historic issuance and we look forward to working with Denmark and Danmarks Nationalbank on future green government bond issuances.”

ABOUT THE EU TAXONOMY

The EU Taxonomy is a classification system that establishes a list of environmentally sustainable economic activities. By providing a common language and a clear definition of what is ‘sustainable’, the taxonomy aims to create security for investors, protect private investors from greenwashing and help shift investments where they are most needed. 

Source: EU taxonomy for sustainable activities

Article source: Green bonds and Danmark er nu klar til at udstede grønne statsobligationer (Danish).

Euronext Securities has entered into an agreement with Clearstream to provide asset services to Clearstream Banking AG as Investor CSD for the Danish market. This agreement, built on long-term cooperation between the two infrastructures, will facilitate access to Danish capital markets.

Direct participation and CSD collaboration to benefit capital markets

The new agreement reflects Euronext Securities’ ambition to expand its added-value services and the demand of shortening the value chain in the post-trade industry. 



“Across Europe, we’re seeing a growing trend that the value chain between issuers and investors can get shorter, notably with more direct connections between CSDs.” said Pierre Davoust, Head of CSDs at Euronext. “There are advantages to accessing the market directly, such as more transparency, lower operational risk, and some of our customers prefer this approach. We’re responding to this trend by expanding our existing portfolio of asset services and, in time, we can see this becoming a pan-Nordic offering for our customers that choose to go this route,” he comments. “This partnership further illustrates the strategic priority to pan-Europeanise and scale up our CSDs announced last November, as part of the Euronext strategic plan Growth for Impact 2024”.

Building on a successful partnership 

Pierre Davoust points to Euronext Securities’ long-standing and successful relationship with Clearstream as one of the key factors enabling this new agreement. “Euronext Securities and Clearstream have had a successful partnership for the past 13 years in Denmark. We’re pleased that we can now build on this relationship through this agreement with Clearstream Banking AG.”

Part of a larger strategic objective 

For Clearstream, this new agreement is part of a larger strategic initiative to create a more efficient operational set-up through direct market access, as Sam Riley, Head of Investor Services & Financing at Clearstream, elaborates: “Our Investor-CSD model offers access to T2S-in and -out markets, as well as to the international markets via a central access point. It is designed to improve our customers’ operational efficiency and to reduce operational and counterparty risk. Connecting directly to the comprehensive asset services of various CSDs allows us to offer our customers the set-up and securities service quality they seek – as we are doing now with Euronext Securities. We look to further broaden this engagement, both in Europe and beyond. Ultimately, this is one supporting building block to increase the efficiency of the European capital markets.”



For more information about Clearstream, go to www.clearstream.com