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 

Euronext Securities Copenhagen has worked with Obton and Koncenton to develop an end-to-end solution for virtual annual general meetings (VGMs). Each of the two investment firms now has a solution that is tailored to their unique needs and empowers them to run their own VGMs as a part of a self-service solution.

Two fast-growing alternative investment funds

Owned by the Obton Group, both Obton and Koncenton have experienced an exceptional growth rate in recent years. 



Obton operates at the forefront of the transition towards more sustainable energy sources, helping new and experienced professional and semi-professional investors diversify their holdings by investing in solar plants around the world. The investment firm is among the largest investors in solar energy in Europe and has more than 4,000 investors and +20 billions under management 



For the past three years, Koncenton has been the largest property investment firm in Denmark, and invested DKK 5 billion in properties during 2021 alone. This year, the company plans to add over 60 properties to its rapidly expanding portfolio and grow by 1,000 investors. Prior to the COVID-19 pandemic, both companies held in-person annual general meetings (AGMs). Given the large number of investors involved in both companies, the pandemic-related restrictions posed unique challenges.

Pandemic prompts search for a virtual, self-service solution

“Our AGM process was very physical before the pandemic,” relates Mads Møller Wejdemann, Director, Investor Services at Obton. “We scanned barcodes to verify the attendees, passed out paper ballots and collected votes manually. So, when it was no longer possible to hold a physical meeting, we needed to find a platform that would enable us to interact with our investors.” Because Obton and Koncenton have to hold an AGM for each investment fund, they needed to find a solution with a robust self-service element. “It would be a very expensive solution if we had to have a vendor provide support to hold all of our AGMs when we have so many, so one of our main requirements was the ability to run the VGMs ourselves,” he says. 

Developing a tailored VGM solution

Obton and Koncenton worked with Euronext Securities Copenhagen to develop end-to-end VGM solutions that are tailored to each investment firm’s unique needs. Koncenton developed a two-factor model, which enables the company to adjust the VGM format based on the number of attendees. “For meetings with a small investor turnout, we use the Euronext set-up for the registration process, and run the actual meeting on the Microsoft Teams platform,” explains Kenneth Klitgaard Sørensen, Company Manager at Koncenton. “But when we hold our large meetings, where we need to manage participants and voting, we need to have a digital flow covering the entire meeting.” Koncenton is also working with Euronext Securities Copenhagen to minimise the delay between the live event and the feed that investors watch. One of Obton’s requirements was being able to integrate the VGM solution with their order books, so the two systems could communicate with each other. They were able to find a solution to this requirement as well. Both investment firms have used Company Webcast as an integrated part of their VGM solution. 

Virtual format has its advantages

While the shift to virtual AGMs was made out of necessity, both Obton, Koncenton and their investors have discovered the advantages of meeting virtually. “One of our goals as an investment firm is to keep our investors as informed as possible and give them insight into their investments and how they’re performing,” says Kenneth Klitgaard. “The virtual format gives us more options so we can have as many attendees as possible. Some investors who might have been hesitant to spend an entire day in transit just to attend a 1.5-hour meeting, can now attend virtually. Our hope is that this will increase the overall number of attendees. And, generally speaking, investors appreciate not having to attend physically.” 



The virtual format also eases the administrative burden, as Mads Wejdemann points out. “When we had paper-based voting, we had to manually collect the votes and count them, which took a great deal of time. Now everything is handled digitally, and that makes the process a lot easier to manage.” 



Going forward, both investment firms will use a hybrid approach, offering investors the opportunity to attend virtually or physically. “Some people like to know who the other investors are, and by offering a hybrid solution, we can meet everyone’s needs, whether they prefer the physical or virtual format,” Mads Wejdemann says. 

Facts

VGM is a tool for companies that wish to foster active ownership and see a higher participation and interaction than in a physical meeting. 

VGM includes: 

• Flexible set-up for issuers
• Fully or partially virtual meeting
• Static, dynamic or live video stream & audio
• Ability to add and modify agenda points
• Secure back-up of data and functionality

Read more about how we can support your Annual General Meeting and your VGM.

Company Webcast

Company Webcast offers cutting-edge webcasting services to enhance the reach of your investor relations events and internal communications while increasing the interactivity and engagement of your stakeholders. Ensure maximum impact for your results presentations, virtual roadshows, Capital Markets Days, AGMs and more.

Read more about the services from Company Webcast.

Euronext Securities Copenhagen today announced that J.P. Morgan has signed an agreement to become a direct participant in the Danish market.

The agreement reflects a growing trend of shortening the value chain between issuers and investors. Across Europe, it is becoming more relevant for international players in the custody business to directly access local markets through direct connectivity with local CSDs. There are obvious advantages of this for both custodians and the clients they serve, ranging from reduced costs, a shortened custody chain, enhanced transparency and operational efficiencies. Euronext Securities is responding to this trend by converging the infrastructure and expanding services.

Anthony Attia, Global Head of Primary Markets and Post Trade at Euronext, commented: “We have had a close relationship with J.P. Morgan for a number of years, and we are proud to bring this collaboration to the next level and support them in their role as an Account Controller on the Danish market. Shortening of the custody value chain is a key assumption of Euronext’s “Growth for Impact 2024” strategic plan. Today’s announcement shows this assumption is right. Structural changes like this one do not only produce tangible benefits for international clients, they fundamentally better connect European economies to global capital markets. Concretely international investors now have a more direct and efficient access to 1.5 trillion euros of assets issued in the Danish capital market.

The most efficient way of servicing a growing market 

For J.P. Morgan, direct interface to the Danish market through local CSD connectivity will help drive its significant asset servicing presence in the Danish and Nordic markets.

Hannah Elson, Head of Global Custody at J.P. Morgan commented: ‘We are excited to partner with Euronext Securities in providing direct market access in Denmark to our global clients. A shorter custody chain brings significant efficiencies and enhances the overall client experience. This move further strengthens our franchise and growth plans across the Nordic Region and demonstrates our commitment to delivering efficient market access to global investors’.

Download the Press Release here