VIDEO | At PostTrade 360 Nordic 2024, the session “What’s up in the Nordic CSD scene” brought together key figures from the region’s Central Securities Depositories (CSDs) to discuss the current state and future of post-trade infrastructures. The panel included Roger Storm, CEO of Euroclear Sweden, Kristine Bastøe, CEO of Euronext Securities Oslo, Niels Hjort Rotendahl, CEO of Euronext Securities Copenhagen, Hanna Vainio, CEO of Euroclear Finland, and moderator Goran Fors, deputy head of Investor Services at SEB. Their insights shed light on the evolving landscape and the challenges CSDs face.

“The Nordics were early movers with dematerialisation back in the 1980s, while markets like the US and UK still deal with physical securities,” Fors remarked, underscoring the region’s historical leadership while highlighting the pioneering role of Nordic markets in developing efficient post-trade infrastructures. However, he noted that the early success of these innovations has led to a degree of complacency. Storm agreed, warning that “we need to up our game in terms of getting more competitive” in a rapidly evolving market.

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The panel delved into the significant operational challenges posed by regulatory frameworks such as the Capital Markets Union (CMU), Central Securities Depositories Regulation (CSDR), and the Digital Operational Resilience Act (DORA). While these regulations aim to enhance market resilience and security, they also place considerable pressure on CSDs. Hanna Vainio discussed the complex process of aligning Finland’s systems with European standards, explaining, “It took us five years to replace the entire CSD system” before migrating to the TARGET2-Securities (T2S) platform. These changes, while necessary, require substantial investment in infrastructure and time.

Challenges

Niels Hjort Rotendahl emphasised the long-standing challenges of achieving harmonisation within the Nordic region. “The political will is there, but the same obstacles identified decades ago still exist. We need lawmakers to assist us in breaking these barriers.” Despite strong political support for greater integration, barriers such as regulatory fragmentation and differing national practices continue to impede progress.

Bastøe agreed: “We must step up and take action. Yes, it’s incredibly difficult—changing how we operate with local business models and practices is complex. It requires significant investments and tough decisions, but we can’t afford to wait any longer. Together, we face a huge challenge: ensuring we secure the funding needed for growth, for the green transition, and for future generations. We’re dedicated to playing our part in making that happen.”

The panelists also addressed the increasing importance of cybersecurity and geopolitical preparedness. As the global landscape becomes more uncertain, regulations like DORA are essential in establishing baseline security requirements, but they are not sufficient on their own. Significant investments in endpoint controls, cryptography, and resiliency are required to meet the growing demands. Vainio pointed out the importance of collaboration with local authorities, particularly in light of historical threats, stating that “preparedness at both national and international levels is crucial for market stability.”

Resource restraint and innovation

Looking ahead, the panel highlighted two major challenges: resource constraints and the need for innovation. Rotendahl mentioned the upcoming shift toward T+1 settlement cycles, which will require even faster post-trade processes and further technological advancements. However, the panelists noted a shortage of talent across the industry, particularly as demand grows for real-time systems and automation.

The session concluded with a vision for the future, as the panelists expressed optimism about the potential for greater harmonisation and technological innovation. By 2030, they expect significant strides toward integration, with initiatives such as unified software platforms serving multiple CSDs across the Nordic region. “We must innovate, not just through technology like blockchain, but by rethinking the entire ecosystem,” said Rotendahl, emphasising the importance of streamlining and standardising practices to drive efficiency and reduce costs across the financial ecosystem.

• The consolidated PostTrade 360° Nordic conference, in Stockholm on 4–5 September 2024, came to host 1,200+ delegates and featured 70 sessions.
• Our coverage relating to the event is indexed here.
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