For Nordic corporates, foreign investors offer an attractive and growing contribution to the financing mix – but also new risks of losing out on shareholder transparency. Euroclear Sweden’s service Vantage by Euroclear lets companies slice and dice a collection of the best owner data available, to support their investor relations and finance strategies.

“This is just one example of how central securities depositories are increasingly leveraging the rich data they hold to add value-added services. Our clients are business leaders who want to get insights about their shareholders to make better decisions,” says Annelie Lindahl, Chief Business Officer for issuer services.

The evolution of regulations such as the EU’s Shareholder Rights Directive (SRD II), and the rapid growth of available financial data, are among the forces that pull in the direction of better ownership transparency across Europe and the world. 

Even so, Swedish corporates also face a wind blowing in the opposite direction. This is due to the country’s tradition of keeping up to millions of individual owner accounts at the central securities depositories, as opposed to the world’s more common practice of “omnibus” accounts per the names of intermediaries (such as banks in custodian or broker roles). In Sweden, where owner names could previously be read in plain text in the Euroclear Sweden shareholder register, growing use of registrations per intermediary are making the shareholder lists increasingly opaque. 


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Central role and valuable data prompts CSDs to expand their product portfolios


Central role and valuable data prompts CSDs to expand their product portfolios

The increasing emphasis on value-added services is a broad trend across European central securities depositories. The CSDs’ traditional role is fundamentally to safekeep and update the securities register on behalf of the issuer, and to perform the settlement of securities transactions. (Most settlement takes place as “delivery versus payment”, where the CSD guarantees that a movement of a security to a new owner can only happen if the corresponding amount of money goes in the other direction, and vice versa, so neither party is short-changed.) The emerging value-added services are increasingly utilising the data that is available through the CSD, to produce other commercial benefits. 

In Annelie Lindahl’s view, the value-added services serve to tie a closer bond between issuing corporations and investors. 

“In the efforts to harmonise Europe’s capital market, and make it more efficient, the ambition to strengthen the issuer-investor communication is high on the agenda. The CSD is the natural hub for that,” she says. 

This is especially true for Nordic countries, and Sweden not least, just because of the strong shareholder transparency. 

A developing offer

“Our client surveys show that the Euroclear Sweden affiliates who also buy our value-added issuer products feel greater customer satisfaction. We also know that products build brand awareness. So, we will continue developing this side of the business,” says Annelie Lindahl.

“Naturally, there are complex technical challenges in rolling out product development while we are simultaneously standardising our core processes to align with Europe. But our position at the heart of the finance industry means that we must keep contributing to an efficient, deep and transparent financial market. It’s important for Sweden’s future financial stability. I know that we can offer the market even more than we do today.”

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The intermediary or bank has a legal obligation to report to the CSD, on a regular basis, who are the investors behind the assets it services. This reporting needs to be done quarterly – as well as whenever an issuer specifically requests it – and the reports go into Euroclear Sweden as the corporates’ representative. Still, this is not enough to fully sustain the transparency. Beside the reporting delay, the quality of the reported data still leaves a lot to be desired. To enrich the shareholding picture, Euroclear Sweden’s Vantage product provides a deeper, more detailed view tapping external data sources such as Morningstar, and regulatory notifications on insider trades and major holdings. The service works both with listed and private companies.

Takes the business viewpoint

“In our shareholder registers, owners are listed start-to-finish, following company law to support boards in fulfilling their obligations. The Vantage service, launched in 2021, adds the commercial perspective to generate added value and efficiencies,” Annelie Lindahl sums it up. 

Deliveries of the legal register typically take the form of PDF files. With Vantage comes instead a dynamic, digitally interactive platform. It allows users to easily set up their own analyses and reports, make comparisons and spot trends. Advanced users can call their data via APIs to feed their own or third-party applications outside the platform. The result is deep detail on the group’s own investors – combined with less sensitive information on peers. This allows the issuer to benchmark and to gather intelligence and inspiration ahead of the group’s next move in the capital market. 

“All in all, it serves to give the broader understanding of the owners. Which direction is the ownership going? Are foreign investors growing their share? Who holds the voting power? Around general meetings, it lets managers prep the nomination committee better, and when the company performs a rights issue, they can analyse who opted in or out. Then, when producing the quarterly financial report, it makes it possible to generate the list of top owners, just using the tool.”

AGMs – minus the headache

Beside Vantage, another big product among the value-added services for issuers at Euroclear Sweden, is the support of general meetings – making sure that all steps of the process comply with the various governance rules. Through the year of 2024 alone, Euroclear Sweden has co-hosted around 180 shareholder meetings. The AGM team offers support with fully virtual, as well as hybrid and physical meetings.

“We meet the group’s management already early on in their planning for the AGM, around the time they discuss which venue to hold it at. We advise on what voting procedures can be supported and help ensure that the registration process is set up properly. We check that those who register are actually owners. Then, on the day, we can control who enters the venue and can provide secure equipment for managing the voting.” 

Technically, the general meetings can take any form from purely on-site to fully remote. Still, except for during the Covid pandemic, Swedish companies keep showing a strong preference for meeting in person, and the digital meeting service has remained a small business. 

Banks, keep up your report quality

For custodian banks, the ownership reporting per corporation can understandably be an awkward process – something of a whispers game through the nominee chain from investor via custodian to CSD and issuer. Against that, Annelie Lindahl emphasises the huge value that good transparency brings to the financial market as a whole, and she urges the intermediaries to be ambitious in their effort to keep that reporting quality high.

“I want to send the message that this transparency is a value worth defending for the good of the whole financial market,” says Annelie Lindahl. 

“Through recent years we have observed a trend that custody banks take their accounts “home” to manage it on their own platforms, as opposed to keeping segregated accounts at the CSD. To maintain the transparency, the frequency and quality of the custodians’ ownership reports become crucial. We see that quality is lacking, and the challenge has grown with the increasing proportion of foreign investors – currently at around 15 percent – in Swedish groups.” 

Want to know more about Euroclear Sweden’s shareholder transparency offer? Find more info and meet our representatives here.