Behind the scenes at Euroclear
What does it actually mean to affiliate your shares to Euroclear, and why have nearly 2,000 Swedish companies chosen to do so? In dialogue with Euroclear itself, we have compiled the most important points to consider for those planning to affiliate their company with Euroclear, needing help with share register administration, or simply wanting to understand how everything fits together.
Euroclear is Sweden’s central securities depository and can be seen as the heart of the country’s financial market. It ensures that all clearing and settlement processes function properly, for example in securities trading. Euroclear Sweden handles transactions worth SEK 590 billion per day, which corresponds to roughly one-tenth of Sweden’s GDP each day.
Currently, around 2,000 companies are affiliated to Euroclear, including companies that issue other types of securities besides shares. Approximately half of these companies are publicly listed, meaning that many companies affiliate to Euroclear without planning an IPO.
The affiliated companies range from unlisted, smaller startups to large, well-established large-cap companies. Regardless of whether a company plans to go public or not, there are several advantages to affiliating with Euroclear.
Affiliate your company to Euroclear
One of the benefits of affiliating your company and having its shares registered with Euroclear is reduced administration, as Euroclear takes over the management of the share register. This allows companies to focus on their core business. It also provides reassurance and serves as a mark of quality for investors that an independent third party manages the ownership register.
When a company plans to list on the stock exchange, timing can be crucial. If a company is already affiliated with Euroclear, part of the work required ahead of a listing is already completed.
By affiliating with Euroclear, companies open the door to a broader range of investors. Some companies also affiliate because it aligns with the guidelines of the corporate group they belong to. In this way, it contributes both to growth and future development opportunities.
When affiliating to Euroclear, the company – or the issuing agent handling the connection – must collect information from shareholders in order to deliver the shares to their securities accounts at the time of connection. For Euroclear to take over the share register, the majority of shareholders (90%) must have provided their account details beforehand.
Although most companies are well prepared for the affiliation process, it can be challenging if documentation is not in order. According to Euroclear, the smoothest processes occur when companies plan well in advance and engage an issuing agent or financial advisor – and, if necessary, Euroclear itself – so that as much as possible is prepared before the affiliatioin takes place.
Euroclear’s path forward
Euroclear actively works to meet future market needs and demands. Much of the input comes from customers, both through general customer surveys and qualitative interviews aimed at identifying areas for improvement. Euroclear continuously develops its value-added services in collaboration with customers and is also working on a new customer portal that integrates everything for a more efficient workflow.
The goal is to become even more relevant to companies and deliver greater perceived value.
Are you considering connecting your company to Euroclear? Contact us at info@nordic-issuing.se to receive all the necessary information and assistance for a smooth process!