Affiliation to Euroclear Sweden – how it’s done
There are many reasons why a company may wish to affiliate its shares to Euroclear — but the process is always the same. Here, we break down how it works.
Amendment to the Articles of Association
The first step in connecting to Euroclear Sweden is to adopt a provision in the articles of association stating that the company’s shares shall be registered in a central securities depository (CSD). A company can only decide to amend its articles of association by holding a general meeting of shareholders, and must therefore issue a formal notice of such a meeting in accordance with the Swedish Companies Act (aktiebolagslagen). Once the notice has been distributed and the amendment has been approved at the general meeting, the change must be filed with the Swedish Companies Registration Office (Bolagsverket) for registration.
Contact an Issuing Agent
An issuing agent, such as Nordic Issuing, assists the company throughout the connection process. Among other things, we verify that the company’s share register is correctly maintained – a prerequisite for completing the registration. In addition, the company must complete a questionnaire for Euroclear, confirm whether or not share certificates have been issued, and provide basic company information, including the number of shareholders at the time of connection. We handle all the practical administration and communication with Euroclear to ensure that the necessary documentation is in place prior to the connection.
Application Submitted to Euroclear Sweden
The first formal step in the connection process, after contacting the issuing agent, is to submit an application form for registration to Euroclear. This application must be accompanied by the previously mentioned documents – the certificate regarding share certificates, the questionnaire, the updated articles of association, and the latest annual report. In certain cases, Euroclear may also require a bank certificate from the company’s bank. Obtaining this certificate can take up to three weeks, which is one of the reasons why companies should contact an issuing agent well in advance of the planned registration. The share register is a key part of the application. It must be maintained in accordance with the Swedish Companies Act (ABL) and must be transferred to Euroclear Sweden’s system. The register must accurately reflect the company’s current shareholding structure, and all historical changes must be traceable back to the company’s formation.
Application Approved
Once Euroclear Sweden has approved the application, they assume responsibility for managing the company’s share register and transfer it into their system. At that point, the company is officially a CSD-registered company (avstämningsbolag) — and one step closer to a potential stock market listing.