VP announces service in Swedish Kronor - updated
VP SECURITIES provides Corporate Actions, clearing and settlement in SEK from March 2017. The initiative is a response to requests from the Danish mortgage industry as the Danish Central Bank discontinues payments in SEK. Update: Please note that the project timeline is subject to the final approval of VP SECURITIES at Riksbanken.
Swedish investors and other investors with an interest in SEK cash flows will not be negatively impacted by the termination of the existing service in the Danish Central Bank. VP SECURITIES is now announcing service and support for not only Corporate Actions but also for clearing and settlement in SEK. The service launches in March 2017 via a VP Client Settlement account in the Swedish Central Bank. Banks will be able to service SEK-denominated securities for their clients on VP accounts, and issuers will be able to continue to issue SEK-denominated securities.
“We have been in close dialogue with issuers and banks, and we have decided to continue and extend the service in SEK at VP SECURITIES”, says Bjørn Stendorph Crepaz, Head of Business Development, and Issuance & Safekeeping in VP SECURITIES. “Basically what we offer is the same service to issuers and banks regardless of whether the denomination is in DKK, SEK or EUR. Banks will be able to service their clients in these currencies from the same safekeeping accounts, and issuers will through VP be able to attract both Danish and Swedish investors.”
For several years, the Danish mortgage industry has provided Corporate Actions payments of interests and redemptions in SEK. This was supported by Danmarks Nationalbank (the Danish Central Bank), and it was an integrated service at VP SECURITIES. However, this service discontinues in 2017 as the new KRONOS2 platform launches at Danmarks Nationalbank, and the new offering from VP SECURITIES fills the gap and extends the possibilities in SEK. Figures suggest that the market value of SEK-issuances through VP currently amount 48 billion worth in DKK and that Corporate Action payments total more than 200 million SEK on a yearly basis
“The market participants are obviously looking for new cross-border opportunities as the Nordic markets are getting more integrated and TARGET2-Securities is providing a new European infrastructure. With this new announcement we offer a known and reliable infrastructure for streamlining issuances in both DKK, SEK and EUR, and we provide banks with the ability to service investors in these currencies on the same end-investor account”, says Bjørn Stendorph Crepaz.
VP SECURITIES expects long-term rise in Corporate Actions, clearing and settlement in SEK as the new service makes it easier and more integrated going forward.