VP: In your view, what is the role of a User Committee in a CSD?

The User Committee is the voice of the market; the voice of VP’s customers with a direct reporting line to VP’s Board of Directors. We work to ensure that all customers have equal market access, and that no one is setting up unnecessary or unfair barriers to market entry for securities post trade activities. Our role is also defined by EU regulations stipulating that we must submit our yearly activity report to the Board. 

Beyond this, there is an interesting strategic aspect to the Committee’s role. We identify together what is strategically important for all of us: VP, the Committee members and the organisations we represent, short- and long-term. We have a shared interest in creating a strong, transparent capital market in the Nordic region, and we try to live up to that through the Committee.

VP: What are your ambitions for the Committee over the next few years?

There are three main areas that I would like us to focus on. First of all, I want to increase member involvement. We are a group of senior professionals with a tremendous amount of knowledge regarding securities post trade activities and the capital markets. We also have a broad range of experience, and I believe we can use both to a further extent. 

Secondly, it is paramount that we work together as one team. In my opinion, the Danish market has had a hard time agreeing on a common direction as how we want to do things. This has improved over the years, as we’ve worked towards harmonisation, but there is still much to be done. 

Thirdly, we should continue focussing on the sector’s strategic development. We operate in a challenging environment, where it is becoming increasingly difficult to generate revenue, and where costs are increasing, in large part due to compliance initiatives and significant investments in digitalisation. I am a strong believer that there is a significant advantage in applying the same infrastructure across the Nordic CSDs wherever possible. This will give us economies of scale enabling us to compete with large, global players. 

Besides, now, more than ever, we have to move from a national focus to a more regional and European focus, yet it is not as simple as it may sound. There are a number of requirements and barriers in the individual countries that we have to consider before we can truly benefit from the regional and European economies of scale. One of our key tasks as a Committee is, therefore, to steer us onto the European harmonisation highway, while still maintaining a clear understanding of our development and business growth drivers.

VP: How do you view your role as chairperson in that context?

One of the unique things about our Committee is that we have a broad representation of domestic, regional and global market players, investment funds and banks, representing the entire market spectrum. If we only had the buy-side or the sell-side, we might overlook something crucial. Thus, I strive to be very mindful to tap into the combined vast knowledge pool, so we can achieve good results together. 

VP: You’re also a member of the User Committees for the other Nordic CSDs. What perspective does that give you? 

Of course, each User Committee’s discussions are confidential, but being present on all of the Nordic committees does provide a unique perspective in the form of a complete overview of the activities of all of the CSDs in the Nordic region. That is definitely an advantage, especially when it comes to VP and VPS, now both owned by Euronext. This allows for exploring how to attain economies of scale, how to create a unified technical infrastructure, and how both CSDs can benefit from the services introduced in the individual countries. 

VP: Looking ahead to 2021, what are the Committee’s key focus areas?

We will continue to work with our current topics: price structure and policy; business and product strategy; acceptance criteria for participants and issuers; and the impact of technological innovation. 

If highlighting one in particular, however, I would say the impact of technological innovation. Digitalisation is key. No matter where we look, whichever industry, we can see the impact that digitalisation is having on infrastructure and services. We already have a widely automated set-up supporting securities post trade activities, but we still have a long way to go. 

Additionally, the Committee focuses on maintaining operational stability in the market. As you will know, VP had a technical incident in May this year, which taught us that we must improve our crisis management capabilities. To this end, we also need to complete the outstanding tasks related to the migration of DKK onto T2S. 

Finally, we have to focus on resilience, and maintaining a balance between ensuring market access and market integrity, so we have fair, but stringent requirements for those who want to engage in securities post trade activities through VP. We have to continue to capitalise on the post-trade services experience within the Committee, so we can make decisions that mutually benefit the market, market players and the organisations we represent.