To mark this historic occasion, we sat down with VP CEO, Niels Olsen, to reflect on some of the milestones during VP’s 40-year history.

Going digital in the 1980s

“When you look at what VP has accomplished over the past 40 years, what stands out to me is our history of innovation,” comments Niels Olsen. “In 1983, three years after our inception, we were the first in the world to dematerialise all of our listed bonds.” Prior to this point in time, stocks and bonds were physical documents, actual paper certificates that had to change hands when purchased. However, all that changed when the Danish Central Securities Depository, as VP was called at the time, succeeded in the paperless registration of all listed bonds. Listed shares followed in 1988. “I worked for one of VP’s participants at the time, and I can remember the Easter of 1988, working to convert, or dematerialise, all of the physical share certificates. That was really the start of the financial industry’s digital transformation.”

A first-mover tradition

The dematerialisation of securities was not the only area in which VP would prove to be a first-mover as VP also was the first CSD in the world to register securities directly to the beneficial owner. In 2009 VP was the first CSD to hold a fully virtual Annual General Meeting and the year before that, in 2008, VP was the first non-EUR CSD to establish a CSD in the Euro-zone. “The idea behind that initiative was to set up a CSD in Luxembourg, and in that way ensure the collateralisation of Euro-denominated securities via the European Central Bank (ECB). Here, we were a bit ahead of our time, and we joined T2S with Euro in 2016, but it demonstrates how we’ve never hesitated to be an early adopter,” says Niels Olsen. And in recent years, VP has continued paving the way to European harmonisation in the Nordic region, bringing the Danish kroner to the T2S platform in 2018.

From participants to customers

Niels Olsen has also observed how VP has adopted a more commercial mindset over the past four decades. “My predecessor told me a story related to when he first started at VP. He asked to see the customer list, and was told that such a list didn’t exist. When he persisted, the response was, ‘Oh, you mean the participants (central deltagere) list.’ At that point in time, we didn’t really view our clients as customers, they were participants. And whenever you start using synonyms for your customers, you distance yourselves from them. I think that’s a perception we have really worked to change, especially over the past 20 years. We’ve strived to develop a more business-oriented, commercial mindset, and we’re still working towards that goal.”

A new chapter

On this 40th anniversary, there is definitely a sense of a new beginning on the horizon. “There’s no doubt that with the pending Euronext acquisition, VP is entering a new chapter. Our history as an independent actor in the European market is ending, and we look ahead to a future as a part of a larger, pan-European company. Themes that have characterised VP until now, innovation, digitalisation and a commercial mindset, have all been with the goal of creating a more effective market infrastructure,” Niels Olsen states. “Joining the Euronext family will be another important step towards that goal.”