Market activity 2019 and plans 2020

Euronext VPS had a positive development throughout 2019 and had a growth in all key areas. We continue to experience an increased interest from larger international institutions to establish a more direct model to the Norwegian infrastructure.

The increased regulatory burden and requirements for significant capital investments in technology leads several market participants to reevaluate their business proposition, leading to consolidation and some exit the business. In Euronext VPS, we have invested in both people and technology to harness the vast amount of data our organization occupies. Overall, we received high customer satisfaction for 2019 on the same high level as previous years. Euronext VPS will continue to deliver new products and services to our clients in the years to come with no exceptions for 2020.

In line with other CSDs in the Nordics and other parts of Europe, Euronext VPS had a positive development throughout 2019. A strong year on the Oslo Stock Exchange helped fuel a surge in values with eight percent throughout 2019. Assets under custody in Euronext VPS surpassed NOK 6 000 billion – an all-time high. Private investors seem to have understood the importance of increased savings as the number of VPS accounts eclipsed 1.4 million marking a growth of six percent throughout the year. The favorable market conditions also benefited the secondary markets as trading activity increased – illustrated by a five percent growth in settlement instructions throughout 2019.

Risk mitigation and cost reductions continue to be high on the agenda for both local and international institutions. In Euronext VPS, we experience an increased interest from large international institution to establish a direct link to the Norwegian infrastructure.

The Norwegian capital market has always been characterized by a wide specter of market participants. We now observe a potential change. The increased regulatory burden and requirements for significant capital investments in technology leads market participants to reevaluate their business proposition, leading to consolidation and some exit the business. Our market environment is entering a more mature phase, and we see further consolidation as likely.

Several of Euronext VPS’s clients have been reviewing their post-trade operations throughout the last year. Some have chosen to close down part of their post-trade business; others have invested in new initiatives. Clients are evaluating and –refocusing their core-business proposition. Some of the services they used to offer now simply implies taking on excessive risk. This has led to a process where clients are much more aware of the services they provide in-house and what they choose to outsource to third parties. This has led Euronext VPS to make significant investments and take a position within tax and regulatory reporting – leading to the development of new products and services, enhancing our strong position as a reliable and trusted partner.

As we, all know the importance of data and analytics continues to grow by the day. In Euronext VPS, we have invested in both people and technology to harness the vast amount of data our organization occupies. Although in the early phases – we know have enhanced insights into our products and client behavior we did not previously have. Through data and reason, we hope to produce unique insights that both VPS and our clients will be able to harness. One product we had success with this year was Top Shareholder Information, which received a positive reception in the market. We hope this is just the beginning of a long journey.

Euronext VPS prides itself in being a facilitator for market participants to discuss and promote the Norwegian capital market. This year marked the 7th year of the Market Advisory Board (MAB) – where 11 of Euronext VPS’s most important clients from both home and abroad meet to give advice as to how Euronext VPS should conduct the business as a CSD – but maybe more important – how we establish good practices for the Norwegian market. The MAB mainly represents strategic discussions – therefore we also have established a Reference Group that discusses market practice topics in the Nordic and Norwegian post-trade market.

Here at Euronext VPS, we cherish the opportunity to meet our clients on different arenas. In the first quarter, we had regional seminars in Bergen, Trondheim, and Oslo where we met local clients that are very important to us. This year was no exception as we were in the middle of an integration process with Euronext. In the fourth quarter, we held the annual Post Trade Norway conference where more than 120 delegates from across the industry attended. As always, discussions were frank, insightful but always with a glimpse of humor. Finally, at the end of the year, we arranged a client seminar in cooperation with Euronext and Centevo to present our plans for the Euronext group’s new growth strategy with focus on post trade.

As we do every year, we approached our clients at the end of the year with our Client Satisfaction Survey to measure the CSI index. Overall, we received high customer satisfaction for 2019 on the same high level as previous years. 76 % are very satisfied with being a client of Euronext VPS, where they will maintain a lasting relationship. This year (2019) Euronext VPS scores highest on the delivery of products and services at the agreed time. Strengths that stand out and should be maintained and reinforced are client focus, contribution to simplification and client service.

Overall, we had a great year, but what to come might be even more important. Here at Euronext VPS we are in the middle of an integration process that will provide unprecedented opportunities for our clients and the Norwegian and Nordic capital market.

Euronext VPS will continue to deliver new products and services to our clients in the years to come with no exceptions for 2020. Through our Road Map that was introduced for the first time before summer in 2016, we are committed to launch new features on a quarterly basis also in 2020. Some features that are worth mentioning; new tax services for international equities and ETFs, Hold & Release, SRD II services, CSD links, APIs and Settlement Discipline services.