Market outlook with Panu Kettunen

In the following, Panu Kettunen recaps Euroclear Finland’s latest developments and shares his views on the Finnish market now and in the near future.

Euroclear Finland obtained its CSD license in August 2019, which brought new regulations and obligations to the company. The implementation of SRD II in 2020 was another important milestone. In July this year, Euroclear Finland received a formal approval from European Central Bank (ECB) to join the T2S, the ECB settlement platform, in September 2023. In this year also, all 22 market participants successfully implemented the switch of settlement and reconciliation messages from ISO 15022 to ISO 20022, thus paving the way towards T2S.

Another important ongoing development is the Settlement Discipline Regime (SDR). Essentially, it requires that the CSD collects cash penalties from the participant causing a settlement fail and redistributes the amount to the participant suffering from the settlement fail. Euroclear Finland started a penalties dry run on 20 September, allowing its participants to monitor how the new penalty engine would affect them. An extensive dry run period is also useful to the market as a whole and secures that the penalty engine will function accurately as of 1 February 2022. Read more about the dry run >

All these demanding developments impact Euroclear Finland’ business and require significant investments into the Infinity programme, so that the company can ensure a reliable system to support the Finnish financial market also in the future. Euroclear Finland’s roadmap remains steady, the main object being the move to T2S in September 2023.

Euroclear Finland has run an active market dialogue related to gross dividend payment model in Central Bank money. The aim is to move the distribution of dividends from commercial bank payments outside of the Central Security Depository system to central bank money. “I am happy that the model has been widely accepted by the industry. We are continuing the preparatory work, so that the model could be implemented post T2S”, says Kettunen.  

Euroclear Finland is closely following the further development of equity savings accounts, since they have significantly increased Finnish investors’ interest in the market. The equity savings account is more flexible and differs from the previous similar attempts, and the timing of its launch was perfect. Currently there are over 225 000 equity savings accounts.

The primary task of the Commercial team is to serve participant and issuer clients in close contact and constant dialogue and of course promote our services. For instance, on the T2S project the team will make sure that the participant clients are keeping to the schedule. For the issuer community, along the other AGM services, the team offers a new hybrid general meeting model, developed during the past year. Read about a related event >

“It is essential for us in the Commercial team to be near our clients, and we are grateful for all the feedback we get. I would like to take this opportunity to remind you that the next Client Survey will be sent out in early October, so thank you in advance for your participation”, concludes Kettunen.