What are Euroclear Sweden's main tasks as a CSD?

In short, we have two main tasks:

  1. Register who owns the securities on the securities accounts in our book entry system. This is called book entry.

  2. Provide services for banks and financial institutions to process sales and purchase transactions and in connection to that move securities between accounts in our system (i.e. that the securities change owner). This is called settlement.

From share certificates to digital ownership

A common form of securities is shares, whereby you own shares in limited companies.

Before 1989, shares normally existed in Sweden as physical share certificates.  These physical share certificates, stating the ownership of a certain number of shares in company, were stored in e.g. a safe and had to be transported from the seller to the buyer in connection with a trade.  

Since 1990, physical share certificates are no longer used for shares traded on the stock exchange and other market places, and all listed companies in Sweden have registered their shares with us. This means that the information about who owns certain shares is stored in our digital book entry system, and the physical share certificates have been converted into digital ownership registered in our security system. In other words, the shares have become dematerialised. When a limited company registers its shares with us as a CSD, the shares are dematerialised and the ownership of the shares are recorded on accounts in our book entry system. Information about who holds which shares is collected in the company’s register of shareholders.

What does a share trade look like in our system?

When someone wants to buy or sell a share that is registered in our system – usually through their bank – the bank informs us that the share is about to change owner. Euroclear Sweden then checks that the buyer has money on their account and that the seller has the share on their account. If everything is in order, the change of ownership goes through via our system. This last step of a share trade, the actual exchange of the securities and corresponding payment as well as the transfer of ownership of the securities, is what is called settlement.

Besides shares, Euroclear Sweden also manages a broad range of securities such as bonds, warrants, convertibles and other structured products. These are managed in a similar way as shares.