Here we tell you everything you need to know about reconciliation companies, such as what they are and what their functions are. 

What is a reconciliation company? 

A CSD is a company whose shares are registered in an electronic register held by a central securities depository such as Euroclear. The main task of a CSD is to provide a digital system that keeps track of who owns which shares. 

The CSD system keeps a record of all shareholders and their ownership details, such as their entitlement to dividends, voting rights at general meetings and any preferential rights in new share issues. 

Main functions of the reconciliation company

A reconciliation company has two particularly important tasks, which are described below. 

They have a register of all shareholders

VCCs have a digital register at a central securities depository where all shareholders are listed. Shareholders who own their shares through a CSD usually get a securities account with the CSD where they can manage their ownership. 

They manage reconciliation dates

For important record dates, such as dividends or shareholders' meetings, the record date is used as a cut-off point that determines which shareholders are entitled to which benefits, such as

• Voting rights at general meeting, where shareholders vote on important issues such as who should sit on the board, whether to issue new shares and whether to pay a dividend. 
• The right to receive dividends, i.e. the right to share in the capital that the company has decided to distribute to its shareholders. 
• Preferential right in case of new issue, i.e. the shareholder is given the right to subscribe for newly issued shares before other interest groups such as employees or the general public. 

Why are record dates important for shareholders? 

Record dates are important for shareholders because they determine their rights, such as the right to receive dividends and to vote at the general meeting. It is also important for the record company to keep track of the record dates as they minimize the risk of misunderstandings regarding which shareholder is entitled to what. 

An example of a record date and its significance is if a company decides to pay a dividend of SEK 10 per share on January 23. If you then have shares via the record company until January 22 (the day before the record date - at the close of the stock exchange), you are entitled to the dividend. 

However, if you sell your shares after the stock exchange opens on January 22 or later, the next owner of the shares will be entitled to the dividend distributed by the company. 

What is a reconciliation register?

A reconciliation register is much the same as a share registerThe reconciliation register is a record of the ownership of a particular company. The reconciliation register is always digital and no physical ownership certificates may be distributed by the reconciliation company. 

The reconciliation register is updated by a central securities depository, which is convenient for companies with many shareholders, for example. 

What is a central securities depository?

A CSD is an organization that updates the company's share register, keeps and preserves the share register, updates the share register and keeps it up to date, and is responsible for printing the share register. 

Today, there is one central securities depository in Sweden, and it is Euroclear Sweden AB, which is constantly under the supervision of Finansinspektionen.