Here we tell you everything you need to know about CSD-registered companies, such as what they are and what functions they have.
A CSD-registered company (avstämningsbolag in Swedish) is a company whose shares are registered in an electronic register held by a central securities depository such as Euroclear. The main task of CSD-registered companies is to provide a digital system that keeps track of who owns which shares.
The system that the CSD-registered company has contains a register of all shareholders and their ownership details, such as their right to dividends, voting at the general meeting and any pre-emption right in new share issues.
The most important functions of a CSD-registered company
A CSD-registered company has two tasks that are particularly important, and we describe them below.
They have a register of all shareholders
CSD-registered companies have a digital register with a central securities depository in which all shareholders are included. Shareholders who own their shares via a CSD-registered company usually get a securities account with the CSD-registered company where they can administer their holding.
They handle record dates
On important record dates, for example for dividends or general meetings, the record date is used as a cut-off that determines which shareholders are entitled to which benefits, such as:
- The right to vote at the general meeting, where shareholders vote on important matters such as who should sit on the board, whether a new share issue should take place and whether a dividend should be paid.
- The right to a dividend, that is the right to receive a share of the capital the company has decided to distribute to its shareholders.
- Pre-emption right in a new share issue, meaning that the shareholder has the right to subscribe for newly issued shares before other groups such as employees or the general public.
Why are record dates important for shareholders?
Record dates are important for shareholders because they determine which rights they get, such as the right to a dividend and the right to vote at the general meeting. It is also important for the CSD-registered company to keep close track of record dates, as they minimise the risk of misunderstandings about 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 23 January. If you hold shares via the CSD-registered company up to 22 January (the day before the record date – at the close of the stock exchange), you are entitled to the dividend.
If, on the other hand, you sell your shareholding after the stock exchange has opened on 22 January or later, the next owner of the shares is entitled to the dividend the company pays out.
What is a CSD register?
A CSD register (avstämningsregister) is roughly the same thing as a share register, that is a register of what the ownership of a particular company looks like. The CSD register is always digital and the CSD-registered company may not issue any physical certificates of ownership.
The CSD register is updated by a central securities depository, which is convenient for companies with, for example, many owners.
What is a central securities depository?
A central securities depository is an organisation that updates the company's CSD register, keeps and preserves the share register, updates the share register and keeps it current, and is responsible for printing the share register.
Today there is one central securities depository in Sweden, and that is Euroclear Sweden AB, which is under the constant supervision of the Swedish Financial Supervisory Authority (Finansinspektionen).
