Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 4

Recommendation 5 Recommendation 6 Recommendation 7 Recommendation 8

Market selection

Recommendation 4

Each market must have clear rules assuring investor protection by safeguarding participants from the financial risks of failed settlement and ensuring that listed companies are required to follow sound policies on corporate governance, transfer of economic benefits and shareholder rights.

1.	Does the depository or the market have securities lending and borrowing schemes in place, and are these open to all market participants and their settlement agents?	The depository does not offer facilities for securities borrowing for fail coverage, because of the high success rate, which leaves a limited amount of business to pay for such facilities. Meanwhile, the depository runs a system for automatic collateralisation, which together with the netting system significantly reduces participants liquidity requirements. In the market it is possible to lend securities.
2.	Does the settlement system mark fail trades to market and collect margin from the failing counterparty to protect the innocent counterpart's interest?	If a participant causes a failure, he has to pay a fine. Fines are used only around twenty times a year, so failures are no serious problem for the depository or its participants.
3.	Does the market operate a guarantee fund or have an equivalent procedure to protect against the cost of failed transactions; and which sectors of the market does it cover?	If the depository causes a failure, there is a guarantee fund to cover losses. To date this fund has never been invoked. Size of the guarantee fund is minimum DKK 1,000,000,000 (€135,000,000). A participant contributes with a guarantee, which is calculated yearly as a proportion of his business volume with the depository. A participant contributes with a guarantee of minimum DKK 100,000 (€ 13,500). The Stock Exchange has no guarantee fund. In the derivatives market, there is a guarantee fund.
4.	Are the stock transfer agents (share registrars) linked electronically to the depository?	The transfer of rights to a security is final when it is settled in the depository. Bonds are issued in bearer form, and there are no requirements to register shares. For the purpose of voting, a company may require registration. The initiative lies with the investor, who asks his bank or broker to register or de-register. This is done on-line with the depository. Upon request the company or a registrar appointed by the company gets the information of registered investors in the company.
5.	Is there a legal maximum time period to complete ownership transfers in the books of the issuer? If so, does market practice adhere to the deadline?	No. Registration only takes place for voting purpose.
6.	Are investors entitled to all benefits arising on a security from the point of purchase; and how are any rules enforced?	All benefits arising from a security are transferred to the buyer at the time of settlement in the depository. Some shareholder benefits (including the right to vote), may, however, be subject to registration of the shareholding in the company register of shareholders. Because of this practice, there is no need for compensations and systems hereto.
7.	Is proxy voting permissible in the market and can such proxies be lodged by post or other remote delivery method?	Voting by proxy card is not permitted in the Danish market. According to the Danish Companies Act it is a precondition for voting that the shareholder attends the meeting in person or is represented at the meeting by a proxy who must present a power of attorney.
8.	Are there binding rules in the market stating the minimum and maximum lapsed time between the announcement and completion of key events, including registration, the calling of shareholder meetings, the payment of dividends or interest, rights issues, tender offers and other voluntary corporate actions?	Foreign issues: In general, the issuer's homeland rules are accepted in the system. Domestic issues: Right issues: Stated by the Danish Companies Act to be announced 14 days before completion. Payment of interest, dividend and redemptions: The depository is in control of these payments to be executed on due date. The depository has to be informed of dividend approved on an AGM at the latest next day at noon. At T+3 the issuer has to pay the amount into a Central Bank account at 8:55am for execution on T+3 at 9:30am without loss of value days. Calling of shareholder meetings: Between 4 weeks and 8 days prior to the meeting date according to the Danish Companies Act. Registration: Is not enforced by Danish legislation or the Danish Securities Centre system but can be a requirement according to the companies' Articles of Association.
9.	Are all voluntary corporate actions advised through a central mechanism assuring consistent information to all investors?	The depository advises its participants who themselves decide how to advise their customers.
10.	Is information on corporate actions available electronically, and is the minimum lapsed time for responding to such actions sufficient to enable all domestic and foreign investors to respond in a timely and considered fashion?	Information about interest, dividend, redemptions, right issues, and converting of convertibles are electronic. Information about other matters is sent by mail to the participants. The participants are responsible to timely notification of the corporate action events to their customers.