The salient characteristic of the Danish custody market is stability, local banks say, although international players are winning some institutional mandates.

The major player is Den Danske Bank which estimates it has 75-80% of the international market with Unibank estimating that it has 33%.

Den Danske holds Dkr597,204m within Denmark for all clients and Dkr86,027m outside Denmark for domestic clients. The respective figures for Unibank are Dkr381,576m and Dkr59,000m.

A well regulated and seamless market like Denmark does not create grounds for changing agent very often, as foreign banks and brokers tend to concentrate on markets where they experience difficulties," says Annelise Raahauge, client relations manager at Unibank.

Ulla Hoyer, vice president at Den Danske Bank in charge of sales and marketing for custodian services, says the Danish market is very developed and as such she does not expect it to change significantly, "and as the main custodian bank we have adapted to developments initiated by the central securities depository (CSD)." The CSD will move to delivery versus payment next month.

As for other developments, Unibank believes that moves towards remote membership of Scandinavian stock exchanges - with Stockholm and Copenhagen initially joining forces - will see a more liquid market with increased demand for clearing facilities.

The demand for value-added services depends on the client. "Value added services are required by institutional investors while international banks and brokers require a high level of automation, SWIFT messages employed in the 500 series and tailor-made reporting and services. We are automated in almost all the 500 series," says Hoyer.

Unibank has noted a demand for securities lending, performance measurement and cash management but the former is precluded by tax. Unibank provides cash management and will offer performance measurement in conjunction with the introduction of straight through processing.

International competition comes from Euroclear in internationally traded bonds, while other international institutions have targeted the larger pension funds.

Toni P Jensen, marketing director Scandinavia at State Street Bank in Copenhagen, says: "We have seen a trend in the last year or two where players like ourselves are getting custody business out of larger Danish institutional clients." This, he adds, has mainly been pure custody rather than accounting and administration."