Unbundled fees is biggest obstacle of T2S 04 December 2013London Reporter: Georgina Lavers
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Half of respondents to a survey on TARGET2-Securities said that the cost of compliance was what concerned them most about the settlement engine.
Post-trade service provider SIX Securities Services released the results of a survey of fourteen major financial institutions looking at T2S and the evolution of the European settlement landscape.
While half feared cost most, forty-one percent of respondents considered the challenge of overhauling IT systems to be their biggest worry.
One respondent said that the cost of unbundled asset servicing was what troubled them the most. Another said: “My major worry is that custodians are still referencing T2S as if it is a standalone consideration for clients. This is simply not the case for clients seeking a full service model. T2S, or settlement standardisation, is just one of many developments impacting the market in the 2015-2017 timeframe.”
Robert Almanas, managing director of international services, commented: “Make no mistake—financial institutions should not approach T2S as a mere compliance project. T2S needs to be considered as part of the whole wave of regulatory changes affecting the financial markets over the coming years. For example, T2S is an opportunity for financial institutions to optimise capabilities such as collateral management and cash management which are becoming much more important under other pieces of regulation.”
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