Deutsche Bank, Euroclear and Northern Trust have launched TARGET2-Securities (T2S) solutions to their services.
The launch is the first large-scale T2S mandate announced in the market.
The collaboration is based on a new operating model in securities services, where the traditional value chain is delivered by the integration of global custody, central securities depositories (CSD), and asset servicing agents into a single offering.
In this first live operation for the French market, Northern Trust, as a global custodian, performs settlement and provides central bank funding.
Euroclear, as an issuer CSD, offers a single CSD account structure, as well as access to tri-party services, whereas, Deutsche Bank offers local connectivity, asset servicing and end-to-end reconciliation.
T2S harmonises the cross-border settlement of securities for select markets in Europe and allows participants to settle securities in central bank money and delivery versus payment in European markets.
According to Deutsche Bank, this launch demonstrates how such component-based modular solutions can reshape the operation of post-trade service landscape of Europe.
Graham Ray, head of securities services and product management at Deutsche Bank, said: “This launch is a significant milestone on a journey towards collaborative business models within the European post-trade landscape, the smarter custody product solution has involved a platform and operating model change to deliver component based client products that meet those institutions unique set of challenges given the changing landscape and understanding of their needs.”
Peter Cherecwich, president of corporate and institutional services at Northern Trust, commented: “The collaboration enables us to achieve efficiency benefits for our clients through a consolidated settlement platform and central bank funding across European securities markets.”
Edwin De Pauw, managing director and European head of product management at Euroclear, added: "This joint effort is a significant step in achieving the end goal of T2S, reducing market fragmentation and creating a single integrated settlement model. Our investor CSD offering and open architecture structure allow market participants to consolidate, optimise and more efficiently assign their European securities inventory whilst selecting their preferred asset servicing and collateral management provider.”
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