Clearstream: banks on track for T2S
08 July 2016 Frankfurt
Image: Shutterstock
The vast majority of banks are confident that they’re prepared for implementation of TARGET2-Securities (T2S), according to a survey by Clearstream and Accenture.
Of the banks surveyed, 90 percent said they are ready for T2S, with half of these saying they’re preparations are part of a wider strategy.
Only 10 percent said they are not ready for implementation. The survey suggested that this could be because they have not identified specific risks during the impact assessments, or because they believe they are flexible enough to manage the change.
Although there are various access models to T2S up for discussion, the survey identified a trend towards using either a single point of access or a model with few points of access. The most popular option was connecting through an investor CSD, selected by 40 percent of respondents.
A fifth said they will connect through a custodian and an investors CSD; 10 percent said they will use an investor CSD and an international CSD; and 10 percent said they would use a custodian and an international CSD. The remaining 20 percent said they will connect through all three – a custodian, an investor CSD and an international CSD.
The survey also found that a majority, 65 percent, are not planning any connectivity rationalisation or optimisation either before implementation of T2S or alongside it. The report said this suggests that these activities – and the related costs – are being pushed back to later stages.
It said 25 percent of respondents plan to manage connectivity rationalisation and optimisation at the same time as connecting to T2S, thereby “leveraging resource synergies”, while the remaining 10 percent plan to do this before connecting to T2S.
The report said: “T2S has, to a certain extent, served as a business and technology operating model accelerator for banks, particularly in certain geographies where market reforms have been significant.”
Marc Robert-Nicoud, CEO of Clearstream Holding, said: “The launch of the T2S platform has been a success.”
He added: “Although the market struggled with some delays in the migration timetable, the system now operates in accordance with the schedule.”
Clearstream’s CSDs in Germany and Luxembourg will migrate to the platform in wave four in February 2017.
Of the banks surveyed, 90 percent said they are ready for T2S, with half of these saying they’re preparations are part of a wider strategy.
Only 10 percent said they are not ready for implementation. The survey suggested that this could be because they have not identified specific risks during the impact assessments, or because they believe they are flexible enough to manage the change.
Although there are various access models to T2S up for discussion, the survey identified a trend towards using either a single point of access or a model with few points of access. The most popular option was connecting through an investor CSD, selected by 40 percent of respondents.
A fifth said they will connect through a custodian and an investors CSD; 10 percent said they will use an investor CSD and an international CSD; and 10 percent said they would use a custodian and an international CSD. The remaining 20 percent said they will connect through all three – a custodian, an investor CSD and an international CSD.
The survey also found that a majority, 65 percent, are not planning any connectivity rationalisation or optimisation either before implementation of T2S or alongside it. The report said this suggests that these activities – and the related costs – are being pushed back to later stages.
It said 25 percent of respondents plan to manage connectivity rationalisation and optimisation at the same time as connecting to T2S, thereby “leveraging resource synergies”, while the remaining 10 percent plan to do this before connecting to T2S.
The report said: “T2S has, to a certain extent, served as a business and technology operating model accelerator for banks, particularly in certain geographies where market reforms have been significant.”
Marc Robert-Nicoud, CEO of Clearstream Holding, said: “The launch of the T2S platform has been a success.”
He added: “Although the market struggled with some delays in the migration timetable, the system now operates in accordance with the schedule.”
Clearstream’s CSDs in Germany and Luxembourg will migrate to the platform in wave four in February 2017.
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