Sibos news: fears of T2S impact on settlement costs
19 September 2013 Dubai
Image: Shutterstock
Target2-Securities may lead to increased costs, warned a survey from SIX Securities Services.
A survey conducted at the SIBOS conference at Dubai, found that 63 percent believe T2S will increase the costs of settlement services in Europe in the short term.
Only 38 percent believe the implementation of T2S will lower the costs of settlements services in Europe in the long term.
On T2S and CSD consolidation, 88 percent believe T2S will lead to a consolidation amongst providers of settlement services.
Though just 38 percent of respondents are certain their CSD is making adequate preparations for T2S, all respondents believed T2S would help their firm optimise collateral management.
Thomas Zeeb, CEO of SIX Securities Services, said: “The industry continues to be concerned that T2S will increase the costs of settlement services in Europe which is against one of the main aims of the project. Rather than insisting on a new settlement engine, it might have made more sense to tweak existing systems. As all CSDs will have to overhaul their systems, many will choose to pass costs on to their customers."
“However, T2S will provide some tangible benefits, most notably in helping firms improve collateral management processes. With high-quality collateral becoming ever more scarce, this can only be a good thing. T2S also presents an opportunity for the providers of settlement services. Consolidation will inevitably occur as with a single standardised settlement engine, there will be little need for financial institutions to split their business across multiple providers.”
A survey conducted at the SIBOS conference at Dubai, found that 63 percent believe T2S will increase the costs of settlement services in Europe in the short term.
Only 38 percent believe the implementation of T2S will lower the costs of settlements services in Europe in the long term.
On T2S and CSD consolidation, 88 percent believe T2S will lead to a consolidation amongst providers of settlement services.
Though just 38 percent of respondents are certain their CSD is making adequate preparations for T2S, all respondents believed T2S would help their firm optimise collateral management.
Thomas Zeeb, CEO of SIX Securities Services, said: “The industry continues to be concerned that T2S will increase the costs of settlement services in Europe which is against one of the main aims of the project. Rather than insisting on a new settlement engine, it might have made more sense to tweak existing systems. As all CSDs will have to overhaul their systems, many will choose to pass costs on to their customers."
“However, T2S will provide some tangible benefits, most notably in helping firms improve collateral management processes. With high-quality collateral becoming ever more scarce, this can only be a good thing. T2S also presents an opportunity for the providers of settlement services. Consolidation will inevitably occur as with a single standardised settlement engine, there will be little need for financial institutions to split their business across multiple providers.”
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