Frankfurt
06 February 2017
Reporter: Mark Dugdale

Clearstream migrates to T2S


Clearstream Banking Frankfurt has confirmed that it successfully migrated to the Target2-Securities (T2S) platform over the weekend.

The fourth migration wave between 3 and 5 February was an important one for the European securities settlement project, with 40 percent of its overall volume beginning its first day on the platform today.

The central securities depositories (CSDs) of Slovenia and Slovakia were also expected to migrate during the fourth wave, although it’s not clear if they were successful.

Clearstream said in a statement: “Following the migration, Clearstream will allow all its customers to leverage the benefits of direct access to T2S while enhancing its operational model.”

“This model will provide customers with opportunities for cash and securities pooling throughout Europe as well as harmonised collateral management services from a single platform. Supported by local partners, Clearstream’s customers will also benefit from enhanced asset servicing.”

With Clearstream successfully migrated to T2S, the platform now has more than 80 percent of its expected volume.

The third wave of participants successfully migrated to T2S in September 2016.

Euroclear’s Settlement of Euronext-zone Securities (ESES) CSDs—those in Belgium, France and the Netherlands—along with VP Securities in Denmark and VP LUX in Luxembourg, took the platform to 45 percent of its expected volume.

The third wave represented the halfway point of the migration programme, intended to improve efficiency in in cross-border settlement in Europe. The first wave of CSDs went live on the platform in June 2015, while wave two went ahead without a hitch in March 2016.

The Euroclear ESES CSDs were originally scheduled to join the platform in the second wave, but delayed the move, citing early processing challenges and requesting more time to prepare.

The project is scheduled to be completed with a final wave in September 2017.

Tom Casteleyn, head of product management for custody, cash and foreign exchange at BNY Mellon, said the successful weekend put to bed any concerns raised in fourth-wave market testing “that caused some institutions to question the benefits T2S will deliver”.

Casteleyn said: “With most major CSDs now directly connected to T2S, it is time for the industry to focus on realising the settlement efficiencies and collateral management opportunities the new market infrastructure offers.”

“Equally, we should not lose sight of the fact that some of the markets that have already converted to T2S have not yet fully conformed to the T2S harmonisation standards. Most of these loose ends relate to corporate actions and market claims, and need to be tied up in order to generate some of the project’s expected efficiencies.”

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