19 September 2017
Reporter: Stephanie Palmer

Ten-year T2S saga comes to an end

The Target2-Securities (T2S) pan-European harmonised settlement platform is finally fully operational, as the Spanish and Baltic markets completed their migration yesterday.

Spain’s Iberclear moved to the post-trade system, along with the central securities depositories in Estonia, Latvia and Lithuania, bringing the ten-year project to completion.

The T2S platform will now settle an average of 550,000 transactions per day, according to the European Central Bank (ECB).

Wave four of the project was completed successfully on 6 February, with the addition of Clearstream Banking in Germany bringing the platform to 80 percent of the final expected volumes.

Speaking to the ECB in a MIP Online report, Indars Ascuks, associate vice president and head of the Baltic markets at Nasdaq, said: “Thanks to its interconnectivity, T2S makes cross-border settlement easier and more efficient, ensuring more integrated and cost-effective securities trading and post-trade services.”

“We believe these changes will create valuable synergies for market participants, as T2S enables Baltic assets to be brought into the European pool and also makes foreign securities more accessible to Baltic investors. This will lead to an optimised market infrastructure and new business opportunities, meaning more efficiency and fewer risks to investors.”

An Iberclear statement also noted that the move will allow Spain’s post-trade system to be aligned with the rest of Europe, and will “increase its efficiency, optimise costs and enhance its competitiveness”.

Iberclear CEO Jesús Benito told the ECB: “Links with T2S CSDs—which before migrating were complicated—have suddenly become delivery-versus-payment links that are fully harmonised with domestic settlement procedures. We believe this is an opportunity that Iberclear has to take advantage of for the sake of its current clients.”

The ECB now plans to liaise with the market to assess the functioning of the new system over the next few months.

In October 2018, settlement for the first non-euro currency is expected to become available on T2S, with Danish CSD VP Securities, which migrated in wave four on 6 February, settling Danish kroner.

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