SEB Bank has recommended that Norway does not commit to joining the TARGET2-Securities framework within the deadline period, anticipated in the second quarter next year.
SEB believes that VPS' proposed adaptation model to connect to T2S will prevent the Norwegian market from achieving full benefits from European market integration and will require substantial investments in the short to medium term while raising costs, particularly for domestic settlements.
"Weighing these factors together, the banking sector does not recommend that Norway commits to T2S at the present time and recommends that participation is considered at a later stage," wrote SEB in a client note.
VPS, Norway's CSD, has invited market participants to comment by 7 December.
"The Norwegian banking sector broadly supports measures that promote the harmonisation and integration of the Norwegian securities market with a broader set of European Markets. The Norwegian banking sector recognizes T2S as an ambitious and significant contribution to achieving a truly integrated European securities market. In the longer term this development will lead to a more efficient securities market in Europe," wrote SEB.
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