T2S goes live after nine years – without Italy
Target2-Securities, the European Central Bank project to harmonise Europe’s post trade infrastructure, has finally gone live after nine years of preparation. Italy’s Monte Titoli was not part of the first wave.
At launch, the central securities depositories in Greece, Malta, Romania and Switzerland are part of the first wave; Italy’s CSD Monte Titoli was originally scheduled to go live on 22 June but delayed implementation at the last minute. Italy is now expected to launch T2S at the end of August.
“[We] have been involved in the change processes and implementation of T2S from day one,” said Thomas Zeeb, division chief executive at Swiss CSD SIX Securities Services. “Being part of T2S is part of our continuing strategy to enhance the Swiss value chain.”
Begun in 2006, T2S was conceived as a means of driving European integration. Mario Draghi, president of the ECB, has described T2S as the necessary platform for setting up a single European market for securities services. The purpose of T2S is to harmonise cross border settlements in Europe, increasing efficiency in European financial markets. Switzerland’s SIX Securities Services is the first non-EU central securities depository to offer access to T2S.
There are only two ways to connect to T2S; either via Swift’s Value Added Network Solution or through Italian payment services company SIA and its partner Colt. However, many smaller banks will connect to T2S indirectly through a larger institution. For example, in February four banks, Banco di Credito Popolare, Banca Popolare dell’Alto Adige, Banca Popolare di Vicenza and Veneto Banca, signed a deal with custodian bank BNP Paribas to use its custody, settlement and liquidity services for T2S. BNP Paribas specified it will connect to T2S itself via Swift.
The second wave of T2S is scheduled for the end of March 2016 and is expected to consist of the Euroclear Eses CSDs in France, Belgium and the Netherlands, plus Interbolsa and NBB-SSS in Belgium for fixed income. All remaining European central securities depositories are due to migrate to T2S by February 2017.