T2S Harmonisation workstream update

Transcription

1 T2S Harmonisation workstream update T2S Advisory Group meeting, Malta Stock Exchange, Malta, 19 June 2013 HSG/T2S Programme Office European Central Bank AG Agenda Item 5.1 0

2 Outline 1 CSDR update HSG Outcome HSG meeting XMAP T+2 taskforce Harmonisation Dashboard

3 2 CSDR update EU Commission proposal in March 2012 ECB Opinion: August 2012 EU Parliament (ECON) adopted revised text in February 2013 CY and IE Presidencies put a considerable effort on the dossier However, a general text will not be adopted by the EU Council in June No trialog possible at this stage. Dossier now is for the LT Presidency semester. If no adoption within 2013, risk of serious delay beyond 2014

4 CSDR update Art Not critical for T2S (and not complete as it stands) According to T2S PO note, further discussions on this provision should not delay the whole CSDR. It could be tackled in SLL Art. 46 is still in the text of the EU Parliament

5 Outline 4 CSDR update HSG Outcome HSG meeting XMAP T+2 taskforce Harmonisation Dashboard

6 5 HSG substructures XMAP group - CASG Cross-Border Market Practices Sub-Group (XMAP) mandate approved HSG substructure (led by Mehdi Manaa) To analyse issues with impact cross-csd settlement efficiency To make proposals to the HSG Met twice already with agenda items: Usage on non-mandatory matching fields CSD Restrictions rules reviewing (pending CSG September deliverable) XMAP will update HSG in October on both items and cc CSG on restriction rules CASG revised mandate: HSG substructure

7 6 Fourth Harmonisation report Outline HSG discussed the outline of the fourth report (publication planned in March 2014) The activities dashboard and the table on monitored activities per market are now incorporated in the Executive Summary The Introduction has been reviewed to provide more background information as well as guidelines for the reader (where to find which information) Conclusions have been added to elaborate on key findings and the way forward An additional annex (Annex 6) has been added about the AG as body in charge of the report (role of AG, member list, link to website) The Harmonisation List remains unchanged, pending the outcome of EPTG, XMAP, CSDR

8 Fourth Harmonisation report Next steps 4 th T2S Harmonisation Progress Report First full draft to HSG on October 2013 Approval by AG on November 2013 Editing Finalisation by HSG/AG in early 2014 Publication foreseen in March

9 Revised definition of Priority 1 vs. Priority 2 Priority 1 activities are necessary to ensure efficient and safe cross-csd settlement in T2S. The HSG and the T2S team should focus first on these activities for resolution and implementation prior to the launch of T2S. Priority 2 activities are not necessary to ensure safe and efficient cross- CSD settlement in T2S but are key for the enhancement of the competitive environment of T2S. These activities can continue to be pursued after the T2S launch. In some cases, the AG, with the help of the HSG and the T2S team, may decide to only monitor progress in these activities at this stage. No longer referring to the successful launch of T2S + more explicit definition of target dates for achieving harmonisation. 8

10 9 HSG outcome T+2 and settlement Discipline As mandated by the February AG, HSG has started to analyse the two topics for T2S markets: Paul Bodart to lead a HSG task force with the aim of coordinating T2S markets migration dates to T+2, independently of the CSDR outcome. Joel Merere to coordinate the work on settlement discipline regime following clarification of current draft of the CSDR text (Art. 7).

11 Outline 10 CSDR update HSG Outcome HSG meeting XMAP T+2 taskforce Harmonisation Dashboard

12 11 HSG work on T+2 (1) Preliminary observations T+2 is now a given: market sentiment has moved from whether to harmonize settlement cycles to how and when to do it Settlement cycle harmonisation to T+2 is in the CSDR and is not debated. CSDR will help pushing all European markets to T+2 However there is still a possibility for CSDR not to be adopted in time for the T2S markets to move to T+2 BEFORE the launch of T2S There is a broad consensus in the markets that the move to T+2 should take place before a market join T2S, in order to reduce risks and complexity. Changing settlement cycles at a market level has been done before and is not considered to be a complex exercise. Technology changes are limited if any. However changing settlement cycles in 20 T2S markets requires coordination and monitoring. Today, there is no clarity as to whom should coordinate the effort.

13 HSG work on T+2 (I1) Preliminary observations On 06/02/13, the AG invited the HSG to explore the topic of T2S best practice on T+2 The HSG discussed the matter on 10/06/13 On Scope: On exchanges/trading platforms vs. OTC transactions. On which securities the new rule should apply (e.g. funds shares?) Current CSDR text sets a deadline for January 2015 to implement T+2, with possible exception. There are three possible ways to move to T+2 across T2S markets: - Big bang move: all T2S markets together - each T2S market moves at its own pace - grouping the T2S markets according to T2S migration waves Market sentiment seems to favour the latest option 12

14 13 HSG work on T+2 (I1I) Proposals to the AG While historically changes in settlement cycles have been principally driven by exchanges and regulators, the criticality of having to implement T+2 before the launch of T2S and the need for cooperation at EU level warrant the T2S program to take a more active role, in the absence of any similar initiative. HSG proposes to set-up an HSG task force composed of all segments of the T2S markets (exchanges, CCPs, CSDs, intermediaries, buy side and sell side) to ensure broad coordination and monitoring of the implementation of T+2 across T2S: - try to establish a migration calendar by waves of markets - Following endorsement of the waves at the AG, HSG to monitor the progress of each market in establishing and implementing a plan to migrate to T+2 - clarify scope of the rules in terms of instruments covered, exchanges versus OTC, exceptions - identify obstacles and possible mitigations

15 HSG work on T+2 (IV) Proposals to the AG HSG Task force to cover primarily the T2S markets; However, non-t2s markets could be invited to attend (as observers) for enhancing a pan European best practice; Task force will report to the HSG and will be lead by Paul Bodart. Paul had previously led the CESAME task force that made the recommendations regarding settlement cycle harmonisation Task Force will not deal with the implementation of the new settlement discipline regime 14

16 Outline 15 CSDR update HSG Outcome HSG meeting XMAP T+2 taskforce Harmonisation Dashboard

17 Harmonisation activities dashboard Status: 19 March 2013_third report 16 ACTIVITIES PRIORITY 1 DEFINITION MONITOR COMPL. 1 T2S ISO messages G G G 2 T2S matching fields G G Y 3 T2S MESSAGES Interaction for registration G Y x 4 Interaction for tax info G Y x 5 Interaction for CSD ancillary services G Y x 6 SCHEDULE OF SETTLEMENT DAY G G Y 7 T2S CORPORATE ACTIONS STANDARDS G G R 8 Settlement finality I (moment of entry) Y x x 9 Settlement finality II (irrevocability of transfer order) G G G 10 LEGAL HARMONISATION Settlement finality III (irrevocability of transfers) G G G 11 Law applicable/conflicts of Law R x x 12 Outsourcing IT services R x x 13 SETTLEMENT DISCIPLINE REGIME R x x 14 SETTLEMENT CYCLES R x x 15 Availability of Omnibus Accounts G G B CSD ACCOUNT STRUCTURES 16 Restrictions on Omnibus Accounts G G G 17 REGISTRATION PROCEDURES Y x x 18 Securities accounts numbering G Y x T2S ACCOUNTS NUMBERING 19 Dedicated cash accounts numbering G Y x ACTIVITIES - PRIORITY 2 DEFINITION MONITOR COMPL. 20 CORPORATE ACTIONS MARKET STANDARDS CA market (CAJWG) standards G G Y 21 PLACE OF ISSUANCE R x x 22 Withholding tax procedures Y x x TAX PROCEDURES 23 Transaction tax procedures Y x x 24 CROSS-BORDER SHAREHOLDER TRANSPARENCY Y x x 25 MARKET ACCESS R x x 26 SECURITIES AMOUNT DATA G G G

18 Harmonisation activities dashboard Status: 12 June ACTIVITIES PRIORITY 1 DEFINITION MONITOR COMPL. 1 T2S ISO messages G G G 2 T2S matching fields G G Y 3 T2S MESSAGES Interaction for registration G G G 4 Interaction for tax info G G G 5 Interaction for CSD ancillary services G G G 6 SCHEDULE OF SETTLEMENT DAY G G Y 7 T2S CORPORATE ACTIONS STANDARDS G G R 8 Settlement finality I (moment of entry) Y x x 9 Settlement finality II (irrevocability of transfer order) G G G 10 LEGAL HARMONISATION Settlement finality III (irrevocability of transfers) G G G 11 Law applicable/conflicts of Law R x x 12 Outsourcing IT services R x x 13 SETTLEMENT DISCIPLINE REGIME R x x 14 SETTLEMENT CYCLES R x x 15 Availability of Omnibus Accounts G G B CSD ACCOUNT STRUCTURES 16 Restrictions on Omnibus Accounts G G G 17 REGISTRATION PROCEDURES Y x x 18 Securities accounts numbering G G G T2S ACCOUNTS NUMBERING 19 Dedicated cash accounts numbering G G G ACTIVITIES - PRIORITY 2 DEFINITION MONITOR COMPL. 20 CORPORATE ACTIONS MARKET STANDARDS CA market (CAJWG) standards G G Y 21 PLACE OF ISSUANCE R x x 22 Withholding tax procedures G Y x TAX PROCEDURES 23 Transaction tax procedures Y x x 24 CROSS-BORDER SHAREHOLDER TRANSPARENCY Y x x 25 MARKET ACCESS R x x 26 SECURITIES AMOUNT DATA G G G

19 18 Thank you for your attention