T2S: Two Years to Launch

Transcription

1 T2S: Two Years to Launch The Strategy of London Stock Exchange for T2S

2 The London Stock Exchange offer for T2S: a flexible and efficient solution Objectives Maximum flexibility and efficiency Guarantee an easy and efficient access to the whole set of functionalities available in T2S Solutions for preserving current infrastructure and minimize impacts Full coverage of asset servicing through SWIFT messages Exploit current interfaces and accounting structures Possibility to choose Monte Titoli as unique access point to all markets Expand the network for a complete markets coverage Supply a comprehensive set of services (fiscal, multi-currency, asset servicing) Client DCP ICP DCP + ICP Page 2

3 For DCPs T2S means: Flexibility and efficiency Access to the whole set of functionalities available in T2S DCP Competitive pricing Possibility of a mixed connectivity model with more functionalities and information not supplied by T2S but available through Monte Titoli Swift/ X-Trm Swift Swift/ X-trn Swift The market approach followed by Monte Titoli allows its clients to act as an aggregation hub on multiple countries and markets Page 3

4 Connectivity options ISO T2S GUI DCP Settlement ISO20022 ISO15022 MT-X ICP/DCP Asset servicing ISO MT-X - MTA2A ICP Settlement ICP/DCP (Pre) Settlement (*) (*) for information not directly available to DCP Page 4

5 Liquidity Management Management of cash in Central Bank Money Corporate actions payments both in T2 and T2S (client choice) Centralised cash management through DCAs for all activity channeled via Monte Titoli Auto-collateralisation on flows facility Cash forecasting

6 LSEG offering on repos LSEG will keep on managing repos (DCP and ICP) Both classic repos and buy sell back will be managed Central engine for the calculation of the accrued interest no risk of mismatch Management of both spot and forward legs Linkage between the two settlement instructions automatically created by LSEG before it is send to T2S Possibility to keep the actual infrastructure flow Page 6

7 Integrated cash management in central bank money Centralisation of liquidity within T2 / T2S Possibility to use a single cash account in T2S to cover all settlement needs Settlement in central bank money for all activities with counterparties connected to T2S Neither split of liquidity nor use of commercial bank money CA proceeds directly in T2 / T2S No further use of domestic payment system Full flexibility for clients in the choice of receiving proceeds (T2 or T2S accounts) Clients may choose for single type of securities whether they wish to receive proceeds in PM account of T2 or in the DCA of T2S Page 7

8 Monte Titoli s pricing principles Investments for T2S project will not be transferred to clients Monte Titoli confirms its commitment to maintain the cost for domestic settlement as it is until the start of the second wave of T2S inclusive of current services Starting from Wave 2, the settlement fees will be reduced and will be applied both to domestic and non-domestic immediately after the entrance of the relevant Issuer CSD in T2S From Wave 2, Monte Titoli will apply a differentiated fee for ICP and DCP, in order to guarantee participants a transparent and tailored pricing, according to the specific needs of the customer Based on official T2S pricing schedule of ECB Page 8

9 Pricing principles in T2S starting from Wave 2 DCP: flat fee for each trade based on the ECB price plus a mark-up for cost recovery ICP: A tiered pricing structure that includes the following services: Enrichment Conversion of ISO15022 in ISO Routing Matching Settlement reporting Queries will not be part of the standard offering Price (*) Pricing in T2S from Wave 2 Current ECB cost Volumes ICP DCP (*) Internal estimate based on T2S offical pricing Page 9

10 Status of the T2S project Page 10

11 Completing the offering for T2S Page 11

12 Pricing principles in T2S starting from Wave 2 Main project streams Coverage of all markets Corporate Actions Fiscal services on foreign securities Triparty collateral management Objective: Offering an unique access point to manage financial securities in T2S before the first migration wave Page 12

13 Market coverage (from 18 to 30) Markets Open Link France ESES investor CSD Germany Investor CSD Austria Investor CSD A wide coverage of all T2S markets and G8 countries will be implemented before the start of T2S Luxembourg (VP Lux) Und. Devel. Investor CSD Finland Indirect via EB Spain Investor CSD Portugal Investor CSD Netherlands ESES Investor CSD Sweden Indirect via EB Belgium NBB Und. Devel. Investor CSD Belgium ESES Investor CSD New markets Open Remaining T2S markets (10) By 6/2015 Japan TBD Indirect Canada 2013 Indirect Link Indirect/Relayed Russia 2014 Investor CSD Greece BOGS Und. Devel. Investor CSD Switzerland (EUR) Investor CSD USA DTCC (FOP) Investor CSD UK &IE (EUR) Investor CSD Euroclear Bank Investor CSD Clearstream Luxembourg Investor CSD Legend T2S countries Extra T2S Page 13

14 Asset servicing: same procedures for domestic and foreign securities Corporate Action Harmonisation & Automation project guarantees some key advantages (to be released phase 1 June 2013 and phase 2 in Q4 2013): Processes and messages currently in use for domestic securities will also be available for foreign securities Introduction of native swift messages ISO15022 and ISO Two separate messages for capital reimbursement and interest payment (when paid same day) All Corporate Actions proceeds paid in T2S Identical processing for each security, irrespective of the country of issue Other Services: Hold & Release to be released in 3Q13 Multicurrency DVP by 4Q13 Page 14

15 Fiscal services: complete coverage Partnership with a major market actor to pursue the following objectives: Supply Relief at Source services in each country where it is allowed by the local jurisdiction Full coverage of all markets Direct management by Monte Titoli of the whole payment process Page 15

16 X-COM: the new Triparty Collateral platform Objective Use of the same pool/securities account to cover different trading needs, financing and collateral Planning Phase 1 (pool Bankit): September 2012 Phase 2 (Markets): Q Simplification in back office Reduced risk Full control on securities portfolio Optimised use of collateral - Full outsourcing of the management of financing operations and collateral - Sophisticated\customised tools to control risks (hair cuts, eligibility criteria, margin calls, concentration limits, close links) - Immediate recall and automatic substitution of securities in collateral - Customised selection of collateral based on rating and size Page 16

17 Why London Stock Exchange - Offering a single point of access for T2S markets for settlement, asset servicing and collateral management - Flexible service model with full T2S functionality - Harmonization and standardization of procedures for all securities in T2S - Partnering with a CSD that operates a low risk process (CBM and Agent Role) - Competitive pricing

18 Contact Us Alessandro Zignani Head of Post Trade Sales Phone: Cristina Belloni Senior Sales Phone: cbelloni@lseg.com Giovanni Costantini Senior Sales Phone: gcostantini@lseg.com David Smith Sales UK clients Phone: d.smith@lseg.com Paolo Carabelli T2S Project Manager Phone: p.carabelli@lseg.com

19 The publication of this document does not represent solicitation, by Borsa Italiana S.p.A., of public saving and is not to be considered as a recommendation by Borsa Italiana as to the suitability of the investment, if any, herein described.this document has not to be considered complete and it is meant for information and discussion purposes only. Borsa Italiana accepts no liability, arising, without limitation to the generality of the foregoing, from inaccuracies and/or mistakes, for decisions and/or actions taken by any party based on this documents. Trademarks Cassa di Compensazione e Garanzia and CC&G are owned by Cassa di Compensazione e Garanzia S.p.A. Trademarks Monte Titoli, X-TRM and MT-X are owned by Monte Titoli S.p.A. London Stock Exchange, the coat of arms device and AIM are a registered trade mark of London Stock Exchange plc. The above trademarks and any other trademark owned by the cannot be used without express written consent by the Company having the ownership of the same. Borsa Italiana S.p.A. and its subsidiaries are subject to direction and coordination of Holdings (Italy) Ltd Italian branch. The Group promotes and offers the post-trading services of Cassa di Compensazione e Garanzia S.p.A. and Monte Titoli S.p.A. in an equitable, transparent and non-discriminatory manner and on the basis of criteria and procedure aimed at assuring interoperability, security and equal treatment among market infrastructures, to all subjects who so request and are qualified in accordance with national and community legislation, applicable rules and decisions of the competent Authorities. Page 19