T2S: Project update and opportunities for non-european markets

Transcription

1 at SIBOS 2012 T2S: Project update and opportunities for non-european markets Sibos - Osaka, 1 November 2012 Helmut Wacket T2S Programme Office European Central Bank ECB-PUBLIC 0

2 1 Table of contents 1 The European settlements landscape 2 Project update and next steps 3 Opportunities for non-european markets

3 2 The European settlements landscape European Union today: a fragmented infrastructure EUROPE UNITED STATES Trading BME Group Deutsche Bórse Nasdaq OMX Nordic MTFs e.g. Chji-x/ Turquoise LU S.E. Euronext PT, BE, FR, NL London Stock Exchange Borsa Italiana Six Group NYSE MTFs e.g. BATS Nasdaq Clearing Eurex Clearing EMCF Euro- CCP LCH Clearnet SA LCH Clearnet Ltd. Cassa Di Comp Six-x Clear NSCC FICC Securities Settlement & Asset servicing Iber clear Clear stream Banking Frankfurt Clear stream Banking Luxemb. VP CSDx Inter Bolsa Euroclear BE FI FR NL SE UK & IE Monte Titoli SIS DTCC FED Cash Settlement... NCBx SNB Target2

4 3 Future European settlements Landscape One integrated settlement process (domestic and cross-border) Market Participant Market Participant Custodian CSD CSD CSD CSD Market Participant Market Participant

5 4 Table of contents 1 The European settlements landscape 2 Project update and next steps 3 Opportunities for non-european markets

6 5 T2S Community 23 CSDs signed the T2S Framework Agreement representing approx. 100% of settlement volumes in euro. Other CSDs may join later but will have to pay an entry fee. Danmarks Nationalbank signed the T2S Currency Participation Agreement So far the euro and DKK (as of 2018) will be settled in T2S but other central banks may join later.

7 6 New T2S Governance Central Bank Decision-Making Bodies Non-euro central banks governors / boards Governors Forum ECB Governing Council Steering Level Bodies Non-euro Currencies Steering Group (NECSG) T2S Board CSD Steering Group (CSG) Market advisory bodies National User Groups (NUGs) Advisory Group (AG) Technical Groups Operations Managers Group (OMG) ECB Project Managers Group (PMG) Change Review Group (CRG) Reporting Escalation CRG reporting to CSG Technical Groups reporting to T2S Board

8 7 T2S Programme Plan SP5 SP Preparation Phase Specification Phase Development & Testing Phase EAT User Testing Phase (SP7-12) Migration Phase (SP14-16) SP1 SP2 SP3 SP4 SP13 SP17 T2S Go-Live We are here

9 What T2S has delivered so far Legal framework has been defined: Agreements with CSDs and Central Banks have been endorsed and signed by counterparties Technical documentation has been finalised: Mature versions of User Requirements Document, User Detailed Functional Specifications, and Business Process Description have been published Over 80% of T2S software developed and testing is progressing Feasibility assessments by CSDs/NCBs completed Connectivity solution for T2S: SWIFT, SIA/Colt and Eurosystem s existing communication network have been selected as connectivity providers

10 9 Harmonisation in T2S By harmonising settlement, T2S indirectly fosters further alignment of EU market practices Progress is defined in line with T2S stakeholders and other market initiatives The Eurosystem cooperates with market participants and public authorities to align the harmonisation process Q publication of the 3 rd Harmonisation Progress Report T2S is a unique opportunity to facilitate the removal of the Giovannini (and other) barriers

11 10 T2S and CSD Regulation two pieces of the same puzzle T2S CSD Regulation operational dimension + legal/regulatory dimension

12 11 Looking ahead T2S, the CSD Regulation and Harmonisation will create a new European model for securities settlement The new European Model for securities settlement

13 12 Next steps Main issues: Composition of migration waves Change requests and timely preparation of all stakeholders

14 Migration 4 CSDs have committed to migrate in the first migration wave: BOGS (the Greek CSD for government securities); Monte Titoli (the Italian CSD), part of the London Stock Exchange Group; Depozitarul Central S.A. (the Romanian CSD), part of the Bucharest Stock Exchange Group; and SIX-SIS (the Swiss CSD) The composition of the other two waves is currently under discussion 13

15 Change requests and timely preparation of all stakeholders Change requests (CR): The Change Review Group decided in October to proceed with only 4 out of 28 Change Requests (resulting from CSDs feasibility assessments) for detailed assessment to be discussed in December Other change requests have either been discarded or will not be in the first release of T2S Timely preparation of all stakeholders: Completion of Synchronisation point 3 (SP3) (December 2012) marks the mutual assessment and confirmation that the T2S Programme Plan is fully comprehensive and reflects all specifications and planning elements CSDs and Central Banks: Update of feasibility studies following the coordination between the various parties (in particular CSDs and their national markets) and the feedback from the ECB All market participants (NCBs, CSDs and their users) need to prepare themselves for timely and efficient adaptation to T2S (business models and technical adaptation)

16 15 Table of contents 1 The European settlements landscape 2 Project update and next steps 3 Opportunities for non-european markets

17 Opportunities for non-european markets European business today 16 custodian Non-European Intermediary custodian Today multiple routes to European securities markets are needed custodian

18 Opportunities for non-european markets European business in T2S world 17 Non-European Intermediary In the world a single route to European securities markets is possible

19 Opportunities for non-european markets 18 A non-european CSD can connect to T2S directly as a participant in a European CSD participating in T2S The non-european CSD needs to have a CSD link arrangement with a CSD in T2S. The CSD link is a contractual relationship between the two CSDs for holding securities and processing settlement-related activities on securities held in those CSDs. The link arrangement could also allow the European CSD to hold securities deposited in the non-european CSD in T2S.

20 Opportunities for non-european markets 19 Benefits for Non-European Investors Benefits for External CSDs Easy access to the entire European market Broader investment strategies, diversification of portfolios and risk European market becomes more attractive as T2S rationalises the post-trade environment from a technical as well as from an harmonisation viewpoint Simplified remote access to T2S as Investor CSD and External Issuer CSD leveraging the concept of using a single CSD as gateway to pan-european markets Provide access to European markets, and new service offerings for non-european market participants Benefits for non-european Issuers Benefits for non-european intermediaries Easy access to European investors Securities issued outside Europe can be serviced and settled in T2S thereby opening new avenues for raising capital T2S facilitates access to European securities markets and gives different options of access Reduction of access points (down to one) Conditional securities delivery T2S supports external CSD settlement via standard functionality

21 20 Thank you for your attention