The new issue of T2S OnLine is out! In his first editorial as Chairman of the T2S Board, Marc Bayle tells the story of how the idea of creating a pan-European securities settlement platform was born. Mehdi Manaa, T2S Programme Manager, updates us on the final preparations in the run-up to the T2S launch. The Insight article â€śCountdown to T2S launchâ€ť offers a timeline showing the remaining steps until wave 1 CSDs and central banks start live operations on the T2S platform on 22 June 2015. Another article focuses on T2Sâ€™s role as a catalyst for post-trade harmonisation. Finally, we speak with the new members of the T2S Board, who tell us what motivated them to join the T2S governing body.
With T2S going live in less than two months, the T2S Board continues to actively monitor the status and progress of the T2S project. Achieving the different milestones of a project like T2S is a major challenge that the T2S Community has managed to meet so far. The T2S Board would like to extend its warm thanks to the CSDs, central banks and their participants for this success and for their continual support and commitment in this final stretch of the immense infrastructure project.
The most important challenge, the launch of T2S on 22 June 2015, lies ahead of us. The T2S Board stresses its commitment to actively support the preparations of wave 1 participants, with the full mobilisation of the Eurosystem resources, and to resolve any problem that is perceived to be important for the smooth operation of T2S. The progression to the business day testing phase scheduled to begin on 18 May will be an important step. The T2S Board confirms that during the business day testing stage the communities of the first wave can continue their testing activities as normal.
The T2S project is owned and operated by the Eurosystem, with a close involvement of all relevant stakeholders in the governance framework. The implementation of T2S will significantly reshape the post-trade infrastructure in Europe, affecting a wide variety of market players. The governance arrangements in place for the project ensure that the needs and requirements of all stakeholders are taken into account.
Read more about the new T2S governance structure, which has been in place since 1 July 2012. The nomination of members for the CSD Steering Group, the T2S Advisory Group and the Technical Groups is currently on-going, and more information will be provided as soon as it is available.
The T2S Board is a streamlined management body in charge of developing proposals for submission to the Governing Council on issues of strategic importance to T2S. The Board is responsible for the day-to-day management of the project, as well as for relations with stakeholders and the 4CB (Banque de France, Banca dâ€™Italia, Banco de EspaĂ±a and Deutsche Bundesbank). It is made up of members from Eurosystem and non-Eurosystem central banks as well as from the private sector; however, they do not represent their home institutions â€“ rather, they act exclusively in the interest of the Eurosystem and the T2S Programme.
The CSD Steering Group (CSG) is responsible for articulating and coordinating the views of participating CSDs within the T2S governance framework. The CSG can give advice and make resolutions on any issue related to T2S, and in particular on issues related to the Framework Agreement and its schedules, issues of major interest to T2S (pricing, risk, etc.) and the prioritisation of change requests.
The T2S Advisory Group (AG) advises the decision-making bodies of the ECB on both technical and policy issues concerning T2S. From the very start of the project, the AG has been an important forum, enabling all stakeholders â€“ i.e. participating CSDs, banks and national central banks, represented in equal number â€“ to make their voices heard. In particular, the AG addresses T2S issues related to policy, pricing, governance, and harmonisation in the field of securities settlement.
The AG is supported by the substructures listed below, which comprise representatives of national central banks, central securities depositories and other market participants:
Harmonisation Steering Group
Sub-Group on Corporate Actions
Sub-Group Message Standardisation
Task Force on adaptation to cross-CSD settlement in T2S
To support the development and implementation of T2S, the National User Groups (NUGs) bring together providers and users of securities settlement services within their local markets. The NUGs thus form the link between the T2S Advisory Group and the different national markets, and they assess how the latter are affected by T2S.
To support the T2S governance bodies, the T2S Framework Agreement foresees the creation of three sub-structures, or â€śtechnical groupsâ€ť, which are presented below.
The Project Managers Group (PMG): this group, which reports to the T2S Board, is in charge of ensuring that T2S goes live and that all participating central securities depositories (CSDs) and national central banks will be ready on time.
The Change Review Group (CRG): this group, which reports to the CSD Steering Group, is in charge of assessing and preparing change requests.
The Operations Managers Group (OMG) this group, which reports to the T2S Board, is responsible for developing and maintaining the Manual of Operational Procedures.
The Directly Connected Parties Group (DCPG): this group, which reports to the T2S steering bodies, is responsible for tracking and monitoring the resolution of general concerns relevant to directly connected parties.
The T2S info sessions, organised by the ECB on a regular basis, serve to provide all interested stakeholders with information on the progress of the T2S project, as well as to gather feedback from the market on current proposals.
The ECB also organises ad hoc meetings/workshops, to address particular topics or for particular stakeholder categories. These meetings are usually open to all stakeholders and do not fall under the project's governance structure.
T2S will significantly reshape the European post-trading landscape, thus impacting a wide variety of stakeholders. All stakeholders categories are involved in the project to the highest possible extent. more
Central securities depositories (CSDs) will move their securities accounts to the T2S platform for settlement purposes. CSDs will remain responsible for the relations with market participants. Rights and obligations of CSDs towards the Eurosystem will be regulated by the T2S Framework Agreement, a contractual arrangement signed by a first group of 23 CSDs by end of June 2012.
T2S will bring about several benefits for European banks in terms of cost savings, efficiency gains and new business opportunities.
To ensure that T2S fulfils their needs, banks have been involved in the project since its very inception, most remarkably in the definition of the T2S User Requirements. Banks also participate in the governance of the project, both in the Advisory Group and in the National User Groups (NUGs).
T2S will be developed and operated by the Eurosystem on a non-profit basis. The central banks of the Eurosystem are therefore key stakeholders in the T2S project.
The central banks participating in T2S will hold central bank money accounts for CSD customers on the single platform. In addition to the Eurosystem central banks, a number of non-euro area central banks have shown interest in joining T2S. Some of these are also considering the possibility to use T2S for settling securities transactions denominated in their national currencies.
All central banks that have shown interest in T2S participate in the governance structure both at the European and the national levels.
In addition to CSDs and banks, a number of other stakeholders will be affected by T2S. To ensure that they are well informed about the project and have the possibility to flag their concerns, the T2S team of the ECB holds dedicated workshops for funds, issuers and liquidity managers.
All stakeholders are also involved in the T2S Info Sessions organised every quarter in different European locations.
The program contains the core planning of the T2S project. It includes the synchronisation points which need to be achieved for the go-live of the project in 2015. This plan is crucial for the smooth adoption of T2S by all stakeholders. more
The T2S history dates all the way back to 2006 when the Governing Council decided to explore the opportunities of a single settlement platform in Europe. more
Post-trade harmonisation is a key objective for the T2S Community. T2S efforts are primarily focused on core settlement topics. In addition, T2S is triggering harmonisation in many areas, even beyond pure settlement, thus maximising the benefits of a single settlement engine and contributing to financial integration in the EU. more
Harmonisation has been an important work stream of the T2S project since it was conceived, and action has intensified over time under the lead of the Advisory Group and the Harmonisation Steering Group. The focus is now on those harmonisation activities that are essential for a successful launch of the T2S single settlement platform (for example, messaging, operating hours and deadlines and legal harmonisation). more
The T2S harmonisation activities are carried out in close cooperation with the other relevant EU authorities, especially the European Commission. Know more about the main post-trade harmonisation activities in Europe and their impact on T2S. more
One of the crucial workstreams in the current phase of the project is pricing: in particular, how much T2S will charge for standard delivery-versus-payment (DvP) settlement. The ultimate goal is for T2S to be one of the lowest cost settlement platforms in the world.
Being a topic of high interest to all stakeholders, pricing is defined and discussed in close cooperation with the T2S Advisory Group. more
The economic impact assessment of T2S shows how an integrated European post-trading market infrastructure will have positive effects for market participants as well as the European economy in general.
The T2S pricing structure and fee list have been defined on the basis of some principles agreed upon by the T2S Advisory Group.
The T2S pricing structure illustrates how many different settlement service items will be charged for, and what proportion of costs will be recovered by information services, i .e. reports and queries. The pricing structure has been discussed with the market on many occasions.
The ECB Governing Council has decided that the delivery-versus-payment price for T2S will be set at 15 cent per instruction for the period from September 2014, when T2S will go live, to December 2018, on a number of conditions.
The price list shows in detail how much T2S services will be charged.
The Pre-Migration phase for wave 1 has started on 23 March 2015.
The execution of Pre-Migration activities is currently on track.