T2S will open up the European securities market for banks, making it more efficient and easily accessible. Benefits for market participants will range from the significant reduction of settlement fees for domestic and, above all, cross-border transactions, to the possibility to cut back-office costs by streamlining interfaces and centralising settlement activity. T2S will also lead to efficiency gains, enabling the banks to optimise their collateral and liquidity management. Moreover, T2S will provide new business opportunities for European banks and grant them access to new markets for asset-servicing.
Further benefits for the European banking community will derive from the harmonisation of market practices brought about and fostered by T2S.
To ensure that T2S meets their needs, banks have been involved in the project since its very inception. In particular, they substantially contributed to the definition of the T2S User Requirements [7.84 MB].
In terms of project governance, banks are represented both at the European level, in T2S Advisory Group and its substructures, and at the national level, in the National User Groups National User Groups (NUGs). Via the NUGs banks can actively contribute to the T2S project and respond to market consultations. Banks are constantly kept updated about T2S and are directly involved in the discussions through the T2S Info Sessions, the T2S "Technical Dialogues" and other events and workshops organised by the ECB and open to all interested stakeholders.
In T2S, all banks will maintain their business and legal relationships with the respective CSDs and will be able to settle all transactions through potentially one single CSD, with a consequent rationalisation of systems and resources.
From a technical perspective, banks also have the possibility, in agreement with their CSD, to become DCPs in T2S, i.e. to establish a direct network connection to the platform. The direct connectivity solution is expected to be appealing to big custodians with multiple CSD relationships as well as to large investment banks. Banks that opt for direct connectivity are represented in the Directly Connected Parties Group (DCPG).
In December 2011, following a tender procedure, two T2S Value-Added Network Service Provider licences were awarded: one to SWIFT and one to a consortium composed of SIA and Colt. The two Licence Agreements have been signed and SWIFT and SIA/Colt are now working on their connectivity solutions for T2S. more