T2S – the pan European settlement platform
TARGET2-Securities (T2S) represents one of the single most significant changes to the landscape of financial markets in Europe. The pan European securities settlement platform offers centralised settlement in central bank money across all T2S markets.
T2S is eliminating the barriers and differences that previously characterised the fragmented nature of markets in Europe. This single market infrastructure solution is bringing domestic and cross-border settlement much closer together.
The implications that T2S would have on the market were examined in a joint study between Accenture and Clearstream, published in July 2016. In addition, Marc Robert-Nicoud, CEO of Clearstream Holding, gave his thoughts on the matter:
Following our migration to T2S in February 2017, we have been enhancing our service offering by developing solutions for our customers to be able to settle in commercial and central bank money via one single platform in Europe.
Our T2S value proposition is a result of our efforts to harmonise connectivity channels, streamline our custody network and improve asset servicing and collateral management services.
In February 2017, Berthold Kracke, CEO of Clearstream Banking Frankfurt, gave his thoughts on Clearstream's migration to T2S, in what was a significant milestone for the industry.
Clearstream is actively seeking new and innovative ways in which to help market participants reduce the complexity and costs of their market connections by providing a centralised access point to the T2S, international and global markets.
Our enhanced integrated T2S offering spans the issuer, investor, and international CSD (ICSD), that is, settlement in commercial and central bank money via one single platform.
Migrating to T2S has provided us with a host of new opportunities that previously were simply not technically possible.
Phil Brown, Co-CEO of Clearstream Banking, gave his insight in March 2017, about what Clearstream's advanced offering around T2S is and how customers can benefit from our integrated service suite.
We have tangible examples evidencing that our solutions are helping customers to achieve their business needs in this new environment.
By switching on OneClearstream for asset servicing we also go live with so much more, such as multi-market, multi-money quality and collateral management services
Phil brown explains in his blog from April 2018 how T2S has enabled us to deliver the first fully-fledged investor CSD solution of the T2S era.
Now with T2S, we have been presented the perfect opportunity to take the automatic mobilisation of collateral to the next level!
In November 2017, Philippe Seyll, Co-CEO of Clearstream Banking, highlighted how T2S is revolutionising the way in which we do securities lending and collateral management.
OneCMS
Our OneClearstream collateral management service (OneCMS) went live in November 2017, following the first successful collateral allocation on behalf of a customer.
OneCMS is an integral part of the OneClearstream offering; a single collateral management system capable of managing customers' collateral pool across CSD and ICSD accounts.
OneCMS represents a highly significant phase of what we want to achieve, where assets held at CSD level can be automatically mobilised and serve the customer’s collateral management activity at the ICSD.
ASL principal
T2S provided us with the opportunity to explore new avenues to pool CSD and ICSD liquidity across asset classes for securities lending purposes.
ASL principal was launched in July 2017, and enables customers to borrow or lend from a single pool of securities regardless of their settlement or custody location.
The ASL principal service complements Clearstream’s existing ASL and ASLplus services.
While T2S provides harmonised settlement across over twenty European markets, to fully leverage the possibilities of this integration it needs to be complemented with high quality asset servicing. With the help of key local partners, Clearstream is implementing a win-win asset servicing model for the T2S market environment.
Clearstream is rolling out its new asset servicing partnership model to offer the best possible asset services for settlement in the T2S environment. Our asset servicing model marries the expertise of all parties involved and allows customers to enjoy the best of both worlds through Clearstream: Settlement in both commercial and central bank money on the T2S platform with local expertise for asset servicing via our local partnerships.
The first markets are already going live with our new asset servicing model, with more to follow over the course of 2018 and 2019. Representing the successful implementation of our T2S strategy, we have invested heavily in order to build further on the basic Investor-CSD offering, and enhance it with additional Clearstream added-value services.
We’re in continuous dialogue with our customers as we try to develop innovative T2S-based solutions with them. In October 2017, we announced a long-term cooperation with dwpbank with the goal to maximise the benefits from T2S.
Clearstream’s post-T2S model allows dwpbank to fully profit from the advantages that T2S offers from settlement and asset servicing to improved liquidity and collateral management.
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If you’re interested in more detailed information then check out the OneClearstream and TARGET2-Securities sections of our website.
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