Events | Capital Markets Forum
● Stakeholder buy-in and communications management
● Training Technology is a key enabler and a portfolio approach should be taken to enhance the business value of IT infrastructure. T2S adaptation can be leveraged to align the IT systems to the target state architecture of the organisation. This could involve a technology refresh, consolidation, retirement or integration of applications. It is important to be conscious of the impact that other regulations, such as MiFIR and EMIR, will be having on the organisation’s technology at the same time. One option being examined by CSDs to minimise the impact on legacy platforms of clients is the support of multiple messaging standards in the initial phase. Another approach by stakeholders could be to develop an integration layer. Leveraging existing settlement infrastructure for T2S adaptation is another area that calls for deliberation. One option is to develop an add-on component for T2S specific processes on top of the existing settlement system. However the merits of this strategy need to be established through a cost benefit analysis. Maintenance of heterogeneous applications (a combination of legacy systems and products/solutions) for multiple geographies is another aspect of technology transformation that will confront stakeholders. Adoption of a multi-tenant, multi-entity solution with a T2S interface layer and standard settlement engine could be one approach. From a programme management perspective it
is interesting to note that around 50% of the time in an IT project is spent on testing and migration. A key challenge for organisations in the T2S adaptation programme is the presence of multiple stakeholders with varying levels of readiness. Testing can be facilitated by developing a test harness for downstream users in the value chain. A test harness is a repository of test cases/scenarios that is accessible by stakeholders, facilitating a level playing field for stakeholders and also enabling the monitoring of progress in the testing phase. From an end-to-end market testing perspective 50-60 scenarios can be developed and deployed
Best Execution | Autumn 2012
for mock sessions. This would enhance the confidence of the stakeholders. Another concept is conformance testing
whereby users of a stakeholder are assessed for readiness and provided dedicated time and environment for testing. For example a CSD may have ten custodians that are in different states of maturity for T2S adaptation. The custodians are assessed individually before the testing is thrown open to all the ten custodians. Very often simulation tools are used for conformance testing. The next challenge is migration, and how
to ensure consistency and reliability of the T2S adapted solution. We would propose the parallel testing approach with pre-T2S environment running along with the T2S testing environment. Migrated data can be utilised for testing towards the end of the testing phase. Another approach is to conduct business-operations testing. This will give organisations the chance to test an entire day of operations with a focus on meeting SLAs, operations schedule and information exchange with external stakeholders. Performance issues, if any, can also be detected.
The T2S initiative is obviously more complex than the Japanese Demat programme and obviously more down to earth than the Moon, Mars and Beyond programme of NASA. But yes – it must take heart from the successful implementation of the Japanese Dematerialisation Initiative, and draw inspiration from the visioning that propels the massive Moon, Mars and Beyond mission.
Panel discussion: The rocky road ahead The panel debate showed that despite the shared vision of T2S among participants there were still some major concerns, around cost and co-ordination particularly. Yvan Timmermans, chairman of the T2S Belgian National User Group (NUG), National Bank of Belgium (NBB) gave the perspective from a central bank on the project. He explained that the
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