Events | Capital Markets Forum
ECB Governing Council decided to discontinue the preparations for CCBM2 (Correspondent Central Banking Model). Therefore each NCB will provide the eligible assets and valuation list (for auto- collateralisation) to T2S individually. T2S will not be negatively impacted by this discontinuation. He said NBB will connect to T2S indirectly via its CSD as, like most central banks, NBB does not have the volume to justify a direct connection. He highlighted two Belgian specificities. First, the NBB-SSS will probably not have a business case to set up links with the other T2S CSDs. Second, the other Belgian CSD, Euroclear Belgium, is not a Eurosystem-eligible CSD for receiving collateral as it mostly deals with equities that are not Eurosystem- eligible securities. Consequently, only eligible assets issued in NBB-SSS will be usable for auto- collateralisation by Belgian settlement banks. James Cunningham
from the European Market and Regulatory Initiatives at BNY Mellon Asset Servicing noted that national specificities were a risk to blocking the achievements of a homogeneous system.
He said, “What we want is a homogenous settlement process as a precondition to T2S; if we don’t have it, then afterwards we are in the same position as today.”
Marc Tibi, head of market infrastructure at BNP Paribas Securities Services said, “We are worried that although we have one single European project called T2S, we do not have one single provider; we have 22 projects, each being handled domestically so the banks have to invest in and deal with 22 projects. That is not intelligent.” Alex Dockx, T2S
programme manager at J.P. Morgan Worldwide Securities Services said that his firm’s
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analysis as a user of CSDs was that cost saving existed in the long term with costs incurred in the short-term.
The CSDs on the panel said that they were moving ahead. Jean-Luc Fripiat, director of product management at Euroclear CSDs and Group Services, which has seen four of its group’s seven CSDs sign up, asserted, “There is a strong willingness to join T2S. It will
harmonise market practices, lift a lot of technical and legal barriers to have a harmonised solution on Europe.”
He added: “There will be a move to an unbundled service model and we at Euroclear are delivering services already for collateral management and asset servicing as well.” Italian CSD Monte Titoli has begun to develop new services, seeing T2S as an opportunity to become a global post-trade services provider. It has signed up in the first wave of CSDs, committed to testing in mid-2014 and going live in June 2015. Alessandro Zignani, general manager at Monte Titoli said, “We won’t increase our pricing for T2S to minimise the impact on our community. From a technical and
organisational point of view we are organising training with our user group, explaining what
T2S is; small and medium size banks are not aware of the full impact.” BNP Paribas’ Tibi observed that by developing solutions to T2S separately CSDs were creating significant additional costs. “Monte Titoli said that it is looking at costs of €15 million to adapt to T2S, but Euroclear and
Clearstream say costs are in the region of €80- €90 million. Of course there could be some volume effects but not to the tune of €75 million. Why have several CSDs separately developed a GUI? Our suggestion is that CSDs should be made to share their viewpoint and best practices.” ■
Best Execution | Autumn 2012
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