Italy live on T2S (at last)
Italy is now live on T2S
Target2-Securities, the European Central Bank project to harmonise Europe’s post trade infrastructure, has finally gone live in Italy – three months after Italy’s last-minute decision to drop out of the first wave earlier this summer.
Monte Titoli, the Italian central securities depository, joins CSDs in Greece, Malta, Romania and Switzerland which were part of the first wave; Monte Titoli was originally scheduled to go live on 22 June but delayed implementation at the last minute. The migration on 31 August 2015 “proceeded smoothly”, according to Monte Titoli, with most activities being completed ahead of schedule.
“Italy’s inclusion will provide immense value to the global asset management industry that transacts in Italian assets,” said Kashyap Kapasi director of strategic solutions, investment services at financial services technology company Fiserv. “Italy is the third largest economy in the Eurozone and attracts significant cross border investment flows. T2S helps manage settlement data more efficiently and the new settlement mechanisms will function seamlessly, yielding greater straight through processing. The new and automated process is expected to greatly increase efficiency as well as promote the availability of more diverse sources of funding for the real economy.”
Begun in 2006, T2S was conceived as a means of driving European integration. Mario Draghi, president of the ECB, has described T2S as the necessary platform for setting up a single European market for securities services. The purpose of T2S is to harmonise cross border settlements in Europe, increasing efficiency in European financial markets. Switzerland’s SIX Securities Services is the first non-EU central securities depository to offer access to T2S.
There are only two ways to connect to T2S; either via Swift’s Value Added Network Solution or through Italian payment services company SIA and its partner Colt. However, many smaller banks will connect to T2S indirectly through a larger institution. For example, in February four banks, Banco di Credito Popolare, Banca Popolare dell’Alto Adige, Banca Popolare di Vicenza and Veneto Banca, signed a deal with custodian bank BNP Paribas to use its custody, settlement and liquidity services for T2S. BNP Paribas specified it will connect to T2S itself via Swift.
The second wave of T2S is scheduled for the end of March 2016 and is expected to consist of the Euroclear Eses CSDs in France, Belgium and the Netherlands, plus Interbolsa and NBB-SSS in Belgium for fixed income. All remaining European central securities depositories are due to migrate to T2S by February 2017.
