The TARGET2-Securities Securities (T2S) project - bnr.ro si prezentari/The TARGET2... · The TARGET2-Securities Securities (T2S) project Bucarest, ... The future landscape with T2S.
Post on 29-Mar-2018
222 Views
Preview:
Transcript
0
The TARGET2The TARGET2--SecuritiesSecurities (T2S) project(T2S) project
Bucarest, 2 Bucarest, 2 OctoberOctober 20020099
JeanJean--Michel GodeffroyMichel GodeffroyDirector GeneralDirector General
Chairman of the T2S Programme BoardChairman of the T2S Programme BoardEuropean Central BankEuropean Central Bank
1
Table Table of contentof contentss
I. Why does Europe need T2S?
II. What is T2S
III. Current status of the project
IV. What are the challenges ahead?
V. Benefits for the Romanian Stakeholders
2
Why does Europe need T2S?Why does Europe need T2S?
• Europe’s securities markets are too fragmented and inefficient.
• Europe needs a single pool of securities to stimulate competition and harmonisation.
• There is no other realistic Europe-wide approach to creating this single pool.
Making Europe a better place to invest and trade (in line with the Lisbon agenda)
NYSE
Trading
Clearing
Cashsettlement
Asset servicing
EURO-NEXT
PT, BE, FR, NL
LCH. CLEARNET SA
LondonStock
ExchangeBorsa
Italiana
MonteTitoli
CassaDi
Comp
NasdaqOMX
DK,SE,FI,IS,
EE,LT,LV
VP
VPC
APK
.
.
.
Securities settlement
SWXGroup
SIS-XClear
SIS
Comparison of the US and Comparison of the US and European post trading landscapeEuropean post trading landscape
BMEGroup
Iberclear
BdE BNBBdF DNB BoE BoI DN SR SP...
SNB
EMCF
MTFs egChi-x/Turquoise
NCBi
UK&IE
EUROCLEARInterBol-sa
FR BE NL
BdPCBIre
NSCC FICC
DTC
FED
NasdaqMTFs
EgBATS
LCH. CLEARNET Ltd
Euro-CCP
CSDi
DeutscheBörse
EurexClearing
Clearstream
Banking Frankfurt
BuBa
Clearstream
Banking Luxemb.
BCL
LUS.E.
4
The The current current landscape of EU settlementlandscape of EU settlement
CSD A
No integrated cross-border settlement process
Market participants
CSD B
CSD C
CSD D
CSD E
CSD x
Custodians
links• 19 CSDs in Euro Area• 2 ICSDs• 16 Other EU CSDs
Custodian s
5
The The future future landscape landscape with T2Swith T2S
TARGET2-Securities
Market participants
Custodians
CSD A CSD B CSD C CSD x
One integrated settlement process (domestic and cross- border)
One technical platform used by CSDs for securities settlement
dire
ct a
cces
s
6
• Settlement in central bank money one of its core functions
• Commitment of the Eurosystem to efficient and integrated financial markets in the EU
• Neutrality of the Eurosystem as a supranational organisation
• Possible facilitator in balancing different requirements
• No own economic interest, cost recovery principle
• TARGET and TARGET2 experience in successfully designing and implementing Europe-wide infrastructures
Why Why isis the the EurosystemEurosystem suited to run T2S?suited to run T2S?
7
Table Table of contentof contentss
I. Why does Europe need T2S?
II. What is T2S
III. Current status of the project
IV. What are the challenges ahead?
V. Benefits for the Romanian Stakeholders
8
What is What is T2ST2S?? -- A cooperation A cooperation between CSDs and NCBsbetween CSDs and NCBs
TARGET2CENTRAL BANK
MONEY
VALIDATION and MATCHING
SECURITIES
OPTIMISATIONof
SETTLEMENT
SETTLEMENTand
REALIGNMENT
T2S
CENTRAL BANK MONEY
CSD A
CSD B
CSD C
NCB A
NCB BNCB B ACCOUNTS
NCB A ACCOUNTS
NCB CCENTRAL BANK
MONEY
NCB A ACCOUNTS
Other RTGS
TARGET2VALIDATION and MATCHING
SECURITIES
OPTIMISATIONof
SETTLEMENT
SETTLEMENTand
REALIGNMENT
CENTRAL BANK MONEYSECURITIES
OPTIMISATIONof
SETTLEMENT
SETTLEMENTand
REALIGNMENT
SECURITIES
OPTIMISATIONof
SETTLEMENT
SETTLEMENTand
REALIGNMENT
CENTRAL BANK MONEY
CENTRAL BANK MONEY
NCB B ACCOUNTS
NCB A ACCOUNTSCSD A
CSD B
CSD C
CSD A
CSD B
CSD C
CSD A ACCOUNTS
CSD C ACCOUNTS
CSD B ACCOUNTS
NCB A
NCB B
NCB A
NCB BNCB B ACCOUNTS
NCB A ACCOUNTS
NCB CCENTRAL BANK
MONEY
NCB A ACCOUNTS
Other RTGS
NCB C ACCOUNTS NCB CNCB C ACCOUNTS
Other RTGS
CENTRAL BANK MONEY
CENTRAL BANK MONEY
Bringing on one technical platform all securities and cash accounts to settle all securities transactions
9
• T2S will be a single IT platform enabling settlement of securities in central bank money in the euro area/EU/EEA.
• CSDs will delocalise their securities accounts to T2S, which will perform the processing of their settlement instructions on these accounts.
• CSDs will keep their customer base and continue to perform non-settlement related functions (e.g. issuance, corporate actions, custody, etc.).
• Settlement in commercial bank money is out of the scope of T2S
WhWhatat isis T2S? T2S? –– A new conceptA new concept
10
Volume-based
More commoditised
Closer to central bank expertise
Benefits from achieving a single pool of liquidity/collateral
Settlement fees (in particular CSD component) not the largest chunk of the costs, but cross-border fees are high
SettlementSettlementT2ST2S
Custody/Corporate eventsCustody/Corporate eventsCSDsCSDs
Value-based
More innovation / calls for harmonisation
Less central bank involvement (in particular for equities)
Large cost-saving opportunities
Scale Competition
What is the economic logic?What is the economic logic?
11
T2S concerns only the settlement function of CSDs!T2S concerns only the settlement function of CSDs!
Registration of issuer indebtness and investor holdings
Change of ownership among investors
Notary function
Custody and asset-servicing
functionSettlement
function
Banking function**only in some (I)CSDs
e.g. coupon payments, redemptions, stock splits
e.g. lending and borrowing
issuer / investor
buyer / seller
lender / borrower
What is the scope of T2S?What is the scope of T2S?
Type of intermediation
12
CSD
Custody
Other…
ReportingLending
Coll. Mgmt
Settlement
CSD
Custody
Other…
ReportingLending
Coll. Mgmt
T2S
Settlement
Today
T2S world
CSD
Custody
Other…
ReportingLending
Coll. Mgmt
Settlement
CSD
Custody
Other…
ReportingLending
Coll. Mgmt
What is What is T2ST2S??IIt is a service to CSDst is a service to CSDs, not a CSD., not a CSD.
13
Settlement function
Custody function
Notary function
GovernmentSecurities(incl. agencies)
Equities, corporate bonds, …
1 432 5 6
All types of securities
DTC
CEurosyste
mT2SSettlement
function
Custody function
Notary function
Fedw
ireS
ecur
ities
Ser
vice
CSDs
What is What is T2ST2S??Comparison with the USComparison with the US
A new concept
14
Table Table of contentof contentss
I. Why does Europe need T2S?
II. What is T2S
III. Current status of the project
IV. What are the challenges ahead?
V. Benefits for the Romanian Stakeholders
15
We are in the specification phase until We are in the specification phase until Q1 2010Q1 2010
Feasibilitystudy
July 2006Launch of
the concept
March 2007Feasibility of
T2S concluded
User requirements phase
December 2007Launch of publicconsultation on
User Requirements
April/May 2008Revision of
User requirements and offer to CSDs
July 2008Decision tobuild T2S
following CSDs’letters of intent
Specificationphase
Development phaseTesting and
migration phase Operational phase
2013envisaged
Go-live of T2Sand
Framework Agreement
2010/2011
1Q2009GFS 1.0
3Q2009MoU
Specificationphase
2010UDFS
16
T2S Specification phaseT2S Specification phaseFinalisation of technical documentation• The User Requirements Document (URD) which defines
the features that the market requires from T2S has now been largely “frozen”.
• The final version of General Functional Specification (GFS) which provides the system design published in November 2009.
• The User Detailed Functional Specification (UDFS) published in Q1 2010
Contractual arrangements with CSDs• 28 CSDs signed a Memorandum of Understanding
• Preparation of formal contract to be signed in first half 2010
17
Subgroup on user
requirements management
National User Groups
Advisory Group
Subgroup on message
standardisation
Subgroup on testing
and migration
Subgroup on
process efficiency
Subgroup on
contractual issuers
Subgroup on
corporate actions
Information Sessions with all Stakeholders
ECB Governing Council
Executive Board PSSC
T2S T2S GGovernance: First phase of the projectovernance: First phase of the project
T2S Programme Board
Since May 2009 a new Eurosystem body
manages the project, reporting to
Governing Council
Subgroup on
operational framework
18
T2S programme BoardT2S programme Board• Composition
- 8 members (including two former CEOs of CSDs) and 4 alternates
• Objective- To ensure the Eurosystem delivers T2S on time, within budget and
according to market needs
• Important principles- Represent the interests of the T2S project and the Eurosystem (and not
of their own institution)
- Governing Council remains ultimate decision-maker
- T2S Programme Board is supported by the T2S Project Team
• Responsibilities- Preparation of strategic Governing Council decisions, daily
management of T2S Programme and reporting, managing relations with 4CB/CSDs/other external stakeholders, validation of 4CB deliverables
19
External governanceExternal governance• T2S Advisory Group is currently the only external
governance forum
• Future external governance arrangement needs to take into account- The role of the T2S Programme Board
- Future contractual relations between CSDs and the Eurosystem
External governance needs to be adapted for Development Phase (starting Q1 2010)
20
Future external governanceFuture external governance• New forum for bilateral discussions between CSDs
and the Euroyststem- To the prepare the Contractual Agreement for the
Development Phase and the Framework Agreement for the Operational Phase
- To discuss policy as well as technical matters of common concern
• Future role of the Advisory Group- Many aspects still to be settled (mandate, composition,
reporting lines etc)
21
Table Table of contentof contentss
I. Why does Europe need T2S?
II. What is T2S
III. Current status of the project
IV. What are the challenges ahead?
V. Benefits for the Romanian Stakeholders
22
TheThe next stepsnext steps
Technical documentation• URD, GFS, GTD and UDFS
Legal• T2 Guideline• Preparation of contractual arrangements between Eurosystem and
CSDs
Pricing structure• Analysis of Total Cost of Ownership, volume estimates and the
resulting price structure
Governance• Establishment of a forum for bilateral CSD-Eurosystem discussions,
and adaptation of the Advisory Group
23
• Building T2S- On time: 2013 at the latest
- Within budget
- According to market needs (User Requirements: >800 pages)
Future challengesFuture challenges
24
Table Table of contentof contentss
I. Why does Europe need T2S?
II. What is T2S
III. Current status of the project
IV. What are the challenges ahead?
V. Benefits for the Romanian stakeholders
25
T2S benefits for Depozitarul Central S.A and NBR
• T2S provides:
- a core, neutral and technically advanced infrastructure supporting various CSD business models in a pan-European operational framework
- the possibility to avoid huge investments to meet new technical and business requirements
- a state-of-the-art business continuity concept
- economies of scale at a European level
• T2S offers new business opportunities:
- beyond domestic borders and across all EU/EEA countries
- to focus on value-added products and services
26
T2S benefits for Romanian custodians• Reduced settlement fees stemming from economies of
scale and increased competition among CSDs.• Back-office cost savings from harmonised single
settlement process for all European securities and settlement centralisation with one single CSD.
• Single pool of collateral and liquidity, accessible in real- time.
• New business opportunities.
27
T2S benefits for Romanian issuers• Main benefit: lower fees from
- increased competition,
- European harmonisation, and
- cost reductions at CSD and custodian level, in particular for cross-border business
• Simpler management of multiple shareholder bases;
• Opportunity to reach a wider investor base for equities, bonds, commercial paper, etc.
Reduction in cost of capital
28
T2S benefits for Romanian investors
• Main benefit: lower fees from:
- increased competition,
- European harmonisation and
- cost reductions at CSD and custodian level, in particular for cross-border business
• Possibility to manage a diversified securities portfolio across Europe through one single CSD at low cost.
Increase in return on financial investments
30
TheThe fivefive big winsbig wins of T2Sof T2S• Making cross-border settlement fees as
inexpensive as domestic fees
• Reducing users´collateral/liquidity needs
• Harmonising settlement to make Europe a true Single Market
• Create new opportunities for competition
• Market users will only need an account at one CSD to settle any transactions in securities within T2SThe Eurosystem and the market believe in T2S and
are ready to take the challenge and invest in it.
top related