BNY Mellon has revealed the proposed timeline for seeking approvals for its investor CSD is the second half of 2013.
The milestone is part of the launch the launch of its CSD, announced in January this year, amidst regulatory changes affecting the European settlement infrastructure, including CSD Regulations and the TARGET-2 Securities (T2S), the harmonized settlement platform for securities in the eurozone.
BNY Mellon spokesperson Tim Steele said: “Our focus is very much on the ‘here and now’, namely establishing the Issuer CSD. Mindful of the need for further regulatory approvals as we build out, we are proceeding in a measured fashion towards the next phase, which would be Investor CSD status.”
BNY Mellon’s issuer CSD, currently up and running, leverages on the existing settlement, custody and notary functions currently provided by the custodian bank. The Belgium-incorporated CSD is currently clearing the regulatory hurdles relating to the Committee on Payment and Settlement Systems and the International Organization of Securities Commissions’ (CPSS-IOSCO) joint Settlement Finality Directive in order to offer CSD services.
In relation to T2S, believed to be the endgame for BNY Mellon’s CSD, Steele said: “The CSD has opened up new options for us around T2S, and we are exploring those options.”
In a recent video interview with GCTV, BNY Mellon’s executive vice president and global head of Derivatives360, Nadine Chakar, said in relation to the CSD’s plans for T2S: “We’re revising or taking a fresh look at the strategy because the CSD gives us more options than before. We were looking at direct connectivity as one of the options we would have there, but now with the CSD we have other options that we’re looking at and just making sure that we’re making the right strategic decision, and my gut tells and me it will be, as everything we do, an evolutionary process. So we will enter the market in one way or another through T2S and eventually evolve into a CSD, roping the CSD into that discussion at some point. But clearly it is top of mind right now. With the new capabilities at our disposal, we thought it would be good to take a step back and look at it with a fresh pair of eyes.”