Clearstream migration to T2S doubles volumes

Volumes have doubled since migration but legal difficulties remain a concern for Clearstream.
By Joe Parsons

Clearstream has seen volumes on the Target2 Securities (T2S) platform double since its migration earlier this year, however legal difficulties continue to haunt the initiative.

Volumes on the European Central Bank (ECB) settlement platform reached half a million transactions per day, according to Clearstream.

Around 18 central securities depositories (CSDs) have already migrated to T2S, bringing more than 80% of total European volumes on to the platform.

However, difficulties remain for migrating cross-border activity in central bank money onto the platform, Clearstream said in its monthly report.

“The harmonisation objective requires both infrastructure development and a change in market behaviour. T2S migration has not yet translated in market participants changing their model to take full advantage of the T2S benefits,” said Marc Robert-Nicoud, CEO of Clearstream Holding.

Currently, legal barriers still make it complex to hold securities cross-border. This leads to higher costs for transactions and causes uncertainty among investors when exercising their rights abroad.

Clearstream highlighted that measures such as reducing realignment fees charged by CSDs to each other could be essential in encouraging cross-border business to flow through T2S.