Clearstream has released its pricing model for TARGET2-Securities (T2S), the central pan-European platform for national cross-border settlement of securities in central bank money.
The model attempts to address concerns on T2S customer fees and implementation costs ahead of the T2S implementation date in June 2015. Clearstream said its basic principle is to keep both domestic and cross-border settlement costs at the German CSD as low as possible and to offer customers planning security in T2S cost-related questions.
As such, Clearstream will pass on the settlement fee of the European Central Bank to its existing and future customers without adding any margin and without charging any settlement fee on its own.
Clearstream plans to pass on about one third of the overall development costs namely the external portion to its customers. This will be done via a settlement surcharge of 0.094 cents per instruction settled on the German CSDs settlement system CASCADE between April 1 2013 and the companys planned migration in November 2016, with a total cap of 30 million.
Customers will also have the option of a deferred payment, depending on what best suits their business model. Adaptation costs are linked to further fee incentives – based on their contribution to the T2S implementation cost customers will receive a safekeeping discount for the German CSD.
Benefits of potential growth in Clearstreams business following its migration to T2S are planned to be shared with customers to help to offset the T2S investment contribution, said Clearstream. This will be done through a one-off share in possible profits Clearstream makes through T2S.
Stefan Lepp, CEO of Clearstream Banking AG, said: T2S is a key component of European market infrastructure, to which 22 central securities depositories such as Clearstream Banking AG have committed over the past months.
In establishing the cornerstones of a cost model, coupled with a clear strategy based on our industry leading collateral management services, we support our customers in moving towards T2S.
(JDC)