Collaboration deal aims to bring maximum benefits of T2S

Deal indicates growing need for firms to collaborate across the value chain.
By Jonathan Watkins

Clearstream and Citi have designed a new market-side network model in collaboration with UBS enabling banks and broker-dealers to optimise their operating models and reap the maximum benefit from T2S.

UBS will be the launch client for the service beginning in 2017.

Citi will provide clearing, settlement, and asset servicing, while Clearstream will provide safekeeping, lending, and securities financing solutions.

The launch comes as three of the four waves of T2S – the Pan-European settlement platform – have been rolled out. At the same time, collaboration is increasingly becoming more prevalent across the value chain, with other similar deals seeing the likes of Clearstream and SIX Securities Services team up, and Euroclear and DTCC.

“The launch of this solution comes after many years of collaboration and planning with our two partners Clearstream and Citi, around how best to position ourselves for T2S,” said Colin Parry, head of securities, collateral and derivatives, UBS.

“We expect network and operational simplification benefits, and also improved management of liquidity and collateral. We believe that the model sets a new industry standard, will enhance our client value proposition and will unlock numerous front-to-back efficiency gains that allow us to play a part in hitting UBS’s existing cost commitments.”

According to Citi and Clearstream, the new solution will provide market participants with a single point of access to T2S, along with a single integrated and optimised collateral pool and comprehensive post-trade services.

“This model brings together the best that each institution has to offer, giving UBS a truly best-in-class service solution, whilst delivering meaningful commercial benefits”, said Philip Brown, co-CEO of Clearstream Banking Luxembourg.