CSDs Prepare to Enter User Testing Phase for T2S

User testing for TARGET2-Securities (T2S) goes live today, October 1, and the central securities depository (CSD) community seems generally confident that the testing will go well and that the industry will be ready for Wave 1 of migration onto the platform in June 2015.

“Every CSD who wishes to test will be able to do so against the software created by the four central banks of Spain, Germany, Italy and France…but not all CSDs have the same situation. Definitely Wave 1 and probably Wave 2 are more advanced than the others, so those who are going to test more intensively will be Wave 1 and to some extent Wave 2 CSDs,” explains Jesus Benito, CEO of Spanish CSD Iberclear and chairman of the European Central Bank’s (ECB) T2S CSD steering group, which represents the views of the CSD community.

Last month, the ECB’s T2S Board confirmed that the Eurosystem would be ready for user testing as scheduled at the start of October, based in part on the general success of the Eurosystem Acceptance Testing phase, which aimed to ensure the T2S platform is up to par.

“We are confident that the software will be good enough, as long as the provider is the central bank,” says Benito. “Before this [user testing], the Eurosystem already tested the software. They have found defects—obviously in every project you find defects—but today, the delivery rate is 90%, so it’s a good figure to start with.

“The defects identified during Eurosystem Acceptance Testing were not considered critical and their resolution is being pursued with full dedication,” says the ECB’s Jean-Michel Godeffroy, chairman of the T2S Board.

Despite the relatively minor defects, CSDs seem ready to enter the next phase of testing, though some have already progressed further than others.

“In the Eurosystem tests that already passed, there were some CSDs used as pilots that are part of Wave 1, such as Monte Titoli, so they have to some extent tested the software to be delivered,” says Benito.
While this early work may be beneficial for smooth implementation, this next phase will help provide a better barometer of readiness.

For example, Euroclear’s Edwin de Pauw, director, head of product management, explains: “We’ve done the connectivity testing, more from a straight-through-processing as well as a user screen interface; it all worked well, but the real time of truth will be when we go into functional testing. From our internal development, we are ready to test.”

“Every time we go into testing we think it’s all working; it’s only when you test you know,” he says.