Deutsche Bank, Euroclear and Northern Trust go live with joint T2S service

The combined service brings together a global custodian, a CSD and an asset servicing agent into a single T2S offering.

By Joe Parsons

A joint TARGET2 Securities (T2S) solution operated by Deutsche Bank, Euroclear and Northern Trust has gone live after processing its first transactions.

The multi-agent operation carried out its first transaction in the French market, with Euroclear acting as the tri-party service provider, Deutsche Bank as the sub-custodian, and Northern Trust as the settlement and central bank funding provider.

The go-live of the service comes almost four years after Northern Trust selected Deutsche Bank and Euroclear as its T2S services provider.

“This launch is a significant milestone on a journey towards collaborative business models within the European post-trade landscape,” said Graham Ray, head of securities services product management, Deutsche Bank.

“The smarter custody product solution has involved a platform and operating model change to deliver component-based client products that meet those institutions unique set of challenges given the changing landscape and understanding of their needs.”

The joint solution will enable Northern Trust to hold investors’ assets in separate accounts at a single CSD, while Euroclear’s investor CSD offering will enable market participants to consolidate their European securities settlement activity.

“Our investor CSD offering and open architecture structure allows market participants to consolidate, optimise and more efficiently assign their European securities inventory whilst selecting their preferred asset servicing and collateral management provider,” added Edwin De Pauw, European head of product management, Euroclear.

“This creates cash pooling and netting opportunities across all T2S markets, resulting in reduced credit and collateral consumption for settlement.”

Deutsche Bank will soon look to process its first transaction with State Street, which selected the German-based bank for custody services for certain T2S markets in October last year.