The harmonized settlement platform for securities in the eurozone took a step forward recently with the approval by the European Central Bank Governing Council of the migration plan of CSDs to the new platform.
TARGET-2 Securities (T2S) will become the official platform for securities settlement in the eurozone in four migration waves, starting in June 22 2015 with the first wave migration of the Bank of Greece Securities Settlement System (BOGS), the Depozitaral Central (Romania), the Malta Stock Exchange, Monte Titoli (Italy) and SIX SIS (Switzerland). The second wave is due to take place on March 28 2016 with the migration of Euroclear Belgium, Euroclear France, Euroclear Nederland, Interbolsa (Portugal) and National Bank of Belgium Securities Settlement Systems (NBB-SSS). The third wave will take place on Sept. 12 2016 with the migration of Clearstream Banking (Germany), Keler (Hungary), LuxCSD (Luxembourg), Oesterreichische Kontrolbank (Austria), VP Lux (Luxembourg) and VP Securities (Denmark). The fourth wave will take place Feb. 6 2017 with the migration of Centralny depozitar cennych papierov SR (CDCP) (Slovak Republic), Eesti Vaartpaberikeskus (Estonia), Euroclear Finland, Iberclear (Spain), KDD – Centralna klirinsko depotna (Slovenia) and Lietuvos centrinis vertybiniu popieriu depozitoriumas (Lithunania).
After two delays and a cost of over €1.4 billion to build, it has been debated whether T2S would actually go ahead. Additionally, the costs of implementation could reach as high as €27 million per financial institution, according to Celent.
Sources say 80% of the development work of T2S has been completed, but the main challenge will be in the development work between now and 2015 in adapting the settlement platform to the local markets in Europe.