SIA, a European banking and financial services provider operating the SIAnet network infrastructure, and Colt, the information delivery platform providing connectivity to a number of European stock exchanges, have been jointly granted a license by the European Central Bank (ECB) to design, create and manage the network infrastructure for TARGET2-Securities (T2S).
The system to be developed by SIA and Colt will connect central securities depositories, central banks and European banking groups to the T2S platform. T2S is the single European settlement platform designed to integrate the post-trade infrastructure in the Eurosystem. After some delays, it is tentatively set to go live in 2015 (See T2S Delayed to 2015: Will It Happen At All?, Global Custodian, Sept. 21, 2011).
SIA and Colt have partnered specifically for the purpose of developing the T2S connectivity network. The two companies are developing a secure, high-speed connectivity and messaging service to link CSDs, central banks and major commercial banks to T2S, while also guaranteeing security and privacy of data, reliability, performance and business continuity standards.
The license awarded to SIA and Colt will be valid from February.
This important success provides confirmation of our central role in Europe in the design and creation of infrastructures for financial and central institutions and recognition of a made in Italy technology that is on equal terms with that of foreign players, says Massimo Arrighetti, CEO of SIA. This result demonstrates our ability to compete on the market with internationally recognized companies. At the same time, it contributes to the creation of a network of excellence aimed at ongoing innovation and system improvement which is the objective of our partnership strategy.
Simon Walsh, executive vice president of Colt, adds: T2S is a major project for the European securities industry. We are delighted in conjunction with SIA to have been awarded this license. Colt is a pan-European services provider and has been providing secure connectivity to the financial services community for nearly 20 years.
There has been speculation in the industry that the T2S project may never get off the ground. The greatest criticism of the project is that it may wind up being more expensive to develop and run than it will earn in revenue.
If large markets such as the United Kingdom and Sweden do not join the platform, which is believed to be the case, the resulting volume levels and the pricing 0.15 per transaction may be such that T2S will cost more to run than it will earn in revenue. It has been estimated the platform will cost the industry up to 1 billion to develop.
(CG)