Europe prepares for largest T2S wave

Wave four of the T2S project will take place on Monday with around 40% of volumes set to migrate to the ECB’s platform.
By Paul Walsh
The largest migration wave of the European Central Bank’s (ECB) TARGET2 Securities (T2S) project will take place on 6 February with around 40% of overall volumes set to migrate to the platform.

Around 45% of volumes have already migrated across three previous waves and wave four will see Clearstream Banking Frankfurt along with CSDs from Slovakia and Slovenia follow suit.

Earlier this month, Clearstream declared its readiness for wave four as it aims to avoid the issues seen with previous migration testing.

The final wave of migration is set to take place in September with CSDs from Estonia, Latvia and Lithuania as well as Euroclear Finland and Iberclear representing the remaining 15% of volumes.

Initially proposed in 2006, the T2S initiative was designed to create a harmonised European settlement platform with settlement costs proposed at a maximum of 15 cents per settlement.

A harmonised structure was also proposed to give migrated CSDs a chance to increase their competitiveness across the continent as a result of moving away from the borders and monopoly structures they were used to working with.

Since is inception in 2006, the project has drawn criticism from various industry participants.

Speaking at the GC leaders event last summer, former Schroders COO Markus Reutimann describing the initiative as a project of “compromises and excuses that has missed all its targets”.

In addition earlier this week, ECB executive board member Yves Mersch stated that various tax and corporate action issues will not be addressed by T2S.