Two central securities depositories have been approved by the European Central Bank to join the TARGET2-Securities initiative in the first wave of implementation in 2014. Monte Titoli (Italy), part of the London Stock Exchange Group, and Depozitarul Central S.A. (Romania), part of the Bucharest Stock Exchange Group, join BOGS, the Greek CSD, which announced in May it would join T2S in the first migration wave.
T2S, which after several delays is expected to launch in September 2014, is the pan-European settlement platform charged with harmonizing the landscape and lowering the cost of Eurosystem settlements.
The notoriously fragmented capital markets infrastructure in Europe with 40 CSDs and 21 central counterparties (CCPs) means the T2S endeavor is one of the most ambitious projects that the Eurosystem has embarked on, as the ECB itself remarks. Global Custodian featured the T2S project in our Fall 2010 issue.
Past attempts to harmonize the European settlement space have been met with varying levels of success. Clearstreams Link Up Markets has signed on ten CSDs, including South Africas STRATE and Egypts MCDR. Euroclears alternative, ESES, covers Belgium, France and the Netherlands, but concerns have been raised about its possible redundancy when T2S goes live.
But other attempts, such as TAURUS, GSTPA and LCH.Clearnets Anglo-French settlement platform, have tanked all together, and at great cost.
To date, 30 CSDs have committed to join T2S by the time the project is expected to be in full swing. A number of banks and central banks have also expressed their commitment.
We are very pleased that Monte Titoli and Depozitarul Central S.A have now also committed to joining T2S in its first migration wave,” says Jean-Michel Godeffroy, Chairman of the T2S Programme Board. “Monte Titoli will bring to T2S a strong heritage of efficient and secure post-trade services, and the involvement of Depozitarul Central S.A. will extend the boundaries of T2S beyond those of the euro area from the very start.”