A harmonised post-trade environment for Europe is still some way off despite the successful migration of wave four of the ECB’s TARGET2-Securities initiative, according to BNP Paribas.
In a statement released following wave four’s migration BNP Paribas indicated that some functionalities required for harmonisation had not been implemented by various central securities depositories (CSDs).
“Wave four is not the end of the T2S project, wave five may be smaller in volume but is higher in complexity,” BNP Paribas said in a statement.
“On a wider note, we are still far from full harmonisation in the European post-trade environment. Some CSDs are yet to implement all the functionalities and work to common settlement and corporate actions standards.
“Clearstream Banking Frankfurt for example, does not credit all income proceeds to the T2S dedicated cash account (DCA) and still applies the current logic in crediting the Target2 account instead. “
The statement also suggested that wider European developments including Brexit and key regulatory changes including central securities depository regulation may also affect European post-trade activity.
Wave four of the T2S initiative took place on Monday with CSDs from Germany, Austria, Hungary, Slovakia and Slovenia migrating to the platform.
Following the conclusion of the fourth wave of market migrations, 16 of the planned 22 CSDs have migrated to the T2S platform.
The fifth migration wave will take place in September 2017 when the markets for Spain, Estonia, Latvia and Lithuania will join the platform.
Deutsche Bank also released a statement welcoming the successful migration.
“This migration has been the culmination of a significant effort to restructure our European Custody platform,” said Graham Ray, head of investor services product management at Deutsche Bank.
“With the migration of wave four including the German market, we are adding our largest volumes on to the new T2S infrastructure, and importantly unveiling our strategic platform to deliver a new component based solutions architecture,” said Ray.