T2S wave four ‘can’t afford delays’

The next migration wave of the TARGET2-Securities (T2S) project cannot afford any delays, according to an industry expert.

Speaking at a BNP Paribas event, Cornelia Raif, head of relationship management for banks and brokers in Germany and Austria at BNP Paribas Securities Services suggested that increasing pressures for market participants would make delays a major issue.

The fourth wave of the T2S project is set to take place in February 2017 with Clearstream Banking Frankfurt as well as central security depositaries (CSDs) in Slovakia, Slovenia and Luxembourg all set to migrate.

In total, around 40% of overall volumes are set to migrate onto the platform in February.

“We cannot afford any delays, so February 2017 is the target date. We all have so many IT projects and regulatory requirements that we have to cope with,” said Raif.

“I know that from a couple of banks domiciled in Germany they are also looking at rolling out large scale IT projects around the same period so we simply cannot afford any delays delivering the T2S project.”

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

The project has since suffered delays and criticism from industry participants.

In October 2015, Euroclear announced a delay in migrating its CSDs in Belgium, France and the Netherlands citing the need for more time to ensure a ‘safe and stable migration’.

Speaking at the GC Leaders event this summer, former Schroders COO Markus Reutimann described T2S as a project of “compromises and excuses that has missed all its targets”.

Raif also went on to suggest that in spite of round 45% of overall volumes having successful migrated onto the platform the project remains in a ‘move-in’ phase.

“Don’t forget that we are still in a move-in phase of T2S which will look messy at the beginning but we still have to successfully complete waves four and five,” said Raif.

“So once we have completed these phases we can look at where we can save money and work out which model works for each customer because every customer has a different business line to support.”