Tom Casteleyn, head of product management for custody, cash and FX at BNY Mellon comments:
Wave 3 represents a tipping point which will enable the market to evaluate whether the T2S project justifies the investment companies have made in the platform. A critical mass of settlement volume is scheduled to go live on 12 September 2016, providing the first meaningful picture of the project’s capabilities.
Extensive work and investment has gone into ensuring that the T2S project is successful and delivers the benefits first promised by the ECB. Initial delays to the migration of Italy’s Monte Titoli and more recent challenges faced by Euroclear’s CSD have led some market participants to question whether the resource invested in T2S will be justified.
A successful migration of Euroclear’s CSDs in France, Belgium and the Netherlands, and VP CSDs in Denmark and Luxembourg will give the market confidence to push ahead with T2S initiatives. It will also allow custodians to develop the products and services that will facilitate more efficient clearing, settlement and collateral management.
The industry will soon need to focus on the significant challenge of migrating Clearstream’s CSD in Germany – the project’s largest market – in Wave 4. Wave 3 must run smoothly to ensure settlement volume isn’t pushed back to later waves and avoid stretching capacity too far.
