08 December 2016
Visit aciworldwide.com

ECB extends T2S deadline; weak trading hits volume and pricing assumptions

04 December 2012  |  7325 views  |  0 European flags

The European Central Bank may be forced into a rethink of the charging structure for the Target2Securities settlement platform as weak trading in Eurozone markets hits previously optimistic volume assumptions.

The ECB had previously stated that fees for trades passed over the harmonised platform would be set at 15 cents per transaction based on "conservative assumptions" about volume throughput.

But in a quarterly update on the project published by the ECB, Jean-Michel Goddefroy, chairman of the T2S board, says that settlement volumes reported by the 23 CSDs that have committed to the system are around 18% lower than was anticipated in 2010 for this period.

"This gives the T2S Board cause for concern, as one of the underlying assumptions of the T2S pricing policy was that EU volumes would be no more than 10% lower than the projected volumes," he says. "The Board will keep a close eye on this matter and explore all possible ways to avoid increasing fees for T2S users."

In another blow to the project, the ECB has once again extended the deadline for migration to November 2016 in a bid to alleviate concerns about operational safety issues. The initial plan called for the central securities depositories (CSDs) of the Clearstream and Euroclear groups - which account for around two thirds of T2S volumes - to migrate as part of the same wave.

However, this scenario met with strong opposition from several users who were concerned about the severe operational risks and potential for market disruption from a botched migration.

Under the revised scheme, the 23 CSDs to have committed to the project will relocate their data to the T2S infrastructure in three waves within 18 months from the June 2015 go-live date.

The first wave include the Bank of Greece securities settlement System, Italy's Monte Titoli, Malta Stock Exchange, Romania's Depozitarul Central and Switzerland's SIX-SIS.

Belgium's securities settlement system NBB-SSS, Euroclear ESES, Spain's Iberclear, Portugal's Interbolsa and Slovakia's CDCP will join from July 2016.

From November 2016, Clearstream Banking (DB1Gn.DE), Austrian OeKB, Euroclear FIN, LuxCSD, Danish VP Securities and its subsidiary VPLux, Estonia's AS Eesti Väärtpaberikeskus, CSD of Lithuania, KDD Slovenia and Keler Hungary will join.

T2S programme manager Marc Bayle says: "Migrating to T2S is a complex issue, given the number of actors, the volume of operations, and the risks at stake. For this reason, it was decided from the early stages of the project that T2S migration would not happen as a big bang...in terms of wave composition, the operational risks are now more balanced."
KeywordsDEPOSITORIES

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Swift wins T2S connectivity deal with CSD consortium

Swift wins T2S connectivity deal with CSD consortium

24 October 2012  |  6740 views  |  1 comments | 2 tweets
Euroclear to join T2S project

Euroclear to join T2S project

12 June 2012  |  7852 views  |  1 comments
ECB signs nine depositories to T2S project

ECB signs nine depositories to T2S project

08 May 2012  |  7421 views  |  1 comments
Swift, SIA and Colt win T2S connectivity licenses

Swift, SIA and Colt win T2S connectivity licenses

09 January 2012  |  10594 views  |  0 comments
Banking heads 'hugely disappointed' by T2S delay

Banking heads 'hugely disappointed' by T2S delay

21 September 2011  |  9311 views  |  0 comments
ECB calls on recalcitrant CSDs to take efficient approach to T2S integration

ECB calls on recalcitrant CSDs to take efficient approach to T2S integration

21 September 2011  |  8859 views  |  0 comments
T2S delayed again

T2S delayed again

20 September 2011  |  9128 views  |  1 comments
ECB sets T2S framework agreement deadline; UK looks to opt out

ECB sets T2S framework agreement deadline; UK looks to opt out

22 July 2011  |  8617 views  |  0 comments
ECB settles on T2S pricing

ECB settles on T2S pricing

19 November 2010  |  13116 views  |  0 comments
ECB issues price plan and revised timetable for T2S

ECB issues price plan and revised timetable for T2S

25 October 2010  |  9939 views  |  1 comments
ECB confirms delay to T2S

ECB confirms delay to T2S

14 April 2010  |  12796 views  |  0 comments
ECB to set back T2S timetable to beyond 2013

ECB to set back T2S timetable to beyond 2013

15 January 2010  |  14721 views  |  0 comments
T2S spat turns up the heat at Sibos

T2S spat turns up the heat at Sibos

15 September 2009  |  9885 views  |  1 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
http://www.financialcrimerisk.fiserv.com/aml?r=finextraVisit contisgroup.comVisit VocaLink.com

Who is commenting?

A Finextra member Finextra Member Commented on: Payments regulator blo...
A Finextra member Finextra Member Commented on: Payments regulator blo...

Top topics

Most viewed Most shared
Guesswork alone can crack Visa card security - Newcastle UniversityGuesswork alone can crack Visa card securi...
7513 views 12 comments | 15 tweets | 27 linkedin
OCC to offer fintech firms bank charter statusOCC to offer fintech firms bank charter st...
7066 views comments | 25 tweets | 15 linkedin
China tops world fintech rankingsChina tops world fintech rankings
6868 views comments | 34 tweets | 30 linkedin
Fed Governor sounds warning on alternative credit scoring dataFed Governor sounds warning on alternative...
6260 views comments | 19 tweets | 20 linkedin
Big tech policy group calls on Trump to promote fintech innovationBig tech policy group calls on Trump to pr...
5737 views comments | 22 tweets | 11 linkedin

Featured job

Find your next job