Societe Generale Securities Services (SGSS) is announcing its intention to sign a Memorandum of Understanding to adopt Swift's Value Added Network (VAN) solution for connecting to Target2-S (T2S).
The objective of T2S is to facilitate post-trading integration by offering core, neutral, harmonised and commoditised delivery-versus-payment settlement in central bank money in substantially all securities in Europe. In preparation for the future T2S post-trading platform, which is due to go live in June 2015, SGSS selected the VAN solution in order to benefit both from SGSS and SWIFT's common involvement in the T2S project from the start as well as its long-standing relationship with SWIFT, in particular the ISO 20022 format-related working groups. It was decided to adopt SWIFT's technology in order to reinforce SGSS' strategic goal of using a fully T2S compliant network solution for the secure exchange of business information in ISO 20022 format, capable of supporting future growth while ensuring minimal integration risk.
T2S represents a ground-breaking initiative for the industry that will reshape competition for the delivery of securities services across Europe. Adopting SWIFT's VAN solution fully supports SGSS' strategic aim to provide a strong regional settlement offer that will take full advantage of opportunities presented by the T2S project and provide direct benefits for its clients. These include DCP connectivity, improved market response times for settlement and optimised liquidity management through options such as pooling cash for securities accounts held at multiple CSDs and auto-collateralisation to improve intra-day liquidity management for high-volume clients.
This agreement also represents an important step in reinforcing SGSS' service offer. On the one hand SGSS will be able to provide clients with a global offer with direct access to T2S for settlement and local custody for each European market where securities are issued. On the other, SGSS will offer its custody support on a local or global level for clients wanting to manage on their own direct access to T2S for settlement.
SGSS will also be able to provide a customised offer incorporating local and global custody with direct access to T2S for settlement, in addition to added-value asset servicing expertise.
The combined expertise of the SGSS and SWIFT teams will ensure a seamless transition for clients to the future T2S platform, taking full advantage of SWIFT and SGSS' facilities and capacity to handle volume peaks and guarantee business continuity.