In collaboration with UBS, Clearstream and Citi have designed an innovative market-side network model that enables banks and broker-dealers to optimise their operating models and reap the maximum benefit from TARGET2-Securities (T2S), the Pan-European settlement platform operated by the Eurosystem.
The new solution will provide market participants with a single point of access to T2S, along with a single integrated and optimised collateral pool and comprehensive post-trade services.
UBS will be the launch client for this solution service, starting in 2017. Citi will provide clearing, settlement, and asset servicing, while Clearstream, the Central Securities Depository, will provide safekeeping, lending, and securities financing solutions. UBS will benefit from both institutions' unique economies of scale and scope, as well as cross market netting opportunities.
"The launch of this solution comes after many years of collaboration and planning with our two partners Clearstream and Citi, around how best to position ourselves for T2S. We expect network and operational simplification benefits, and also improved management of liquidity and collateral. We believe that the model sets a new industry standard, will enhance our client value proposition and will unlock numerous front-to-back efficiency gains that allow us to play a part in hitting UBS's existing cost commitments," said Colin Parry, UBS Head of Securities, Collateral & Derivatives.
“Citi has a long history of shaping and accelerating the process of change in the securities markets. We are delighted to be working jointly with Clearstream and providing UBS with this innovative solution”, said Reto Faber, Head of Direct Custody and Clearing for EMEA, Citi.
“This model brings together the best that each institution has to offer, giving UBS a truly best-in-class service solution, whilst delivering meaningful commercial benefits”, said Philip Brown, Co-CEO of Clearstream Banking Luxembourg.