Euroclear CSDs agree T2S deal
The Euroclear CSDs of Belgium,
France and the Netherlands have agreed to sign up to the TARGET2-Securities
(T2S) framework agreement.
The project, launched by the
Eurosystem to provide a common technical platform for securities settlement in
Europe, is scheduled to start in 2015. The signing of the framework agreement
is an important milestone in the T2S project. The agreement governs the legal
relationship between the Eurosystem and each central securities depository
(CSD) participating in T2S. In November 2011, after more than two years of
negotiations, the contract was offered to 31 European CSDs, with an invitation
to sign by April 2012 or, if additional time was required, by June 2012.
The signing of the three
Euroclear CSDs follows an announcement in April by Clearstream
that it will join T2S and the signing of nine other CSDs
to the agreement in May.
Following consultation with
the market and the regulators, Euroclear will finalise the assessment of CSD
outsourcing arrangements with the relevant regulators before signing the T2S
Framework Agreement. With support from parent company Euroclear, the boards of
the three CSDs have agreed for each CSD to sign the agreement. As a result,
Euroclear Belgium, Euroclear France and Euroclear Nederland will outsource
settlement transaction processing to T2S.
Clients of the three CSDs will
continue to have accounts directly with the respective CSD and receive the full
range of post-trade services from that CSD. The migration date and fees for
connecting to and using T2S will be determined after completion of market
Joël Mérère, chairman of the boards
of Euroclear Belgium, Euroclear France and Euroclear Nederland, stated:
"The three Euroclear group central securities depositories are reflecting
local market sentiment by taking the decision to sign the T2S Framework
Agreement. As the first and only group of markets in continental Europe to have
consolidated and harmonised transaction settlement and custody services on a
shared platform, we appreciate the benefits of large-scale processing
consolidation and harmonisation that T2S has the capacity to provide."
Valérie Urbain, CEO of
Euroclear Belgium, Euroclear France and Euroclear Nederland, added:
"Euroclear has been preparing to operate within a T2S environment for some
time. Our asset servicing capabilities are expanding, and we are introducing
collateral management services for clients in the Belgian, French and Dutch
markets, as well as with some local central banks."
Known as the ESES (Euroclear
Settlement of Euronextzone Securities) platform, the three CSDs settled €87
trillion of securities transactions in 2011, representing 31 million
transactions, and held approximately €6 trillion of assets for clients.
The three ESES CSDs are part
of the Euroclear group, which includes the international central securities
depository Euroclear Bank, based in Brussels, as well as the national central
securities depositories Euroclear Finland, Euroclear Sweden and Euroclear UK
The Swedish market will not
join T2S at this time, following market consultation and the decision of the
Riksbank, the central bank, not to allow the settlement of transactions
denominated in Swedish Krona in T2S.
Reporting by Janet du Chenne, Global Custodian, an Asset International publication