23 May 2017
Frankfurt
Reporter: Drew Nicol

Lacklustre T2S take up drives volume drop-off


Moves to the Target2-Securities (T2S) platform across the EU has not yet “translated in market participants changing their model to take full advantage of the T2S benefits,” according to Clearstream CEO Marc Robert-Nicoud.

Currently, legal barriers still make it complex to hold securities cross-border, explained Clearstream in its monthly volume report for April.

This leads to higher costs for transactions and causes uncertainty among investors when exercising their rights abroad.

“Further measures, such as a reduction in the realignment fees charged by central securities depositories (CSDs) to each other as part of their cross-border links, are therefore essential in order to increase the attractiveness of doing business cross-border in T2S”, the report continued.

Clearstream noted that its migration to T2S earlier this year meant volumes on the platform had doubled to 500,000 transactions per day. However, cross-border activity in central bank money through T2S remains a small fraction of these volumes.

Robert-Nicoud commented: “The harmonisation objective requires both infrastructure development and a change in market behaviour. T2S migration has not yet translated in market participants changing their model to take full advantage of the T2S benefits.”

“When contributing to market safety and efficiency, market harmonisation should be welcome by all market participants. We continue to develop T2S driven solutions in close cooperation with clients and other market infrastructure providers to ensure that T2S delivers on its pan-European ambitions.”

“We see these efforts as critical to ensure that the market gets the benefits of the investments made over the last years.”

Clearstream saw outstanding volume in its global securities financing drop 13 percent year-over-year for April.

The Deutsche Börse subsidiary recorded monthly volume of €460.2 billion in April, down from €530.1 billion during the same period in 2016.

Clearstream’s January to April average volume was €479.8 billion, down from €530.2 billion in 2016.

More technology news
The latest news from Securities Lending Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
ICMA maps repo and cash bond operations
22 November 2017 | Zurich | Reporter: Zsuzsa Szabo
ICMA has launched a free-to-read mapping directory for more than 80 technology solutions for repo and cash bond operations
OneClearstream now live and trading
15 November 2017 | Frankfurt | Reporter: Drew Nicol
Clearstream has launched OneClearstream, a new collateral management service aimed at automating collateral transfers across depositories
AI can lead us to harmony, says Clearstream
14 November 2017 | Luxembourg | Reporter: Jenna Lomax
Clearstream claims that new technological developments such as artificial intelligence and blockchain will support the market to overcome barriers to harmonisation
Aquila Network is currently being tested on a closed circuit basis and anticipates starting live operations with its first third-party clients before the end of this year
Wematch goes live in Asia
09 November 2017 | Hong Kong | Reporter: Drew Nicol
Wematch.SecuritiesFinancing has expanded into Asia and completed its first trade with Hong Kong users involving Japanese equities
Lombard Risk provides regtech solution to OneSavings
01 November 2017 | London | Reporter: Jenna Lomax
The introduction of the programme at OneSavings Bank will help to streamline regulatory reporting, data management and analytics, according to Lombard Risk
MiFID II stalls Lombard Risk’s H1 revenue pipeline
25 October 2017 | London | Reporter: Drew Nicol
H1 annually recurring revenue up 4.9 percent to £6.4 million from £6.1 million in 2016, but sales bookings for the period was down 21.9 percent on the previous year, with software licence bookings dropping 63.6 percent