The first partnership solution for TARGET2-Securities (T2S), involving Deutsche Bank, Euroclear and Northern Trust has been announced.
The collaboration is based on a new operating model in securities services, where
the traditional value chain is delivered by the integration of multiple parties – a
global custodian, a central securities depository (CSD) and an asset servicing
agent – into a single service offering.
T2S harmonises the cross-border settlement of securities for select markets in
Europe and allows participants to settle securities in central bank money, delivery
versus payment (DVP), in the core European markets. In this first live operation of
a multi-provider component solution, Northern Trust, as global custodian,
performs settlement and provides central bank funding; Euroclear, as an issuer
CSD, offers a single CSD Account structure in the French market as well as
access to tri-party services, and Deutsche Bank offers local connectivity, asset
servicing and end to end reconciliation.
Graham Ray, Head of Securities Services Product Management, Deutsche Bank
said: “This launch is a significant milestone on a journey towards collaborative
business models within the European post trade landscape, the smarter custody
product solution has involved a platform and operating model change to deliver
component based client products that meet those institutions unique set of
challenges given the changing landscape and understanding of their needs.”
The solution was conceived across the three parties, and was the first
large scale T2S mandate announced in the market. Through detailed analysis of
the processing flows across core European markets and in-depth collaboration,
this vision became a reality when the solution entered live operations for the
This collaborative model demonstrates how such component-based modular solutions can reshape the operation of post-trade service landscape of Europe.