ICSDs, Custodians Develop Asset-Servicing Model for T2S

Clearstream, BNP Paribas Securities Services, BBVA and Intesa Sanpaolo are all involved in the model, which will initially cover asset servicing in France, Belgium, the Netherlands, Italy and Spain. Greece and Austria will be covered through the addition of Citi and Erste Group Bank.

Under the rules of the model, Clearstream will connect to T2S, and asset servicing will be handled at a domestic level by the participating custodian banks, allowing for a tailored, individual approach to each market.

"T2S is a game-changer for the post-trade industry, far beyond settlement in central bank money that T2S targets," says Berthold Kracke, head of business management and a member of the executive board at Clearstream, which is owned by German exchange giant Deutsche Börse Group. "It is our role as market infrastructure to think through the impact of such developments and the advantages it can bring to our clients. We look forward to developing our T2S asset servicing model with our partners so that customers can enjoy the best of all worlds via Clearstream: T2S settlement in commercial and central bank money combined with excellent asset servicing via local service providers at best value for money."

T2S is a settlement platform being developed by the central banks of Europe, lead by the European Central Bank, which will settle nearly all securities in central bank money traded within participating markets. As the settlement function will essentially be outsourced to T2S, CSDs and custodians are increasingly looking at asset servicing as a way to diversify revenue streams. Asset servicing is, on a high level, operations conducted on securities on behalf of client that generally deal with revenue and tax-related activities.