6th Summit for an Enlarged Europe T2S The impact on the securities - - PowerPoint PPT Presentation

6th Summit for an Enlarged Europe

T2S – The impact on the securities industry Jean Paul Rousseau International Securities Affairs May 27, 2010

1

T2S: The impact on the securities industry

Agenda

Contents of the ING internal T2S White Paper

• T2S: Setting the scene
• What is T2S?
• The T2S actors
• Status update & next phases of the Programme
• Open issues
• How it will function
• Interactions with stakeholders in the Programme
• Other European projects and initiatives
• Potential impacts and opportunities for market infrastructures and participants
• ING vision and questions & answers

2

T2S: The impact on the securities industry

T2S : setting the scene

• What is T2S

Ensuring consistent understanding Managing expectations Outsourcing: CSDs, NCBs and SSSs of NCBs (acting as CSD for Debt Instruments) Integrated DVP model versus Interfaced T2S is a Platform, not a Service Provider

3

T2S: The impact on the securities industry

T2S : setting the scene (ctd.)

T2S actors Market infrastructures Exchanges, MTFs, electronic trading platforms, CCPs, CSDs, ICSDs Countries involved 29 CSDs signed the M.O.U. CEE countries: Slovenia, Slovakia and non-euro: Romania, Poland UK? Countries joining the euro as from 2015 Users of market infrastructures Banks, brokers, CSDs having links to other CSDs Issuers?

4

T2S: The impact on the securities industry

T2S : setting the scene (ctd.)

Status Update & Next Phases of the Programme User Requirements Document (URD): frozen Q1, 2010 User Detailed Functional Specifications (A2A): H1, 2011 User Handbook (U2A), H1, 2012 Platform available for testing: January 2014 Platform in production for first group of CSDs: September 2014

5

T2S: The impact on the securities industry

T2S : setting the scene (ctd.)

Open issues Connectivity to the CSD or to the T2S platform ISO 2022 standards Connectivity: competing network providers Investor CSD role Settlement costs announced and fees charged by CSDs and banks How it will function Main functionalities and features Non euro settlements Instruments accepted

6

T2S: The impact on the securities industry

T2S : setting the scene (ctd.)

• Interactions with stakeholders

Adivsory Group Sub-working groups National User Groups Information sessions and workshops Task forces CSDs Contact Group

7

T2S: The impact on the securities industry

T2S : setting the scene (ctd.)

• Governance

No need for a Separate Legal Entity Topic for the next AG in June On-going: Framework Agreement for CSDs Draft to CESR by July 2010 Signature expected by April 2011 Currency Participation Agreement for non euro countries Dedicated task force to negotiate and find agreement by the Autumn 2010

8

T2S: The impact on the securities industry

T2S : Other European projects and initiatives

Private sector Public sector The “knowns “ and “unknowns” until 2014 Sequencing of all the initiatives and moving targets?

9

T2S: The impact on the securities industry

T2S : Other European projects and initiatives

Giovannini Barrier 3 Harmonisation of Corporate actions on flow and on stock Standards for General meetings and proxy services Withholding tax procedure ECSDA standards Settlement cycle harmonisation Securities law directive and possible impact on future IPOs ISO 2022 E.M.I.L.: CCP links New MTFs, Dark Pools, Clearing Houses, CSDs (LUXCSD) Countries joining the euro Funds business evolution and convergence

10

T2S: The impact on the securities industry

T2S : Potential implications and opportunities

Exchanges and trading venues CCPs National Central Banks CSDs ICSDs Global Custodians Local Custodians Multi-direct Custodians Retail banks Payment banks Broker/dealers

11

T2S: The impact on the securities industry

T2S : Potential implications and opportunities

Exchanges and trading venues Markets without CCP Other trading platforms feeding CCP and/or NCBs CCPs Access to CSDs Use of settlement banks Option of direct connectivity National Central Banks Interfaced model Integrated model CSD role for Debt instruments

12

T2S: The impact on the securities industry

T2S : Potential implications and opportunities

CSDs Migration plan “all things being equal” Existing bilateral links with CSDs and ICSDs Link-up markets By-passing local agents? CSDs with/without banking license ICSDs Commercial Bank Money settlements? Volume evolution?

13

T2S: The impact on the securities industry

T2S : Potential implications and opportunities

Global Custodians Keep existing arrangements Go direct and build own asset servicing expertise Go direct and use local provider for asset servicing Use a few regional agents A combination of these options Local Custodians Role and value added of local custodian Some options

14

T2S: The impact on the securities industry

T2S : Potential implications and opportunities

Muti-direct Custodians Direct connectivity requires coordination and solution for cash management Possibility to centralise some processes (and harmonise) Need to involve now countries currently “out of scope” Need to “watch out” the entire region CSDs Platforms Fee harmonisation Competition

15

T2S: The impact on the securities industry

T2S : Potential implications and opportunities

Broker/dealers Evolution of the trading and post-trading space Self clearing CeBM versus CoBM Settlement volumes CSD competition Back Office cost reduction versus risks

16

T2S: The impact on the securities industry

T2S : ING vision and questions & answers

Bottom line:

Staying ahead by adding value

18

T2S: The impact on the securities industry

Certain of the statements contained in this release are statements of future expectations and other forward-looking statements. These expectations are based on management’s current views and assumptions and involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those in such statements due to, among other things, (i) general economic conditions, in particular economic conditions in ING’s core markets, (ii) changes in the availability of, and costs associated with, sources of liquidity such as interbank funding, as well as conditions in the credit markets generally, including changes in borrower and counterparty creditworthiness, (iii) the frequency and severity of insured loss events, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) interest rate levels, (vii) currency exchange rates, (viii) general competitive factors, (ix) changes in laws and regulations, and (x) changes in the policies of governments and/or regulatory authorities. ING assumes no obligation to update any forward- looking information contained in this document. www.ing.com