T2S: Two Years to Launch The Strategy of London Stock Exchange for - - PowerPoint PPT Presentation

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T2S: Two Years to Launch The Strategy of London Stock Exchange for - - PowerPoint PPT Presentation

Sep 05, 2023 275 likes •489 views

T2S: Two Years to Launch The Strategy of London Stock Exchange for T2S London Stock Exchange Group The London Stock Exchange offer for T2S: a flexible and efficient solution Objectives Client Maximum flexibility and efficiency DCP 1

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SLIDE 1

T2S: Two Years to Launch

The Strategy of London Stock Exchange for T2S

London Stock Exchange Group

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SLIDE 2

The London Stock Exchange offer for T2S: a flexible and efficient solution

Maximum flexibility and efficiency

  • Guarantee an easy and efficient access to the whole set of

functionalities available in T2S Solutions for preserving current infrastructure and minimize impacts

  • Full coverage of asset servicing through SWIFT messages
  • Exploit current interfaces and accounting structures

Possibility to choose Monte Titoli as unique access point to all markets

  • Expand the network for a complete markets coverage
  • Supply a comprehensive set of services (fiscal, multi-currency,

asset servicing)

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DCP DCP + ICP Client ICP Objectives

Page 2 London Stock Exchange Group

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SLIDE 3
  • Access to the whole set of

functionalities available in T2S

  • Competitive pricing
  • Possibility of a “mixed” connectivity

model with more functionalities and information not supplied by T2S but available through Monte Titoli

Swift/ X-Trm Swift Swift/ X-trn Swift

Page 3 London Stock Exchange Group

The market approach followed by Monte Titoli allows its clients to act as an aggregation hub on multiple countries and markets

DCP

For DCPs T2S means: Flexibility and efficiency

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SLIDE 4

ISO20022 ISO 20022 - T2S GUI ISO15022 MT-X ISO15022-20022 MT-X - MTA2A DCP Settlement ICP/DCP Asset servicing ICP Settlement ICP/DCP (Pre) Settlement (*)

(*) for information not directly available to DCP

London Stock Exchange Group Page 4

Connectivity options

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SLIDE 5

Liquidity Management

  • Management of cash in Central Bank Money
  • Corporate actions payments both in T2 and T2S (client choice)
  • Centralised cash management through DCAs for all activity channeled

via Monte Titoli

  • Auto-collateralisation ‘on flows’ facility
  • Cash forecasting
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SLIDE 6

London Stock Exchange Group Page 6

  • LSEG will keep on managing repos (DCP and ICP)
  • Both classic repos and buy sell back will be managed
  • Central engine for the calculation of the accrued interest
  • no risk of mismatch
  • Management of both spot and forward legs
  • Linkage between the two settlement instructions automatically

created by LSEG before it is send to T2S

  • Possibility to keep the actual infrastructure flow

LSEG offering on repos

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SLIDE 7

London Stock Exchange Group Page 7

  • Centralisation of liquidity within T2 / T2S
  • Possibility to use a single cash account in T2S to cover all settlement needs
  • Settlement in central bank money for all activities with counterparties connected to

T2S

  • Neither split of liquidity nor use of commercial bank money
  • CA proceeds directly in T2 / T2S
  • No further use of domestic payment system
  • Full flexibility for clients in the choice of receiving proceeds (T2 or T2S accounts)
  • Clients may choose for single type of securities whether they wish to receive

proceeds in PM account of T2 or in the DCA of T2S

Integrated cash management in central bank money

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SLIDE 8
  • Investments for T2S project will not be transferred to clients
  • Monte Titoli confirms its commitment to maintain the cost for domestic settlement as it is

until the start of the second wave of T2S inclusive of current services

  • Starting from Wave 2, the settlement fees will be reduced and will be applied both to

domestic and non-domestic immediately after the entrance of the relevant Issuer CSD in T2S

  • From Wave 2, Monte Titoli will apply a differentiated fee for ICP and DCP, in order to

guarantee participants a transparent and tailored pricing, according to the specific needs

  • f the customer
  • Based on official T2S princing schedule of ECB

Page 8 London Stock Exchange Group

Monte Titoli’s pricing principles

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SLIDE 9

€ 0.475

Price Volumes

Current ICP

Pricing in T2S – from Wave 2

DCP

  • DCP: flat fee for each trade based on the

ECB price plus a mark-up for cost recovery

  • ICP: A tiered pricing structure that includes

the following services:  Enrichment  Conversion of ISO15022 in ISO 20022  Routing  Matching  Settlement reporting  Queries will not be part of the standard

  • ffering

ECB cost

Page 9 London Stock Exchange Group

Pricing principles in T2S starting from Wave 2

€ 0.25 (*)

(*) Internal estimate based on T2S offical pricing

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SLIDE 10

Status of the T2S project

Page 10 London Stock Exchange Group

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SLIDE 11

Completing the offering for T2S

Page 11 London Stock Exchange Group

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  • Coverage of all markets
  • Corporate Actions
  • Fiscal services on foreign securities
  • Triparty collateral management

Objective: Offering an unique access point to manage financial securities in T2S before the first migration wave Main project streams

Page 12

London Stock Exchange Group

Pricing principles in T2S starting from Wave 2

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SLIDE 13

Markets Open Link

France ESES

investor CSD Germany

Investor CSD Austria

Investor CSD Luxembourg (VP Lux)

  • Und. Devel. Investor CSD

Finland

Indirect via EB Spain

Investor CSD Portugal

Investor CSD Netherlands ESES

Investor CSD Sweden

Indirect via EB Belgium NBB

  • Und. Devel. Investor CSD

Belgium ESES

Investor CSD Greece BOGS

  • Und. Devel. Investor CSD

Switzerland (EUR)

Investor CSD USA DTCC (FOP)

Investor CSD UK &IE (EUR)

Investor CSD Euroclear Bank

Investor CSD Clearstream Luxembourg

Investor CSD

A wide coverage of all T2S markets and G8 countries will be implemented before the start of T2S New markets Open Link

Remaining T2S markets (10)

By 6/2015 Indirect/Relayed

Japan

TBD

Indirect Canada

2013

Indirect Russia

2014

Investor CSD

Page 13 London Stock Exchange Group

Extra T2S T2S countries Legend

Market coverage (from 18 to 30)

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SLIDE 14
  • Corporate Action Harmonisation & Automation project guarantees some key advantages (to

be released phase 1 June 2013 and phase 2 in Q4 2013):

  • Processes and messages currently in use for domestic securities will also be available

for foreign securities

  • Introduction of native swift messages ISO15022 and ISO 152022
  • Two separate messages for capital reimbursement and interest payment (when paid

same day)

  • All Corporate Actions proceeds paid in T2S
  • Identical processing for each security, irrespective of the country of issue
  • Other Services:
  • Hold & Release to be released in 3Q13
  • Multicurrency DVP by 4Q13

Page 14 London Stock Exchange Group

Asset servicing: same procedures for domestic and foreign securities

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SLIDE 15

Partnership with a major market actor to pursue the following objectives:

  • Supply Relief at Source services in each country where it is allowed by the

local jurisdiction

  • Full coverage of all markets
  • Direct management by Monte Titoli of the whole payment process

Page 15 London Stock Exchange Group

Fiscal services: complete coverage

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SLIDE 16

Simplification in back

  • ffice
  • Full outsourcing of the management of

financing operations and collateral Reduced risk

  • Sophisticated\customised tools to control

risks (hair cuts, eligibility criteria, margin calls, concentration limits, close links) Full control on securities portfolio

  • Immediate recall and automatic

substitution of securities in collateral Optimised use of collateral

  • Customised selection of collateral based
  • n rating and size

Use of the same pool/securities account to cover different trading needs, financing and collateral Objective Phase 1 (pool Bankit): September 2012 Phase 2 (Markets): Q1 2014 Planning

Page 16 London Stock Exchange Group

X-COM: the new Triparty Collateral platform

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SLIDE 17
  • Offering a single point of access for T2S markets for settlement, asset

servicing and collateral management

  • Flexible service model with full T2S functionality
  • Harmonization and standardization of procedures for all securities in T2S
  • Partnering with a CSD that operates a low risk process (CBM and Agent Role)
  • Competitive pricing

Why London Stock Exchange

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SLIDE 18

Contact Us

Alessandro Zignani Head of Post Trade Sales Phone: +39 02 33635212 Email: azignani@lseg.com Cristina Belloni Senior Sales Phone: + 39 02 72426504 Email: cbelloni@lseg.com Giovanni Costantini Senior Sales Phone: +39 02 33635283 Email: gcostantini@lseg.com David Smith Sales – UK clients Phone: +39 02 033635218 Email: d.smith@lseg.com Paolo Carabelli T2S Project Manager Phone: +39 02 33635 237 Email: p.carabelli@lseg.com

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SLIDE 19

London Stock Exchange Group Page 19

  • The publication of this document does not represent solicitation, by Borsa Italiana S.p.A., of public saving and is not to be considered

as a recommendation by Borsa Italiana as to the suitability of the investment, if any, herein described.This document has not to be considered complete and it is meant for information and discussion purposes only. Borsa Italiana accepts no liability, arising, without limitation to the generality of the foregoing, from inaccuracies and/or mistakes, for decisions and/or actions taken by any party based

  • n this documents.

Trademarks Cassa di Compensazione e Garanzia and CC&G are owned by Cassa di Compensazione e Garanzia S.p.A. Trademarks Monte Titoli, X-TRM and MT-X are owned by Monte Titoli S.p.A. London Stock Exchange, the coat of arms device and AIM are a registered trade mark of London Stock Exchange plc. The above trademarks and any other trademark owned by the London Stock Exchange Group cannot be used without express written consent by the Company having the ownership of the same. Borsa Italiana S.p.A. and its subsidiaries are subject to direction and coordination of London Stock Exchange Group Holdings (Italy) Ltd – Italian branch. The Group promotes and offers the post-trading services of Cassa di Compensazione e Garanzia S.p.A. and Monte Titoli S.p.A. in an equitable, transparent and non-discriminatory manner and on the basis of criteria and procedure aimed at assuring interoperability, security and equal treatment among market infrastructures, to all subjects who so request and are qualified in accordance with national and community legislation, applicable rules and decisions of the competent Authorities.