Swift completes acceptance testing for T2S
T2S is a new European settlement platform designed to simply post-trade
Swift has completed network acceptance testing for its connectivity service for T2S, the EU project to reform Europe’s post-trade infrastructure.
T2S was originally intended by the European Central Bank to create efficiencies in settlement, as a counterpart to the introduction of the euro. T2S aims to make post-trade processes easier by offering neutral, harmonised and commoditised delivery versus payment settlement in central bank funds across all European securities.
Swift was chosen following a public procurement process run by the Bank of Italy of behalf of the central banks of the Euro system. The firm had to complete a series of test cases to prove that its solution would meet all the requirements of T2S, including the last milestone, the Eurosystem Network Acceptance Test.
Swift’s Value-Added Network solution enables T2S participants to connect to the T2S platform so that they can exchange business information in ISO 20022 messaging format. Institutions that have already signed up include Germany’s central securities depository Clearstream, Euroclear, Spain’s Iberclear, Interbolsa, KDD Central Securities Clearing Corporation, Switzerland’s SIX Securities Services, BNP Paribas Securities Services, Citi, Deutsche Bank and Societe Generale Securities Services.
Several of these institutions including Clearstream and Euroclear signed up only recently, in September. The moves were something of a surprise as until recently many industry observers believed the large ICSDs and CSDs, along with the biggest global custodians, would take the direct connectivity route into T2S. But enthusiasm for the direct approach seems to be waning under concerns that the total cost of such a move too prohibitive.
Migration to T2S will take place in four waves – 1 June 2015, 2 March 2016, 3 September 2016 and 4 February 2017. Direct connectivity participants must declare their intentions to use this route by October 2013.
Swift is now supporting the testing activities of the European Central Bank and direct T2S participants in preparation for the go live of T2S, which is currently due in June 2015. The company has also set up various complementary products and services to help customers with testing and migration to the new platform.
“We are delighted to have reached this important milestone in the delivery of our connectivity solution for T2S, and I would like to thank the Banca d’Italia for its strong co-operation with us during the extensive series of tests,” said Alain Raes, chief executive EMEA and Asia Pacific, Swift. “Successful completion of network acceptance testing is yet another demonstration of this, and positions Swift well to move on to the next phases of this crucial programme for our community.”
