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11/04/2016

Dario Locatelli

Dario Locatelli

Product Manager Custody & Clearing

BNP Paribas Securities Services

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New options in cash and securities management under T2S

We have already highlighted that T2S provides new options for cash and securities management. And, as always when new options are available, a certain amount of assessment needs to take place. Some intermediaries are still assessing their ideal set up; others are already working to implement changes that will bring value to their business in terms of efficiency, simplification and risk management.

Cash and liquidity management is a subject that has received more and more attention both from CSD participants – and their clients.

At BNP Paribas we are consolidating all our cash flows in DCA accounts opened at Banque de France, and since the last weekend in March, our activity in the Nation Bank of Belgium and Interbolsa is now settled in the same account used for our wave 1 markets. = We are now allowing clients to keep their post trading activity with us – both settlement and custody – and at the same time, use their own central bank account to settle the counter value of the trades they ask us to manage. 

This is one of the new options offered by T2sS that might prove interesting for intermediaries that both use custodians and, in parallel, have their own DCA, opened to support their domestic activity that they manage directly with their national CSD.

Each and every client is different in terms of their needs, ambitions, available resources, priorities, core business – and their willingness and ability to insource liquidity management.

T2S allows market participants to combine cash and securities accounts pertaining to different entities, and across different markets, CDSs and central banks, in a flexible way. However, it requires some adaptations of the involved parties and to carefully analyse the domestic environment to assess all the possible effects; in particular with reference to responsibilities attribution and fiscal implications.

We now see this model as truly viable, as we have a client that is using BNP Paribas Securities Services as custodian for their Italian business and is also settling their own cash legs directly with their own central bank account.

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