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T2S: getting ready for wave 3
T2S: getting ready for wave 3

T2S: getting ready for wave 3


We asked the European Central Bank’s Mehdi Manaa to look back at the first year since T2S went live, what has been learned, and the challenges that lie ahead

Can you give us an overview of where we are at with T2S today?

T2S recently celebrated the first anniversary of its launch on 22 June 2015. The past year has been busy, eventful and exciting for the whole T2S community. Seven central securities depositories (CSDs) and their communities currently operate on the platform. Since the beginning of 2016, an average of nearly 100,000 securities transactions have been settled each day. According to our projections, the number of transactions per day will increase to 550,000 by the time the remaining 16 CSDs have joined.

This summer we will be supporting the subsequent waves in their preparations for migration. The wave 3 participants will join T2S on 12 September. The last migration rehearsal, which we performed at the beginning of July together with the CSDs, their communities and the central banks in wave 3, went smoothly and indicated a good level of preparedness. 

What makes wave 3 so important?

Every wave is important because it brings us closer to the goal of establishing a truly pan-European platform for securities settlement. It will also substantially increase the volume of transactions settled on T2S. With wave 3 we will welcome five new CSDs to the platform, which will mean the platform will be processing about 45% of the total transaction volume expected by 2017.

A major portion of the project is behind us... What are the challenges that you see emerging for the coming waves?

The T2S platform has been live for more than a year, but the T2S project is still ongoing. Three more migration waves will take place by September 2017. We will continue working closely with the whole T2S community to ensure that everyone is sufficiently prepared to safely connect to the platform.

On the market side, the key challenge is to make sure that the entire user chain – from the CSDs to the end users – is familiar with the T2S functionalities and well-informed about the benefits of using them.

On the Eurosystem side, our main focus and challenge is the completion of the T2S migration. But it is also the right time to think about what follows next in order to build further on what T2S has delivered. We are already in the process of developing a strategy for the future of Europe’s financial market infrastructure, together with the other central banks of the euro area and the market. One aspect of this strategy is to build on the synergies between TARGET2 and T2S, the two platforms operated by the Eurosystem, with the possibility of consolidating their interfaces. Preparing T2S for the future, while taking into account market needs, new technological developments and cyber resilience will be among the challenges that we will face in the upcoming years.

How do you think the e-learning tool helps to prepare the industry?

To make the most out of T2S, the industry needs to understand the new opportunities available to it and to learn how to manage them effectively.

On one hand, end users should master the main functionalities of the platform. On the other hand, T2S offers a wide variety of state-of-the-art functionalities, such as auto-collateralisation, the hold and release mechanism, centralised securities and liquidity management. Their use has progressively increased since the launch of the platform, as the T2S participants have found their way around the functional toolset. These are areas where the e-learning tool can prove to be very helpful.


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