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Wax on, wax off: best practices and preparation for the next T2S Waves
Wax on, wax off: best practices and preparation for the next T2S Waves

Wax on, wax off: best practices and preparation for the next T2S Waves


Christian Houillon

Christian Houillon

Global Head of Local Clearing and Custody Product

BNP Paribas Securities Services

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With Wave 2 migration just behind us, our teams are actively preparing the next steps for the remaining ESES markets migration of September 2016. Germany, Austria and Hungary will be soon to follow. Here's how we are preparing for another busy year

Wax On – Preparation was key for T2S Wave 2

Surfing may seem simple – but a lot of preparation is needed before you can hit the waves.  You must have the right gear, including a board that is just the right size for your height and capability level. You then need to appropriately wax the board, and attach the fins and leg ropes, before you can even drive to the beach. Similarly there was a lot more preparation and behind the scenes work that took place prior to Wave 2 of T2S. Consider these 3 examples:


NBB-SSS fully decommissioned its legacy settlement and custody system and replaced it with a new one prior to T2S. The new system was as closely aligned to the T2S standards as possible and was implemented 1 year ahead of the T2S go-live date. This proved to be a smart choice since it allowed market participants to securely switch over; and also meant that the actual switch to T2S required minimal adjustments, especially  for settlement windows, cash and liquidity management, and market claims.


The T2S transition for Interbolsa was more complex due to the T2S requirements to conform with corporate action standards and debt securities conversion. There were several changes during the process, but the scheduled milestones were mostly met on time and corrections were managed quickly when necessary. The success factor was allowing participants to continuously perform testing.

BNP Paribas Securities Services

Since our single settlement platform was already operational and connected live to T2S, we could focus on bespoke client account setups and market specific adaptations. There were 3 key components of this Wave that we applied based on our learning. Firstly, by listening closely to client concerns, we were able to anticipate market and client updates as well as SSIs communication. We ran several webinars for clients to pass on insight and experiential anecdotes. Secondly, achieving harmonised practices across T2S markets is essential for success. Early and active  participation and discussion amongst market participants is important to  establish these practices. There were a number of AFME and local working groups where we contributed to achieve . Finally effective testing is required. We doubled the number of testing slots and reinforced testing resources for clients. We benefitted from the experience and feedback from testing Wave 1 scenarios.

Wax Off - Assembling Wave 3…and Wave 4!

T2S Wave 3 - Euroclear ESES - is now confirmed for 12 September 2016, and will be released in five steps between now and July. This will oblige market participants to map their testing plan accordingly, and to set some constraints to client testing frameworks.

The initial community test phase was delayed and some services were phased out. These will be delivered after the T2S migration and will entail additional adaptations for participants. In some cases, interim market practices, like the management of transformations (application of reorganization: corporate events on flows), will need to be defined. It also means that post-T2S, the ESES community will still have plenty of work ahead of it, not to mention the final stream of the corporate actions standards implementation, whose deadline was postponed to before the 2018 corporate acction season.

Only continued testing will tell, but there are good signs the ESES wave is back on track. We know Euroclear conducted a full review of its progress status, project organisation and plans. This translated into a clear roadmap and scope of services they delivered in January. The whole community must ensure that the scope of ESES services is kept unchanged now. Early this year Euroclear also successfully completed an internal dress rehearsal – which it could not have achieved last year – and another one in March with the whole market.  In addition, the community progressed very well in defining key market practices.

What’s next:

Let’s not forget Wave 4, including the German, Austrian and Hungarian markets to which we are directly connected. Community tests are set to start on July 8 with a first market migration dress rehearsal, which is only a couple of months away.


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