T2S: How is it changing the regulatory landscape?
TARGET2-Securities (T2S) and regulatory changes such as CSDR, MiFID II and EMIR in Europe have created an imminent need for business transformation by capital market and market infrastructure organizations. T2S will soon be a reality, forcing CSDs and custodians to radically change the way in which they operate in Europe.
The T2S initiative by European Central Bank (ECB), aims to reduce overall cost of operations and processing by:
- Reducing the number of entities involved in the post trade processing lifecycle
- Standardizing the settlement process across European markets
- Leveraging the existence of a single currency in the Eurozone, it aims to make the cross-border settlement through EU at par with domestic settlement
The T2S initiative is fast dissolving the boundaries between the CSDs and the custodians. CSDs are exploring ways to enter the custody space while bigger global custodians are looking to enter into CSD space.
From a custody standpoint, while T2S provides opportunity for global custodians to enter local markets directly, it also provides opportunity for the local custodians to expand their services globally.
Preparing your business for T2S
The T2S solution from TCS BaNCS can help you achieve the following:
- Gain competitive advantage by minimizing the impact of adaptation changes and help build new service offerings with reduced time-to-market
- Rationalize your investments with optimal solution selection and lower running and maintenance costs of the target system
- Address critical T2S program dimensions of time and complexity with our comprehensive solutions and program accelerators
- Mitigate risk of non-compliance with pre-defined T2S transition waves using our best practice guidelines for IT customization, integration and migration
- Ensure ’business-as-usual’ for your organization before, during and after adaption to T2S
How can TCS BaNCS help you become T2S compliant?
The Securities Processing solution from TCS BaNCS is designed to cater to the needs of global as well as local custodians. Its ease of set up allows you to simultaneously act as global and local custodian depending on whether your decision is to go directly into the market or via a sub-custodian network.
The solution offers you the flexibility to choose between direct connectivity participants (DCP)to T2S model and the indirect connectivity participants (ICP) via CSD or a combination of both.
This solution is SWIFT-compliant, capable of supporting 15022 and 20022 messages. The intelligent routing rules in the solution provide a user-friendly configuration to whichever market you choose to go in DCP or ICP mode. For those embarking on the T2S transformation journey, the Securities Processing solution from TCS BaNCS offers an integrated settlement system.
TCS BaNCS plan for T2S transformation
Complete solution implementation: We help you replace existing non-scalable legacy systems with TCS BaNCS and integrate existing systems to handle the entire range of T2S business functions, thereby improving overall efficiencies while making your organization T2S and ISO 20022 compliant.
Retain existing legacy systems and help TCS BaNCS connect to T2S: We help you adapt to T2S with a bundled suite components for trade matching, settlement and processing along with connectivity to T2S, which minimizes impact on participant and internal systems.
We help you with:
- Techno-functional impact analysis
- Test strategy and planning
- Market testing
- DCP certification
- ICP certification
- Custody -Boost transaction processing speeds
- Corporate Actions – Speed up corporate actions
- Market Infrastructure – Build a strong foundation for business transformation
- Private Banking – Boost advisory capabilities and offer speedy solutions to customers
- Quartz – Blockchain technology
- Securities Trading -Enable fast and seamless connectivity in trading
- Securities Processing – Step up trading with Straight-Through-Processing
- Service Integrator – The financially aware middleware