t2s online - london stock exchange groupt2s online project review no 18, april 20 14 editorial news...

T2S OnLineP R O J E C T R E V I EWNo 18 , Ap r i l 2 014

EDITORIALNEWS FROM THE T2S PROJECTINSIGHT INTERVIEWSWITH MEHDI MANAA ANDPHILIPPE LEBLANCHIGHLIGHTS FROM THEFOURTH HARMONISATIONPROGRESS REPORT

T2S OnLine I No 18,April 2014 2

Jean-Michel Godeffroy

EDITORIAL

THE T2S COMMUNITY IS GETTING READY

I am happy to announce that on 31 March the 4CB delivered the T2S system to theEurosystem for its Acceptance Testing. This marks a key achievement in the T2SProgramme Plan. I would like to thank the 4CB for their tireless efforts to deliverT2S and to welcome Philippe Leblanc, who is interviewed in this issue, as the newProject Manager for the 4CB. My thanks also go to his predecessor Vincent Bonnierfor his outstanding contribution to both the T2S and TARGET2 projects.

What comes next? In this issue of T2S OnLine we present an interview with MehdiManaa, who explains what the Eurosystem Acceptance Testing (EAT) is all about. I hopethis interview will give you a good understanding of the EAT phase ahead.

In any project, the testing phase serves to identify defects.What matters to our clientsis transparency on the defects encountered and their timely resolution. Most bugs ordefects are handled by straightforward corrections in the software. For others, severaloptions may arise with various trade-offs. Is the T2S governance structure effectiveand resilient enough to take a rapid decision when this is the case? In my editorial,I want to look at this question.

Taking a look at the T2S governance diagram, you might wonder: “With so many boxesand arrows, how long does it take for them to reach a decision?” However, in recentmonths the T2S governance structure has shown its effectiveness in resolving difficultmatters in a swift and efficient manner, keeping in mind the common goal of ensuringthe timely and successful launch of T2S in 2015.


At the end of 2013 an issue emerged related to the T2S functionality for cross-CSDsettlement business. Resolving this defect required a swift solution and the advice ofthe market was sought at the Advisory Group meeting in November 2013. Multipleoptions were identified, all of which involved trade-offs and none of which stood outas optimal. In the month that followed, nine teleconferences and meetings took place.The issue was discussed by the Change Review Group, the Project Managers Group,the CSD Steering Group, the T2S Board and the Governing Council of the ECB.Discussions were constructive and efficient and, despite severe time constraints, theT2S Community reached a sufficient consensus on a solution, in line with the UserRequirements Document.The implementation of the agreed option is foreseen byMarch 2015 and measures are being taken to limit, to the extent possible, the impacton the preparations of the CSDs in the first migration wave.

It may seem complex to have a four-level governance structure with hundreds ofinstitutions involved. Nonetheless, this structure proved to be efficient in this incidentand, maybe more importantly, it ensures that major changes cannot be imposed by anygovernance body or by any institution without first being debated by the fullgovernance structure.

There are many possible ways to organise a governance structure. Defining the beststructure is never an easy task.Whether or not one is successful only becomes evidentduring difficulties. The objective of the T2S governance structure is to be transparentand to involve the full T2S Community, hence its complexity.

In this edition of T2S OnLine we offer you a selection of interesting articles. In additionto the ones mentioned above, Marc Bayle recalls recent T2S events and developments.Anna Nuzzolo provides a thorough update on the status and achievements of theharmonisation agenda, which is being led by the T2S Advisory Group. I am pleased withthe good progress and welcome the recently published Fourth T2S HarmonisationProgress Report.

I hope that you will enjoy this issue of T2S OnLine.

Jean-Michel GodeffroyChairman of the T2S Board

EDITORIAL


The T2S project is moving ahead according to plan, and important milestones continueto be achieved.This project update reflects the current focus on testing. Furthermore,it reveals the preparations of the T2S Community dealing with more and moreoperational issues in order to be ready for the go-live in June 2015. Last, but not least,we take a look at the progress in harmonisation.

Eurosystem Acceptance Testing (EAT)From the perspective of the T2S Programme Office, EAT activities are overall progressingas scheduled: EAT began on 31 March 2014 as planned, confirming the achievement ofSynchronisation Point 5 – Start of Eurosystem Acceptance Testing. On 20 January 2014,the 4CB had successfully made the test environment available for EAT activities byestablishing the first connection between the ECB and T2S. The fulfilment of SP5 is aresult of the steadfast commitment of the people working at the 4CB and the ECB toensure the success of T2S.

For the whole T2S Community, 2014 will be an intense year of testing and preparations.A first critical phase of EAT testing activities will run from now until September 2014.A key milestone will then be reached on 1 October 2014, when the T2S application willfinally be delivered to the CSDs for the user testing phase. See also “Entering a year oftesting – insight on the what, the who and the how!” in this issue.

User testingUser testing and migration measures are progressing as planned. The relevantdocumentation, ranging from the user testing reporting framework to the migrationtesting approach and plan, are currently being finalised.The preparatory work of CSDsand NCBs for the start of testing and migration is on track.

The T2S Board has approved the tests that the CSDs, central banks, directly connectedparties and directly connected DCA (dedicated cash account) holders will have to passin order to be certified by the Eurosystem. Each institution is requested to identify andinform the Eurosystem of the tests that it intends to take depending on the connectivitymode, communication mode and functionalities it will use in T2S.With the publicationof the certification tests, the Eurosystem aims to help the relevant institutions in planningfor and assessing the effort involved in taking such tests. Further information on theprocedures and forms for Eurosystem certification will be provided in April 2014.

Sizing of the T2S platformThe Eurosystem has explored the expected processing volumes and workloaddistribution during the T2S operational day. For lack of concrete input at this early stage,the sizing of the T2S platform will be designed based on assumptions of futureconsumption patterns provided by CSDs and NCBs.A “T2S daily processing model” hasbeen developed by the T2S Programme Office and the 4CB. It has been shared anddiscussed with the market. See also the volumetric model for T2S in the Insight sectionof T2S OnLine No. 17 for more information.

T2S Manual of Operational Procedures (MOP)The T2S Programme Office and the 4CB are currently drafting the MOP, in closecooperation with the central banks participating in TARGET2 and the CSDs that have

NEWS FROM THE T2S PROJECTMarc Bayle

T2S Programme Manager


signed the T2S Framework Agreement. It is a detailed operational framework that definesthe roles and responsibilities of all stakeholders in T2S live operations as well as theformal procedures to be followed in standard and non-standard situations.

The delivery of the MOP will be split into two releases.The first will include all aspectsof relevance for the start of user testing as well as detailed arrangements on howdecisions are taken, in particular in crisis situations. It was endorsed by the OperationsManagers Group in March 2014: another important milestone achieved last month.Thesecond MOP release is scheduled for September 2014.

Change requests approved since November 2013Since November 2013, twelve change requests of a non-critical nature have beenapproved by the T2S Board. Five of them were considered necessary as a result oftesting activities.Two change requests relate to corrections in the migration activities.Another five derive from amendments to the T2S User Requirements and the T2S UserDetailed Functional Specifications.The approval of these change requests will not havean impact on the T2S Programme Plan. The T2S User Requirements Document v5.03(URD), published in January 2014, takes these change requests into account.

Directly connected parties (DCPs) in T2SAfter expressing in October 2013 a non-binding interest in becoming a DCP in T2S, by3 March 2014 23 institutions declared their intention to do so for the cash side as ofthe first migration wave. 13 institutions declared the same for the securities side.The DCPs will interface directly with T2S via one of the two network providers SIA/Coltand SWIFT, subject to authorisation by their respective CSD(s)/NCB and certificationby the Eurosystem. Please see the Roundtable interview in the Insight section of T2SOnLine No. 17 for more information.

Moving forward on harmonisationMaking progress on the harmonisation agenda continued to be of key importance tothe Advisory Group (AG), as harmonisation enables market participants to reap the fullbenefits of T2S by avoiding post-trade barriers, present independently of T2S, which canmake cross-border settlement inefficient and costly. It is thus an important contributionto post-trade financial integration in the EU.

The Fourth T2S Harmonisation Progress Report was published on 19 March 2014 andshows the overall good progress towards harmonisation, with remarkable progress insome key markets. Please see “Facts and figures from the Fourth Harmonisation ProgressReport” in this issue for more information.

The Corporate Actions Sub-group (CASG) published its annual report on the T2Smarkets’ compliance with the T2S corporate actions (CA) standards at the end of 2013.In addition, a new issue of the T2S Special Series entitled “How will corporate actionsbe processed in T2S?” was delivered in January.The paper describes the general set-upof CA processing in T2S based on the market CA standards as well as the T2S CAstandards. It highlights the importance of the contribution of all relevant actors to theimplementation of the standards in order to achieve safe and efficient transactionmanagement in T2S. Harmonisation of CA processing is a key component of theharmonisation agenda for T2S markets.

NEWS FROM THE T2S PROJECT


The CSD Regulation (CSDR) recently approved by the Permanent RepresentativesCommittee (COREPER) is an important EU legislative initiative which provides animproved and harmonised legal framework for what T2S makes possible technically. Itis currently at the final stage of the adoption process, awaiting final adoption by theEuropean Parliament. In order to analyse the view of the T2S markets on the settlementdiscipline regime as established by the CSDR, the Task Force on the SettlementDiscipline Regime was set up ahead of the final CSDR adoption; this will enable progressto be made on the preparations for implementation.The inaugural meeting of the taskforce took place in February 2014.

Marc Bayle,T2S Programme Manager

NEWS FROM THE T2S PROJECT


ENTERING A YEAR OF TESTING – INSIGHT ON THE WHAT, WHO AND HOW

Interview with Mehdi Manaa, the Head of the Technical Programme Management Sectionof the T2S Programme Office.

TheTARGET2-Securities (T2S) programme is soon entering the EAT phase.Whatdoes this acronym stand for and why is it important for theT2S project?

EAT stands for Eurosystem Acceptance Testing. It is the phase in which the T2S platformdeveloped by the 4CB will be tested to see whether the Eurosystem can accept it.Thisessentially means checking whether the services delivered by the T2S platform complywith the defined scope of T2S. An important document in this respect is the UserRequirements Document (URD), sometimes referred to as the “T2S bible”! In an earlierphase of the project, the central securities depositories (CSDs), banks, central banks andother “users” contributed their requirements to this extensive document.The mainobjective of the EAT is to test compliance of the T2S services with this collective view ofwhat they ought to be. So before the users start with their testing, the EAT is a first “sealof approval” for T2S and that’s why it is important for the project.

How does the EAT phase fit into the overall T2S Programme Plan?

This is indeed a crucial question. Before delivering the software to the Eurosystem, the4CB will have already completed comprehensive tests.After the EAT, the CSDs and NCBswill test T2S extensively with their participants and from different perspectives.This meansthat overall there will be a lot of redundant testing, which gives a high degree ofreassurance as regards the quality of T2S, but is clearly not an optimal way of working. Sothe tricky question is how to minimise the redundancy and make the best use of eachtesting phase in order to avoid testing everything multiple times. For this reason, theEurosystem will apply the “80:20 rule” to the EAT, which means that we aim to limit thescope of the EAT to only 20% of all the possible test cases, but are selecting and designingthe test cases in a way that will allow us to detect 80% of the possible defects, therebyachieving a high level of confidence regarding the quality of the system.

How is the EAT phase organised and who is responsible for what?

The organisation of the EAT and the subsequent test phases is complex, as there are amultitude of actors and aspects. But the responsibilities are clear and simple.The EAT isthe responsibility of the Eurosystem and the ECB performs the EAT on behalf of theEurosystem.To achieve that, many actors are involved.We rely on providers of test tools,on the 4CB to deliver theT2S software and infrastructure, and on the Directorate GeneralInformation Systems of the ECB to provide and operate the testing infrastructure.Meanwhile, we will be monitoring and reporting how the testing is progressing, mainly totheT2S Board, but also to the other layers of the governance structure, in order to betterprepare and carry out the subsequent testing phases.

INSIGHTMehdi Manaa

Head of Section TPM


Based on the 4CB test results so far, what are your expectations for the EAT phase?

We are looking forward to starting the EAT.The latest information from the 4CB ispromising indeed. It is a big challenge to deliver T2S on time and with the expected quality.The 4CB are making a tremendous effort to reach this goal. For a project of this natureand size, I do not expect the EAT to be an easy journey. However, I have confidence inour ability to succeed together with the T2S Community.

If everything goes smoothly, what will follow after the EAT phase?

After T2S is accepted by the Eurosystem, the User Testing phase will start on 1October 2014. It will also be a challenging and interesting phase. However, the success ofthe EAT should create further confidence in the overall success of T2S.The start of theUser Testing phase is the start of the final stage before T2S goes live. This is fastapproaching, with the first wave of migration taking place in June 2015.

What can go wrong and what would be the impact on the overall programme?

Nothing can go wrong. As I said earlier, for a project of this size, we cannot expect theEAT to be an easy journey.We will face challenges, difficulties and unexpected situations,but we are well prepared for that, first at the level of the Eurosystem and the 4CB, butalso collectively with the T2S Community as a whole. Recent examples have shown thatthe T2S governance structure is very effective in facing and resolving the challenges posedby this unprecedented project. I am confident that the EAT and the T2S project can onlybe a success.

INSIGHT


INTERVIEW WITH PHILIPPE LEBLANC, THE NEW 4CB PROJECT MANAGERFOR T2S

On 1 February 2014 you took over from Vincent Bonnier asT2S Project Managerof the “4CB” – the four national central banks (NCBs) of Germany, Spain, Franceand Italy that were mandated by the Governing Council of the ECB to developand operateT2S.Although you are already well-known to many in theT2S project,we would like to use this interview to introduce you in your new role to the wholeT2S Community.

Like your predecessor, you were closely involved in TARGET2, the Eurosystem’sother common infrastructure project.What do you see as the main challenges andkey success factors of TARGET2 and T2S and what are, in your experience, themain differences between these two projects?

The main challenges for the development of market infrastructures such as TARGET2or T2S relate to delivering the service on time, within budget and with the expected levelof quality.Then after the go-live date, the challenge becomes a day-to-day one: ensuringa high level of availability and performance and dealing with any unexpected events inthe day-to-day operation of the system.The 3CB (which developed TARGET2) and 4CBare 100% committed to meeting these challenges.

As far as the key success factors are concerned, I am definitely convinced that beyondthe delivery of TARGET2 and T2S services, our success can be attributed to the highlevel of cooperation within the 3CB/4CB and the Eurosystem as well as with all otherstakeholders. In addition to the coordination role, as Project Manager this is an aspectto which I must pay particular attention.

T2S is being developed based on the same concept as TARGET2, in the sense that the3CB’s existing organisational set-up and way of working has been assimilated for T2S.Given all this, T2S should be seen as a result of evolution and not revolution.Nevertheless, working with four NCBs in T2S rather than three, as is the case forTARGET2, gives rise to a need for broader and deeper cooperation. In addition,TARGET2was developed from existing building blocks, while T2S is being built from scratch as abrand new system.

What are your expectations for the upcoming Eurosystem acceptance testing andhow will the 4CB support it?

All 4CB teams in charge of functional, development, operational and technical areas arecurrently fully committed to delivering the T2S market infrastructure in time to startEurosystem acceptance testing at the end of March. Even if our main objectives are aboutto be reached, all our teams are still working very hard in order to continually enhancethe quality of the software.The beginning of April will see an important shift: we willmove from a time-oriented approach to a customer-oriented approach.We will adaptour organisation, moving progressively from a project organisation to a productionorganisation, ready to deal with operational issues.

INSIGHTPhilippe Leblanc

4CB Project Manager for T2S


In the future, the 4CB will operate T2S and TARGET2 with a common team tomaximise synergies in running the two applications. To what extent will thisapproach affect the testing and migration ofT2S?

As mentioned above, our plan is to migrate progressively from a project organisation toa production organisation as of the start of the Eurosystem acceptance testing. Specifically,this move means that the operational team currently involved in the operation ofTARGET2 will also be involved in the operation of T2S during the testing and migrationphase. This transition step is essential because it will ensure the smooth operation ofT2S after it goes live.

Can you give our readers a broad overview of the 4CB organisational set-up andits specific role in theT2S programme?

The 4CB project organisational set-up (i.e. the project structure and management bodies)basically relies on a matrix arrangement that favours the cross-border dimension. In thisrespect, the development of processes for cross-NCB collaboration and decision-makingturned out to be instrumental in defining and promoting our values – belief in commonobjectives, a cooperative spirit and respect for cultural differences.The matrix is organisedwith each of the four NCBs allocated to a column and with five rows dedicated tospecific areas (functional, development, infrastructure, migration and liaison with collateralsystems).

INSIGHT


First, each NCB is responsible for its own resources.The National Project Manager isempowered to manage the resources for the timely completion of the project. Second,the project work is structured around four main areas (functional, development,infrastructure and migration) and, given the links between T2S and the CollateralManagement Systems (CMS), a CMS liaison function, which is a coordination activity ofa transversal nature, has also been set up. For each area, a coordinator monitors theprogress of work, facilitates cooperation between the area correspondents and nationalteams involved, and liaises as appropriate with other area coordinators. In each NCB,the tasks are carried out by the project team according to the division of responsibilitiesagreed between the 4CB. In order to address the multinational and multidimensionalaspects of the project, a Project Manager, supported by a Project Management Office(PMO), was appointed. I have now taken over this role and as such am responsible forthe administration, coordination and reporting regarding the overall project. I also oftenact as the voice of the 4CB and it is my job to defend its interests.

How do you expect your new role as 4CB T2S Project Manager to affect youpersonally and professionally?

From a professional perspective, I am happy and proud to have been chosen as the T2S4CB Project Manager. I take this opportunity to express my sincere thanks to VincentBonnier who helped me prepare for this very challenging task. I know that the comingmonths will be intense, but I am ready with the support of all the 4CB teams to meetthe challenge.

From a personal point of view, I very much enjoy working in an international environmentwith various teams that bring their own culture and way of working. It sometimes createsdifficulties, but it is without a doubt a source of motivation and personal enrichment.

Many thanks, Philippe, and we wish you a great deal of success and satisfactionin your new role!


T2S COMMUNITY AT WORK: HIGHLIGHTS FROM THE FOURTH T2SHARMONISATION PROGRESS REPORT

At the conference on post-trade harmonisation held in Frankfurt on 19 March 2013,almost exactly one year ago, some speakers defined the harmonisation process as stillbeing a “bumpy ride”. But heavy works are in progress to improve the road conditionson the way to post-trade harmonisation in Europe, and although T2S cannot be expectedto address all aspects of this task, it is indisputable that the project has provided theurgency and motivation for many actors to fix at least the most important parts of theroute.

The number of people and institutions at work to make that road smooth in time forT2S is impressive. Behind the Fourth T2S Harmonisation Progress Report, which waspublished on 19 March, there are the over 90 high-level practitioners and centralbankers that make up the T2S Advisory Group. The Advisory Group is supported bythe Harmonisation Steering Group, mainly composed of senior representatives fromthe securities industry, while the 21 T2S National User Groups represent and steer thework of the individual national markets. In addition, the EU Commission looks favourablyat the initiative, which complements its Single Market efforts. Even those who are notdirectly part of the settlement industry appreciate the great potential for financialintegration within the T2S harmonisation work.

It is widely agreed that the benefits of T2S in terms of seamless cross-CSD activitylargely depend on whether or not frictions in cross-border holdings and settlement arereduced – in other words, on the success of the harmonisation agenda. In fact, marketparticipants indicated from the early days of T2S that post-trade harmonisation was oneof the main drivers behind their support for the Eurosystem’s project.With T2S usertesting and migration just around the corner, the focus is on T2S market readiness,including their readiness to test and operate in line with the T2S harmonisationstandards.

The recently published Fourth T2S Harmonisation Progress Report looks at exactly thisand the below gives a brief overview of some of the findings.

The Advisory Group regularly gathers information from different sources in the nationalmarkets on their current status of implementation as regards the T2S harmonisationstandards, and assigns to them a red, yellow, or green “traffic light” accordingly. In somecases, markets already meet the standards and have already updated their operationalor legal frameworks in order to comply with them: in such a case, the status is “blue”,which means “you have reached your destination”!

In this way, a system of harmonisation traffic lights has been set up along the works site;the lights give a good idea of which stretches of the road are already paved and whichare still uneven.The report presents the assessment made of all 21 T2S markets as faras 15 harmonisation areas are concerned (five more than in the last report).

INSIGHT


Table 1 – Overall status of T2S harmonisation activities(as at 13 February 2014)

Prio

rity

1Pr

iori

ty2

T2S

Mar

kets

1 T2S

mes

sage

sIS

O20

022

2

Man

dato

ryM

atch

ing

�eld

s

3

Inte

ract

ion

with

T2S

(Reg

istr

atio

n)

4

Inte

ract

ion

with

T2S

(Tax

Proc

edur

e)

5

Inte

ract

ion

with

T2S

(CSD

anci

llary

serv

ices

)

6

Sche

dule

for

sett

lem

ent

day

7

T2S

CAst

anda

rds

9 T2S

Sett

lem

ent

�nal

ityII

10 T2S

Sett

lem

ent

Fina

lity

III

14

Ava

ilabi

lity

ofom

nibu

sac

coun

ts

15

Rest

rictio

nson

omni

bus

acco

unts

16

Secu

ritie

sac

coun

tnu

mbe

r

17 Cash

acco

unt

num

ber

19

CAm

arke

tst

anda

rds

(CA

JWG

)

24

Secu

ritie

sam

ount

data

AT

GG

BB

BG

RB

BB

BG

GG

B

BE–

BNYM

GG

GG

GG

GG

BB

BG

GY

G

BEEu

rocl

ear

GG

BB

BG

GB

GB

BG

GG

B

BE–

NBB

-SSS

GG

BB

BG

GG

GB

BG

GG

B

CHG

GB

BB

YG

YG

BB

GN

AY

B

DE

GG

BB

BG

RG

GB

BG

GG

B

DK

GG

BB

BG

RB

YB

BG

GG

B

EEG

GB

BB

GG

BG

BB

GG

YB

ESG

GG

BB

GY

BB

BB

GB

GB

FIG

GB

BB

GG

BB

BY

GG

YY

FRG

GB

BG

GG

BG

BB

GG

YB

GR

–BO

GS

GG

BB

BG

GB

GB

BG

GG

B

HU

GG

BB

GG

YG

GB

BG

NA

RB

ITG

GB

BR

GG

BG

BB

GB

GB

LTG

GY

BB

GY

YY

BB

GG

RB

LU–

LUX

CSD

GG

BB

BG

YG

BB

BG

GY

B

LU–

VPLU

XG

GB

BB

GR

BB

BB

GG

YB

LVG

GB

BB

GY

GY

BB

GG

GG

MT

GG

BB

BY

GB

BB

BG

GY

B

NL

GG

BB

BG

GB

GB

BG

GG

B

PTG

GB

BG

GG

GG

BY

GB

GG

ROG

GB

BB

GY

BG

BB

GG

YB

SIG

GB

BB

GR

GG

BB

GG

RG

SKG

GG

BB

GG

GG

BY

GG

R-N

oin

foY

Sum

mar

y13

/02/

2014

Gre

en:2

4G

reen

:24

Blue

:20

Gre

en:3

Yello

w:1

Blue

:23

Gre

en:1

Blue

:19

Gre

en:4

Red:

1

Gre

en:2

2Ye

llow

:2G

reen

:13

Yello

w:6

Red:

5

Blue

:13

Gre

en:9

Yello

w:2

Blue

:7G

reen

:14

Yello

w:3

Blue

:24

Blue

:21

Yello

w:3

Gre

en:2

4Bl

ue:3

Gre

en:1

9G

reen

:11

Yello

w:9

Red:

4

Blue

:18

Gre

en:4

Yello

w:2

Sum

mar

y19

/03/

2013

Gre

en:2

1Ye

llow

:1G

reen

:15

Yello

w:2

Red:

5

Gre

en:N

AYe

llow

:NA

Gre

en:N

AYe

llow

:NA

Gre

en:N

AYe

llow

:NA

Gre

en:1

3Ye

llow

:8Re

d:1

Gre

en:5

Yello

w:8

Red:

9

Blue

:12

Gre

en:5

Yello

w:5

Blue

:3G

reen

:14

Yello

w:5

Blue

:22

Blue

:19

Yello

w:3

Gre

en:N

AYe

llow

:NA

Gre

en:N

AYe

llow

:NA

Gre

en:8

Yello

w:4

Red:

10

Blue

:19

Gre

en:1

Red:

2

INSIGHT


Table 2 - Compliance status per T2S market (as at 13 February 2014)

The overall compliance rate has increased remarkably since last year and has reacheda good level. Looking at the 13 monitored activities that have higher priority in view ofthe launch of T2S (e.g.T2S ISO 20022 messages, the schedule for the settlement day,settlement finality rules and the provision of omnibus accounts to non-residentintermediaries), the rate of cases where markets are already compliant or well on theirway to compliance amounts to 92% (green or blue lights). Of the remaining cases, only2% are standing at a red light, i.e. are facing the most critical barriers.

One of the cases that still stand out for the high number of red and yellow lights acrossT2S markets is the T2S corporate actions standards, the adoption of which is extremelyimportant for the efficiency and safety of cross-CSD settlement in T2S. As many as11 markets/CSDs are still facing difficulties with their implementation, which in somecases requires a change in national regulations or law. Although the red/yellow rate hasfallen significantly since last year, this area continues to require action as T2S user testingdraws closer.

You will find a high-level account of the main findings of this reporting cycle in the KeyMessages and Executive Summary that open the Fourth T2S Harmonisation ProgressReport. Reading on, you can get more details on the status of each harmonisation area

Activities – priority 1 De�nition Monitor Compliance

1 T2S ISO 20022 messages G G G

2l T2S mandatory matching �elds G G G

3r T2S Messages Interaction for registration G G G

4 Interaction for tax info G G G

5e Interaction for CSD ancillary services G G G

6 Schedule for the settlement day G G G

7 T2S Corporate actions standards G G R

8 Settlement �nality I (moment of entry) R X X

9 Legal harmonisation Settlement �nality II (irrevocability of transfer order) G G G

10 Settlement �nality III (irrevocability of transfers) G G G

11 Outsourcing IT services R X X

12 Settlement discipline regime R X X

13 Settlement cycles Y X X

14 CSD Account structures Availability of Omnibus Accounts G G B

15 Restrictions on Omnibus Accounts G G G

16 T2S Accounts Numbering Securities accounts numbering G G G

17 Dedicated cash accounts numbering G G G

Activities – priority 2 De�nition Monitor Compliance

18 Legal harmonisation Location of Securities Account/Con�icts of Law R X X

19 Corporate actions market standards CA market (CAJWG) standards G G Y

20 Place of issuance R X X

21 Tax procedures Withholding tax procedures G R X

22 Shareholder transparency - registration R X X

23 Market access R X X

24 Securities amount data G G G

INSIGHT


for each T2S market. In one of the annexes you will also find an overview of the actionsplanned by the national markets marked in red or yellow to achieve compliance in timefor T2S.

The Advisory Group will continue monitoring those cases, and start monitoring newareas as soon as the related standards are defined and agreed by the T2S Communityor the EU authorities. In particular, the adoption of the CSD Regulation – which isexpected soon – will allow for the launch of newT2S harmonisation tasks and the set-upof new traffic lights at very important junctions in the road.

Thanks to the commitment of all stakeholders, travelling down the harmonisation roadalready feels less “bumpy”.Work in the months ahead will concentrate on filling in theremaining gaps and ensuring safe and efficient travel on the road in the future.

If you are interested in following the T2S Community’s work on harmonisation, pleasekeep an eye on www.harmonisation.t2s.eu, where you will find regular updates.

Anna Nuzzolo,T2S Programme Office

INSIGHT


What is T2S OnLine?T2S OnLine is the T2S Programme’s review. It provides you with project updates,insights intoT2S and details on the current outlook of the project.We hope you willfind T2S OnLine to be an enjoyable tool for obtaining up-to-date information aboutT2S.

Where can you find T2S OnLine?T2S OnLine is published on the T2S website (www.t2s.eu), with the option to printif you would like to have a hard copy.

How can you contribute?We are happy to hear your views on T2S OnLine. If you have any comments, or ifyou would like to propose a subject for an article, please contact us by e-mail [email protected]

Elin Amundsen,Anna Nuzzolo and Patrick Hess,T2S Programme Office1 http://www.ecb.europa.eu/paym/t2s/html/index.en.

Follow us on Twitter @T2SECB

T2S Youtube channel:http://www.youtube.com/playlist?list=PL347E929CBF4A76F7&feature=plcp

T2S IS ONLINE FOR YOU

© European Central Bank, April 2014

AddressEuropean Central BankKaiserstrasse 2960311 Frankfurt am Main, Germany

Postal AddressPostfach 16 03 1960066 Frankfurt am Main, Germany

Websitehttp://www.ecb.europa.eu

t2s online - london stock exchange groupt2s online project review no 18, april 20 14 editorial news...

Documents