Reviewing the implementation of T+2, the impact on the industry and what comes next (T2S)

The migration to T+2, unprecedented in its scale, is considered to have been a huge success as a result of the coordinated efforts of market participants in all the impacted countries. This transition occurred without the expected settlement failures. There is no regulatory enforcement of adherence to T+2 until the level 2 measures of the Central Securities Depository Regulation (CSDR) have been passed into European law. This means that any penalties imposed by this regulation will not come into effect until after the first wave of Target 2 Securities (T2S). Market participants are now concentrating on T2S preparations that will have a transformational impact on their processes and their supporting IT platforms. Wave 2 of T2S, planned for March 2016, is the target date for when the large European custodians plan to be ready with their transition programmes. It is planned that the post-T2S era will have a major impact on national CSDs that are in the process of redefining their target operating models to meet the new competitive landscape resulting from the move to T2S. The impact of T2S on national CSDs will not be fully visible until after the implementation of the major markets in waves 2 and 3.