SWIFT, the inter-bank financial messaging provider and organiser of the Sibos trade show, has signed an agreement with Citi for the bank to use its Value Added Network (VAN) solution in order to connect to the Target2Securities (T2S) European securities settlement engine.
Citi selected SWIFT as its partner due its prominent existing position as a platform provider for financial payments and securities messages around the world. The bank says it is confident that with this history it will provide highly reliable and robust connectivity to T2S, which is due to come into force in 2015. A cheaper, economies-of-scale price no doubt helped as well.
The existing connections that Citi already has with SWIFT will also probably help to make it easier to integrate the new mandatory European securities settlement engine into its operations.
The objective of T2S is to facilitate post-trading integration by offering core, neutral, harmonised and commoditised delivery-versus-payment settlement in central bank money in substantially all securities in Europe. It is hoped the mandatory system will improve transparency post-crash.
SWIFT’s VAN solution will enable T2S participants to connect to the T2S platform for the secure exchange of business information in standardised ISO 20022 format, says the organisation.
Commenting on the deal Lee Waite, global head of direct custody and clearing at Citi’s transaction services unit, said: “We are confident that SWIFT is the right T2S connectivity solution for Citi, bringing unmatched benefits in terms of resilience, price and infrastructure reuse, and we look forward to working closely with SWIFT to implement its solution to meet our specific needs. Being able to rely on SWIFT for connectivity and to make our choice of VAN provider early on means that we can now focus on delivering the best possible service to our customers to enable them to capitalise on the opportunities T2S brings.”