Monte Titoli, a London Stock Exchange (LSE) Group company, will connect to the TARGET2-Securities (T2S) single securities settlement engine in Europe in 2015 using the SIA and Colt technology platform.
The partners won the contract from the Italian central securities depository (CSD) to provide the necessary network infrastructure as one of two accredited Network Service Providers for T2S; the other being SWIFT's VAN solution. The Italy-based SIA, which recently changed ownership, was always the front runner to win the Monte Titoli contract to provide the tech and connectivity needed, via Colt, to allow the Italian CSD to access the centralised European settlement platform for domestic and cross-border securities transactions.
SIA and Colt recently completed the Eurosystem Network Acceptance Test as required under its seven-year license agreement with the German, French, Italian and Spanish central banks acting under the auspices of the European Central Bank (ECB) as the organisers of T2S. The technology firms successfully tested their systems one month ahead of schedule under the preparatory T2S Programme Plan and this no doubt attracted Monte Titoli’s attention.
SIA and Colt are also offering a message broker solution based upon its smart integrator advanced platform, which is intended to facilitate the easy integration of business applications into the TARGET2-Securities central platform. Monte Titoli has more than 400 international banks and brokers and this was likely another contributing factor in the award of the contract. The Italian CSD also offers services to more than 2,000 issuers. It will be among the first to migrate to T2S in June 2015, alongside Switzerland's SIX-SIS, with the major movers in 2016 being Euroclear and Clearstream as part of a staggered implementation plan, which is designed to reduce migration risks.
Commenting on the contract award, Massimo Arrighetti, chief executive officer (CEO) of SIA, said: “The decision by Monte Titoli to call on the support of SIA in the migration from its current domestic platform to T2S strengthens our collaboration with London Stock Exchange Group as its partner of choice and confirms our role as a competitive player in Europe.”
For Alessandro Di Michele, general manager at Monte Titoli, he is pleased to be partnering with SIA and Colt and to advance its implementation work for the T2S project. “Monte Titoli will be the largest CSD participating in the first wave of T2S, due to go live in 2015, which will provide our customers with access to a more harmonised, cost-efficient, settlement process,” he added.
T2S Project: The Background
TARGET2-Securities (T2S) is a project promoted by the ECB which will be managed by four central banks, consisting of Banca d’Italia, Deutsche Bundesbank, Banque de France and Banco de Espana. It is one of the key remaining initiatives for the creation of the single European financial market following the establishment of the euro currency, the TARGET2 banking network, the single euro payments area (SEPA), which has 1 February 2014 as its migration end date, and the Payment Services Directive (PSD) which has shaken up the payment sector in Europe.
According to forecasts from the ECB the T2S single securities settlement engine will be capable of handling a daily average of over 1m securities transactions, contributing to a significant reduction in cross-border settlement costs and further the project of European integration.
By Neil Ainger