Open Day 2016
T2S: preparing the step onto the platform
Volker Riebesell
5 October 2016
Open Day 2016
Deutsche Börse Group
Contents
02
04
05
06
T2S intro
Status T2S
Roadmap
Customer involvement and
information
07
10
14
16
T2S wave 4 – customer
simulation
Customer readiness
T2S migration weekend
Open forum: Q & A
1
Open Day 2016
Deutsche Börse Group
2
T2S – TARGET2-Securities
Goal
Please note:
§ With T2S, the ECB strives to harmonise processes and reduce costs for crossborder settlement. T2S will be the pan-European central platform for settling
securities against central bank money (EUR).
§ The Clearstream CSDs will migrate to T2S as of February 2017 to deliver more
efficient, better-valued and more harmonised services.
§ T2S platform is live since
July 2015
How to
§ Implied changes to almost all processes and systems related to settlement
§ Common cross-locational, cross-entity architecture FRA / LUX
§ Close alignment with Eurex Clearing T2S activities and other Deutsche Börse
Group entities
§ Ruling principles to apply to all measures
§ Shield customers from laborious T2S impacts as much as possible
§ Focus on risk mitigation for business migration
§ 23 CSDs signed up to
T2S. All project activities
are being coordinated
between these two and
the ECB.
§ Ten CSDs are live on
T2S (incl. Italy, Portugal,
NBB-Belgium, ESES).
§ CBF is the biggest CSD
on T2S and will double
the volume upon
migration in
February 2017.
Current status / next steps
§ Activities in line with plan / software development completed and rolled out for production
§ Status on customer readiness and migration tests
§ Migration test with other CSDs and ECB performed in April, July and September
§ Customer simulation between July 2016 and February 2017
Open Day 2016
Deutsche Börse Group
T2S – common European settlement platform
In April 2012, CBF signed the framework agreement
About T2S1)
§ ECOFIN2) asked the
Eurosystem not to limit
T2S to the euro area.
§ The legal set-up of T2S gives
guarantees to CSDs and non-euro
area NCBs having their accounts
in T2S.
§ T2S and harmonisation go hand in hand;
greater benefits if practices are
harmonised across the whole of Europe
T2S benefits
§ Reduce cross-border settlement fees
§ Real-time gross settlement (with
direct connection to cash accounts
at NCBs)
§ Increased liquidity and
stability
1)Source:
T2S CSD
§ In total, 23 CSDs will
participate in T2S,
including almost all CSDs
in the euro area as well as four
CSDs based outside the euro area.
§ Clearstream will be the largest
participant and will account for nearly
40% of all T2S volume in the euro zone
T2S challenges
§ Significant investments will be required
to make the necessary adaptions
§ Redefinition of operating strategy
and business model required
§ Participation of a large number
of involved parties out
of different markets
European Central Bank presentation „T2S: Settling without borders in Europe”, January 2012
– Economic and Financial Affairs Council
2)ECOFIN
3
Open Day 2016
Deutsche Börse Group
Status on ECB T2S project – milestones
Wave 3 – live, wave 4 – migration preparation
today
2016
Q2
§ T2S wave 3:
2017
Q3
Q4
Q1
Q2
Q3
Q4
User testing
Programme
phases
Migration
12 Sep 2016
(wave 3)
6 Feb 2017
(wave 4)
SP11.3 – 1 Aug 2016
Start business
day testing
SP12.3
– 26 Aug 2016
End of user
testing execution
phase
SP11.4
– 27 Dec 2016
Start business
day testing
Synch.
points
SP10.4
– 11 June 2016
Start community
testing
18 Sep 2017
(final wave)
SP10.5 – 13 Mar 2017
Start Community
Testing
SP12.4 – 20 Jan 2017
End of User Testing
SP14.4 – 22 Sep 2016
Ready to connect for
production
SP16.4 – 3 Feb 2017
Ready to go-live
SP15.4 – 3 Nov 2016
Ready to load SD
Legend: SP Milestone
CSDs (incl. ESES)
migrated to T2S
platform on 12
September 2016.
SP11.5 – 26 Sep 2017
Start multilateral
interoperability
testing
SP10.5 – 28 Aug 2017
End of user testing
§ T2S wave 4:
§
CBF entered in
the community
testing stage on
11 July 2016.
§
Further migration
weekend dress
rehearsal took
place on 1–2
October 2016.
4
Open Day 2016
Roadmap
We are here
2016
Q1
2017
Q2
Q3
Service readiness
Slice 5
7 Mar 2016: Rel 1.1
T2S release, bug fixes test
Cross-border test W4
Slice 7
Final
BAT
slice 7
27 Aug 2016:
Rel 1.1.5
Cross-border test wave 4
Q2
Q3
30 Sep 2016: delivery of slice 7
(variation orders)
BAT
slice 1–6
Slice 6
Q1
Q4
31 Mar 2016: delivery of slice 6
SW-development
Joint test (LUX / FFM) /
BAT
5
Deutsche Börse Group
TD final
regr.
test
26 Nov 2016: Rel 1.2
Migration test wave 4
Internal
Migration test W4
External readiness
Simulation CBF
Wave 3
INR
Preparation W 4
Operations related test
Wave 4
Bil. test
w/o cust
I/O env
Releases
CBF R. 16.4 (May)
CBF R. 16.6 (Sep)
CBF R. 16.7 (Nov)
CBL R. 16.3 (Jul)
CBL R. 16.3.1 (Sep)
CBL R. 16.4 (Oct)
CBL R. 16.5 (Nov)
External test phases
External
Multilateral test W4
Wave 4
Mul. test
w/o cust
I/O env
Mul. test
w. cust
I/O env
2 May 2016: launch CBF 16.4
12 Sep 2016: launch CBF 16.6
21 Nov 2016: launch CBF 16.7
02.07.2016: launch CBL 16.3
12.09.2016: launch CBL 16.3.1
15.10.2016: launch CBL 16.4
21 Nov 2016: launch CBL 16.5
Multilateral interoperability test
W4 community test
Community test / BD1) W4
Wave 4 migration test
Migration test W4
Migration weekend dress
rehearsals
W4 BD
15–17 Apr 2016: 20–22 May 2016:
MWDR2) w/o cust MWDR w/o cust
Go-live
1) W4 BD – Wave 4 ECB Business Day Test
2) MWDR – Migration Weekend Dress Rehearsal
28 Mar 2016:
T2S W2
7–10 July 2016:
MWDR w.cust
30 Sep–2 Oct 2016:
MWDR w/o cust
6 Feb 2017:
Go-live
CBF & LuxCSD
16–18 Dec 2016:
MWDR w.cust
12 Sep 2016:
3 Nov 2016:
T2S W3
start W4 Pre-Mig
6 Feb 2017:
T2S W4
18 Sep 2017
launch T2S final wave
Open Day 2016
Deutsche Börse Group
Customer involvement and information
Deutsche Börse AG has been actively involving customers
since 2011 to ensure community readiness for T2S
T2S information board
§
§
§
§
§
§
T2S customer business
events
Clearstream T2S bulletin
Clearstream T2S web portal
Clearstream T2S distribution list
Eurex Clearing focus groups
Eurex Clearing roadshow
Eurex Clearing newsflash
SPOC concept
§ The Eurex Clearing and
Clearstream single points of
contact (SPOC) on customer side
are the basis for close
collaboration within the
implementation phase.
§ Coordinate the communication of
Clearstream and Eurex Clearing
T2S-related activities
§
§
§
§
§
§
§
Deutsche Börse
customer
Bilateral meetings
Webinars
Workshops and roadshows
User advisory board
DUG / IIG
Effektenrunde
Eurex Clearing committees
T2S customer task force
§ Ensures awareness and identifies the
customer’s impact
§ Aligns adaptation requirements
between Deutsche Börse AG and its
customers for the implementation of
T2S
6
Open Day 2016
Deutsche Börse Group
7
T2S wave 4 – customer simulation
ECB’s overall schedule and Customer Simulation (ICP and DCP)
today
2016
July
Aug
Sep
Please note:
2017
Oct
Nov
Dec
Jan
Wave 3: launch
12 Sep 2016
Feb
Wave 4: launch
6 Feb 2017
ECB
§ The latest plan covers the
MWDR #2 timeline
Wave 4
Community test
DCP certification festing
DCP authorisation testing1)
Business
day test
Stabilisation
CBF
Preparation for MWDR #1
Preparation for MWDR #22)
Preparation for MWDR #3
6–13 July 2016: MWDR #1
1–2 Oct 2016 MWDR #2
15–21 Dec 2016 MWDR #3
Clean-up
Clean-up
CBF free simulation
during T2S community test
25 July – 11 Nov 2016
1) For CBF no dedicated authorisation applies as the coverage will be achieved by the simulation.
2) MWDR #2 will be conducted in a different environment.
§ All indicated dates may be
subject to changes due to
interruptions caused by
activities, e.g. release
deployments
CBF free
simulation
during T2S
business day
test
2–20 Jan 2017
Extended CBF
free simulation
periods
23 Jan – 24 Feb
2017
§ MWDR #3 in December
2016 and subsequent
customer free simulation
will be performed on the
T2S pre-production
environment (PPE)
§ This might require
additional set-up activities
by DCPs
§ It is currently in clarification
whether the pre-production
environment will be
connected to T2CUST
Open Day 2016
Deutsche Börse Group
T2S wave 4 – customer simulation
Eurex Clearing schedule
2016
July
Aug
Sep
2017
Oct
Nov
Dec
Jan
Wave 3: launch
12 Sep 2016
Feb
Wave 4: launch
6 Feb 2017
ECAG
Preparation for MWDR #1
7–10 July 2016: MWDR #1
Preparation for ECAG
migration test
ECAG migration test
1–2 Oct 2016
Preparation for MWDR #3
15–21 Dec 2016 MWDR #3
Clean-up
ECAG T2S
member
simulation
Bilateral testing
ECAG T2S
member
simulation
CCP member
simulation
CCP
member
simulation
Business
CCP
member day
simulation testing
CCP member
simulation
8
Open Day 2016
Deutsche Börse Group
9
T2S wave 4 – CBF customer simulation
Update: CBF services are supported to a higher degree than in
standard CBF simulation tests
Free simulation
§
§
§
§
§
§
§
§
§
§
§
FoP
DvP against EUR (via DCA)
DvP against other currencies (via
simulator)
Cross-border settlement1) with selected
In-CSDs2)
Settlement1) with CBL via simulator for
CBF account master 7201
CASCADE RS
T2S auto-collateralisation3)
CCP on ECAG batch days
LION on ECAG batch days
Bond stripping
Warrant detachment / warrant
re-attachment
Focus days
§ Corporate actions
§ BUND interest payment and
redemption
§ Dividend payment with record day
processing
§ Bonus share
§ Pari Passu
§ TEFRA D
§ New issues4): new admission, mark-up,
mark-down, withdrawal (only for lead
manager)
§ GC pooling
§ Cross-border settlement1) with Out-CSDs
§ Out-CSD SIX SIS5)
§ Out CSD DTCC via simulator
1) No custody for cross-border will be offered.
2) OeKB, Monte Titoli, ESES and SIS.
3) Depending on account set-up at NCB and CBF
4) Depending on customer feedback in simulation questionnaire, EDT will not be offered
5) Depending on bilateral agreement
Please note:
§ All productive channels
are available for
simulation
§ U2A
CASCADE Host,
CASCADE PC (new
version distributed on
8 July 2016)
§ A2A
FT, SWIFT, MQ
§ T2S daily schedule for
community test and
business day test is
available in the
“Simulation Guide –
Detailed Version“
Open Day 2016
Deutsche Börse Group
10
Customer readiness status
Customer simulation status
Customer simulation
environment (IMS23)
§ IMS23 was made available
in time on 25 July 2016
§ The system runs stable
§ If required maintenance /
release days are
communicated to
participants in appropriate
time
§ Customer settings1) are
updated on demand. All
orders are captured and
being processed in close
alignment with the customer.
Permanent task to be supported
and conducted by CBF.
Please note:
Customer participation
§ 142 CBF customers
registered for participation.
This represents a market
coverage of 98%
§ Nearly all customers started
with the test execution
§ In total 283.398
instructions2) have been
transmitted / entered in
IMS23 from the start until 18
September 2016
§ CBF noticed an average of
14 calls and 55 new mails
per simulation day.
No major issues have been
reported so far.
CBF Focus Days
§ Test execution for various
business cases was
conducted according to plan
§
§
§
§
§
TEFRA-D
New Issues
Bund Payment
Dividend
Non Income events
§ Cross-border settlement with
OeKB and DTCC was
supported. Test execution
with Monte Titoli and ESES
has been agreed.
Additional test cases can be
added for customer simulation.
1) Areas are Securities Accounts, Dedicated Cash Accounts, Connectivity for customers acting in ICP and DCP mode
2) Number covers all instructions entered by CBF for setup activities and the preparation of Focus Days
§ Setup issues in all three
areas have been
notified and meanwhile
resolved
§ In case a configuration
item is detected within
the different test
environments (IMS23,
T2S MIG2, T2Cust)
resolving or mitigating
actions will be setup
immediately
Open Day 2016
Deutsche Börse Group
11
Customer readiness status
Customer simulation progress reporting 1 Aug – 18 Sep 2016
Entered Transmitted Instructions
70000
60000
50000
40000
30000
20000
10000
0
§ In average 88%
customers
actively
participate in
customer
simulation on a
daily basis
§ Settlement
instructions in
all available
instruction types
can be entered
successfully
Open Day 2016
Deutsche Börse Group
T2S wave 4 customer readiness
Important deadlines in 2016
Deadline
Scope
Provision of static
data for new
accounts1) of
existing CBF
15 Oct 2016 customers to be
included in wave 4
production from
start4)
30 Mar
2016
Provision of static
data for all
accounts1) of new
and existing CBF
customers to be
included in wave 4
community testing
Set-up
Impact / risk,
if deadline is missed
ECB
milestones
T2S wave 4
Accounts1) may not be migrated
into T2S.
(mandatory)
3 months before
launch Wave 4:
start pre-migration
Accounts may not be operational
phase
after 5 Feb 2017.
Customer
simulation,
production
Accounts may not participate in
community MWDR on 9–10 July
2016 with customer participation
and CBF customer simulation
(within ECB community and
business day) from the
beginning.
Production
(mandatory for
DCPs, strongly
recommended
for ICPs3))
DCP accounts may not be ready
to take part in DCP connectivity
testing
9–10 July 2016:
MWDR with
customer
participation
(optional for ICPs)
1) “Accounts“ pertains to account master(s), sub-accounts, connectivity, access rights, PoAs.
2) Freeze will be lifted at the end of the official T2S stabilisation period (currently 4 weeks after wave 4 launch).
3) CBF will be testing on the basis of customers´ close-to-production data for the first time.
4) This is limited to standardised account set-ups (more complex set ups already earlier).
CBF preparative
Freeze2): with the start of the premigration phase, the entire CBF
customer account structure needs to
be stable and ready to be transferred.
Additional changes will increase the
risk that the migration of the resp.
account / holding fails.
§ Portfolio transfers and account
restructurings to be finalised to
ensure the testing of the premigration phase can be verified
§ New (master and sub) accounts to
be opened prior to set-up phase
for wave 4 community testing
§ Prospects aiming for ICP
connectivity to finalise their
account opening procedures
§ Customer account set-ups in DCP
mode (starting T2S wave 4) to be
finalised
12
Open Day 2016
Deutsche Börse Group
13
Customer readiness status
Majority of customers defined their future T2S static data set-up1)
T2S party BIC
Connectivity
300
500
400
300
T2S Party BIC
activated
535
200
All T2S Party BICs
have been
successfully
introduced in CBF
production
environment
2
250
Connectivity
settings to
be modified
200
150
271
100
100
50
0
0
Static data
DCP customers
600
16
500
3
400
T2S Static
Data (DCA)
Form missing
300
200
100
486
T2S Static
Data (DCA)
Form
received
0
1) Status as of 23 September 2016
For CBF accounts
without associated
Dedicated Cash
Account (DCA), no
DvP processing on the
T2S platform is
possible neither in
simulation nor in
production
14
12
10
8
6
4
2
0
14
T2Scompliant
connectivity
Setup
achieved
Without a T2S
compliant connectivity
setup instructions
cannot be sent /
migrated to T2S;
neither for the
simulation nor for the
production
§ All DCP setup forms
have been received
and introduced in
T2S MIG2
§ 8 DCPs achieved
certification at
Eurosystem
Open Day 2016
Deutsche Börse Group
14
T2S migration weekend – wave 4
Customer reporting on migration weekend
Customer connectivity inbound
Customer connectivity outbound – migration reporting
Cut-off for settlement
day Friday
Regular
outbound
Cut-off for migration
close queues
from customers
ICP customer
input blocked
1
Finalisation of settlement day Friday
2
Back-up for potential fall-back
(after cut-off for migration)
3
Cancellation processing by CSD
Position set-up via FoPs to T2S
§ Transfer of instructions
4
§ Settlement
§ Reconciliation
Migration of pending instructions to
5
T2S
Block outbound
traffic to
ICP customers
Print-formatted reports related to settlement
day Friday (currently 6.00 p.m. following
day)
Report “Loeschung wegen Migration T2S“
intended to be sent on Saturday at approx.
1.00 a.m.
T2S NTS Cycle 1
Report “Loeschung wegen
fehlgeschlagener Migration T2S“ intended
to be sent on Saturday close to 11.00 p.m.
7
Send new instructions to T2S
MT548 cancellation notifications “CANS“
8
T2S NTS cycle 2
6
Point of no return (PONR)
Open queues
from customers1)
9
T2S RTS processing
Start of T2S business day Tuesday:
Monday 6.45 p.m.
1) After this activity, Clearstream is nearly complete in standard T2S processing mode.
Open queues
and regular
outbound
Print-formatted reports related to settlement
day Monday
Additional (back-up) material
October 2016
Open Day 2016
Deutsche Börse Group
16
Leading market position: T2S enables Clearstream to benefit
from volume consolidation among participating markets
Pre-T2S
TARGET2-Securities (T2S) is a central technical platform for securities
settlement in euro and foreign currency in central bank money that will replace
existing models and redesign the post-trade landscape.
Savings of €30 to €70 million: organisation of collateral management and
other benefits of using T2S systems depending on the type and size of financial
institutions1):
§ Lower cross-border settlement costs (today: €2–52), with T2S: €0.253))
Post-T2S migration
§ Cash and securities pooling: central funding account and safekeeping of
assets enables settlement netting, reduces funding and eliminates friction
cost associated with todays fragmented pools.
§ Central collateral management and auto-collateralisation will create
financing efficiencies and drastically reduce securities realignments and
collateral consumption and thus support settlement credit.
§ National central banks will provide intraday settlement credit facilities for
free while commercial banks are expected to start charging; cash deposits at
national central banks attract no regulatory charge.
1) Outcome of Oliver Wayman’s study “The T2S Opportunity-Unlocking the hidden benefits of TARGET2-Securities”
2) Average charged by agent banks and ICSDs
3) Average cost calculated by ECB
Open Day 2016
Deutsche Börse Group
17
T2S wave 4 – CBF customer simulation
Recap: high-level simulation calendar – remains unchanged
§
MWDR on
1/2 October
Community
test
CBF free
simulation
MWDR on
17/18
December
Business day
test
CBF free
simulation
19 August: snapshot of dynamic data (instructions, positions) from CBF production as basis
for MWDR
28/29 September: customer instruction entry
30 September (evening) – 2 October (afternoon): migration weekend
3–5 October: initial testing is based on production-like data and volumes
06/07 October: clean-up period
Please note:
§
25 July – 11 November: the community testing will be conducted as CBF free simulation.
Focus days over the timeline of the community testing.
§
§
§
§
§
14 November – 14 December: pre-migration, IMS23 closed
15/16 December: customer instruction entry
17/18 December: migration weekend
19–21 December: T2S BAU days
22–26 December: clean-up period
§ The customer
simulation calendar is
available in the
“Simulation Guide –
Detailed Version“.
§
2–20 January: business day test based on same set of positions as used for start of
community testing on 25 July but with new snapshot for static data (snapshot date to be
confirmed)
23 January – 3 February: contingency buffer for simulation
04/05 February 2017: migration weekend, 06 February 2017: launch
6–24 February 2017: stabilisation period, simulation environment open with community
testing schedule (no focus days)
§
§
§
§
§
§
§
§ IMS23 will be
available even after
migration on
6 February 2017
during stabilisation
period for approx.
three weeks.
Open Day 2016
18
Deutsche Börse Group
T2S migration weekend – wave 4
Pending instructions: activities before PoNR (1/2)
During migration weekend
Friday, 3 Feb 2017
Saturday, 4 Feb 2017
18h 19h 20h 21h 22h 23h 00h 01h 02h 03h 04h 05h 06h 07h 08h 09h 10h 11h 12h 13h 14h 15h 16h 17h 18h 19h 20h 21h 22h 23h 00h
Position set-up part 1
New instructions out of KADI
Reconciliation instructions
ECB data saving
Technical launch
ECB data Saving
Final position CBF
1
T2S FoP settlement
Settlement
efficiency
T2S first
NTS cycle
Instruction
cancellation
§ Customer reporting1)
“List of instructions subject to automated cancellation process with start of migration weekend”
§ Automated cancellation
2
§
§
§
§
Migration of pending
instructions
Migration
Reconciliation
Repair / adjustments
Customer reporting1)
“List of instructions cancelled as their migration was not successful”
Legend:
Measures and actions to be taken by CBF
1) Reports will be provided via CMA-Spool after point of no return; impact on other (BAU) reports / messages currently assessed
Point of no return
Reconciliation of positions
Position set-up main packages (FoP)
Open Day 2016
Deutsche Börse Group
T2S migration weekend – wave 4
Pending instructions: activities before PoNR (2/2)
During Migration Weekend
Sunday, 4 Feb 2017
00h
01h
Responses NTS-1 / recon
02h
03h
04h
05h
06h
T2S last
NTS cycle
Point of no return
08h
09h
Maintenance
T2S / CBF
ICP
procedures
à Processing of queued instructions from customers acting in ICP mode
4
DCP procedure
§ Unlock DCP users
§ Information to customers acting in DCP mode
that T2S is ready to process their instructions
§ Re-instruction by DCP customers
Legend:
Activities to be conducted with / by customers
Measures and actions to be taken by CBF
10h
11h
Reconciliation cycle 2
New instructions incl . CCP
3
07h
RTS
19
Thank you for your attention.