Opinions divided on bringing T2S to Asia

The topic of capital market harmonisation split the opinions of two industry experts as they discussed the roll out of TARGET2-Securities (T2S).

The European securities settlement platform is being discussed as a potential global standard, however at this year’s Sibos conference two speakers were divided on the ability to implement it in Asia.

“We should think about whether we can roll out T2S all over the world in other areas and regions,” said Roland Kipper, divisional head, group markets operations at Commerzbank. “This is something I would like to see, using T2S maybe in the Asia Pacific world.”

Euroclear’s head of product management, Jo Van de Velde, disagreed though, maintaining the fragmentation of Asia’s markets would stand in the way of a T2S introduction.

“Implementing in Europe makes sense in Europe because there is a single currency,” he said. “That is something you don’t have in Asia. From a liquidity management point of view you won’t achieve a lot.

“Implementing Target2 Securities will only have a full benefit to the extend that custody gets better harmonised. If you try to put a T2S engine into the Asian region, without having the same currency….I’m not sure exactly what you are trying to achieve.”