Northern Trust has launched the Target2 Securities (T2S) strategy, designed to offer clients an enhanced range of asset safety holding structures, liquidity assurance and liquidity products.
To support this strategy, Northern Trust has selected Deutsche Bank AG and Euroclear SA/NV.
“T2S is a significant step forward in fostering greater efficiency and integration of Europe’s financial markets and reducing counterparty and settlement agent risk,” says Wilson Leech, head of Northern Trust in Europe, Middle East and Africa. “By appointing Deutsche Bank and Euroclear, Northern Trust is well positioned to support new centralised delivery-versus-payment settlement in central bank funds across European securities markets, on behalf of our clients.”
The European securities settlement system, T2S, aims to harmonise the securities settlement infrastructure in Europe, reducing costs of cross-border securities settlement and increasing competition amongst providers of post-trading services. It is expected to increase transparency and liquidity and promote asset safety.
Under the terms of the appointments, Northern Trust will establish direct market connectivity in a number of key European markets through Euroclear’s Investor Central Securities Depository (CSD) solution. Deutsche Bank will service the assets held in Northern Trust’s accounts directly at Euroclear’s Investor CSD.
“As the European securities settlement landscape continues to evolve, we are very pleased to have been selected by Northern Trust to provide an innovative solution that will enable them and their clients to capitalise on the new single market infrastructure,” says Satvinder Singh, head of institutional cash and securities services at Deutsche Bank. “This mandate reinforces our commitment to the success of T2S and our leadership position in Europe.”
“We are delighted that Northern Trust has appointed Euroclear as their central securities depository of choice to provide safe, efficient post-trade services with direct access to a number of key European securities markets," says Tim Howell, chief executive officer at Euroclear. "Euroclear's Investor CSD solution will ensure Northern Trust's clients benefit from enhanced transparency, access to liquidity and asset protection."