CSD

Earlier this month, Euroclear UK & Ireland (EUI) issued a consultation to participants concerning their proposals to enhance the US dollar settlement arrangements in the CREST system, and make relevant changes to CREST documentation. Thomas Murray wholeheartedly supports these proposals.

This is the first in a series of four articles considering central bank payment systems self-assessments against the PFMIs.

Introduction and the Bank of England Example

In response to the financial crises of 2007-2009, at the behest of G20 governments, the Financial Stability Board and its constituent bodies developed broad global standards to shore up a system that had proven all too fragile – though it must be said that the public, regulated marketplaces did function throughout (except in isolated cases where for a few days their governments closed them for fear of collapsing prices). The same cannot be said of the freezing up of the far larger OTC and banks’ market operations in that period, which was the source of the economic and social damage inflicted.

HSBC has added the United States to its network of markets in which the bank clears and custodies the assets of its clients directly. HSBC has done all this, with varying degrees of difficulty, in dozens of markets around the world. But doing it in the United States is far from being a case of business-as-usual. It in fact marks a major break with the past. The question is why.

The Central Securities Clearing System (CSCS), the CSD for Nigeria, is upgrading its clearing and settlement platform, utilising Tata Consultancy Services’ platform, TCS BaNCS.

The move to this state of the art platform will enable CSCS to further align itself with global best practices and international standards, such as those outlined by the CPMI-IOSCO Principles for Financial Market Infrastructures, being increasingly looked at by global investors and banks. Many of the PFMIs are directly applicable to CSDs.

Euroclear has announced that its Belgian, Dutch and French CSDs will not be migrating to the ECBs flagship settlement platform, T2S (Target2-Securites) on 28 March 2016 as originally planned. This is the date for Wave 2 migration to the platform, following on from Wave 1 on 22 June 2015 and what some have termed Wave 1a on 31 August.

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