Europe

New clearing models aimed at the buy-side are emerging in Europe as mandatory clearing approaches. Watch our interview with Eurex

As we looked at last week, Northern Trust mapped out its response to T2S very early on, meaning that it had everything in place for when the pan-European settlement platform went live on 22 June.

ICE Clear Singapore has received EMIR (European Market Infrastructure Regulation) authorisation from ESMA (European Securities and Markets Authority) to act as a third country CCP (Central Counterparty Clearinghouse). The regulatory regime in Singapore was deemed as equivalent by the European regulator in October 2014 and ICE Clear Singapore, along with fellow Singaporean clearinghouses, The Central Depositary Limited and Singapore Exchange Derivatives Clearing, applied for recognition under EMIR.

Northern Trust surprised its competitors by announcing how it would manage the transition to T2S a good nine months before the first markets joined the new settlement platform on 22 June 2015. Its solution was a practical one, which recognises the fact T2S is essentially a settlement platform. It combines direct access to T2S settlement services, with a single asset-servicing agent. To access central bank money at the ECB, Northern Trust is using its full bank branch in Luxembourg to enter the euro-system via the Banque Centrale du Luxembourg.

Alongside the need to identify and contain risk is the need for efficiency and transparency in financial transactions. Greater efficiency and transparency will assist in the identification and subsequent containment of risk, making it easier to quell. If investors, buyers and sellers are able to make the most of their available resources, it will promote a healthy financial system.

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