In 2017, the post-trade industry has seen a major infrastructure evolution. With completion of the European Central Bank’s TARGET2-Securities (T2S) project and preparations for the Central Securities Depositories Regulation (CSD-R), some fundamental changes have been kicked off in the European post-trade market.
Jeffrey Tessler
2017 was about reshaping and harmonizing Europe’s fragmented post-trade landscape to create a level playing field for all market participants”, said Jeffrey Tessler, Deutsche Börse Group Board Member and Chairman of the Group’s post-trade services provider Clearstream. “A lot of groundwork has been laid, with market infrastructures adapting their business models to the new regulatory requirements.
Earlier this year, as part of the third and largest T2S migration wave, Clearstream successfully brought the German and Luxembourg market onto the pan-European settlement platform. Following this step, the company helps market participants to reduce the complexity and costs of their market connections by providing a centralized access to the T2S market, international markets and global markets.
2018 will be all about equipping our clients to compete and succeed in this new environment,” Tessler adds. “We are harmonizing our connectivity channels, modernizing our custody network and improving our asset servicing and collateral management to make our customers’ lives a little easier – despite the regulatory burden and the uncertainty they are facing in the light of Brexit.
Clearstream is currently in the process of launching its new asset servicing model, which combines the company’s global settlement expertise with the market knowhow of local agents to simplify the asset servicing process on T2S.
Looking at Clearstream’s November figures, the positive development in the first nine months of 2017 (net revenues at €650.6 million YTD as of end Q3) has been confirmed by growing volumes. Investment Fund transactions increased by 23 percent (from 16.9 million YTD 2016 to 20.8 million YTD 2017), while Investment Funds under Custody rose by 17 percent (from €1,889 billion YTD in November 2016 to €2,204 billion YTD in November 2017). In April 2017, the firm’s Securities Lending activities reached the second highest volumes outstanding ever (€63.2 billion).
Business overview
| 11/2017 | 11/2016 | Change (%)* | YTD 2017 | YTD 2016 | Change (%)** | |
| International business (ICSD) | ||||||
| Securities deposits (EUR bn) | 6,641 | 6,807 | -2% | 6,709 | 6,747 | -1% |
| Number of transactions (m) | 4.2 | 3.4 | 23% | 40.9 | 32.6 | 25% |
| Domestic business (CSD)** | ||||||
| Securities deposits (EUR bn) | 4,628 | 4,436 | 4% | 4,538 | 4,409 | 3% |
| Number of transactions (m) | 8.9 | 6.8 | 31% | 84.5 | 71.0 | 19% |
| Investment Funds Services (IFS) | ||||||
| Securities deposits (EUR bn) | 2,348 | 1,971 | 19% | 2,204 | 1,889 | 17% |
| Number of transactions (m) | 2.1 | 1.8 | 17% | 20.8 | 16.9 | 23% |
| Total | ||||||
| Assets under Custody (EUR bn) | 13,617 | 13,214 | 3% | 13,451 | 13,045 | 3% |
| Global Securities Financing (GSF) | ||||||
| Volume outstanding (EUR bn) | 450.2 | 487.2 | -8% | 461.0 | 518.0 | -11% |
* Due to rounding, growth rates cannot be calculated from figures in the chart.
** On February 6, 2017, Clearstream Banking Frankfurt has transferred its settlement volume to the pan-European securities settlement platform TARGET2-Securities. Since February 7, 2017, German settlement volume is processed solely via T2S.