Adapting a back office to Target2Securities, Europe's new securities settlement platform, could cost as much as €27 million if a revamp of both settlement and custody systems is required.
But players such as banks, central securities depositaries (CSDs) and custodians could get away with paying €7 million if they modify their existing system using a communication hub plus adaptation layers.
The predictions are in a survey by research firm Celent that found there is much work still to do to prepare for the T2S platform, which is scheduled to go live in 2015.
The post-trade providers that will be most affected by T2S – the CSDs and custodians – have gone furthest with their preparations, found the survey, while banks and broker/dealers are at a less advanced stage.
“We have found that while most market participants have a good high-level understanding of the T2S platform, there are some significant gaps in the industry’s T2S adaptation plan,” says Axel Pierron, the author of the report.
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