Six months with Danish kroner on T2S
The settlement ratio in the Danish market is back to pre-migration level. Knowing that parts of the market are still looking to optimize their settlement flow we continue to have a strong focus on improving functionality and performance to ensure high efficiency in the post-trade processes.
29 April marked the first six months of DKK settlement on the European T2S platform. The migration and go-live in late October met unexpected challenges and during four critical weeks after go-live, settlement fell to around 92 per cent.
The market participants and VP have been dedicated to handle the issues together in a transparent and focused way, with a fast-moving task force at the centre of the activities. Since then, the settlement level has stabilised at a satisfactory settlement ratio of 96 to 97 per cent, bringing the settlement ratio back to the pre-migration level and in line with the average settlement ratio on the T2S platform. With the improved settlement ratio, VP has initiated dialogues with the market and especially the custody banks who are servicing the foreign market participants on how to improve the settlement process even further.
“We have seen customers and partners work very professionally and with great dedication to handle the complex issues at hand. Now we can take a calmer look at these operational challenges from the rear-view mirror, as we week-by-week experience satisfactory levels of settled trades,” says Product Manager Kristoffer Kjelsø Sønderlev of VP Securities.
Though we are back to pre-migration level, VP acknowledges that some market participants are still struggling to achieve the same level of STP flow as before the migration. For that reason, and in close dialogue with market participants, VP is constantly improving the system functionality in order to increase operational efficiency. The first enhancements have been implemented and further enhancements are in the pipeline. Current developments involve better interaction between VP and T2S, including optimised link functionality and netting of transactions.
“We acknowledge the complexity and the issues that some of our market participants are facing. We will maintain close cooperation to resolve the issues and develop new functionality. Having said that, it is also time to look forward and realise the business benefits from this new infrastructure,” says Chief Commercial Officer Birger Schmidt of VP Securities.
Kristoffer Kjelsø Sønderlev
Head of Custody & Settlement Products
With VP on T2S you achieve a single point of access to Nordic and European distribution and settlement