UBS will be the first firm to use a new platform designed to provide banks and brokers with a single point of access to T2S.

The model, built by Clearstream and Citi, aims to allow companies to reap the maximum benefit from the pan-European settlement system.

Citi will provide clearing, settlement and asset servicing. Clearstream, the central securities depository (CSD), will supply safekeeping, lending, and securities financing solutions.

UBS will go live on the service at the start of 2017. 

Colin Parry, head of securities, collateral & derivatives at the Swiss bank, said the launch comes after many years of collaboration and planning with Clearstream and Citi, around how best to position ourselves for T2S.

“We expect network and operational simplification benefits, and also improved management of liquidity and collateral," said Parry.

"We believe that the model sets a new industry standard, will enhance our client value proposition and will unlock numerous front-to-back efficiency gains that allow us to play a part in hitting UBS's existing cost commitments."

Philip Brown, co-chief executive of Clearstream Banking Luxembourg, added that the model “brings together the best that each institution has to offer”, giving UBS a best-in-class service solution and meaningful commercial benefits.

The aim of T2S, short for Target2-Securities, is to standardise and commoditise settlement in Europe through a shared settlement platform operated by the Eurosystem.

As of the present moment three migration waves have happened and two more, containing some of the biggest markets, in particular Germany with 40% of the total volume, are still to come.

Last week Vincent Koller, a Luxembourg-based partner at KMPG, wrote that banks operating on the T2S platform have started to notice lower liquidity requirements to settle transactions.

"This is due to highly efficient optimisation algorithms and dedicated functionalities (single cash account for multiple markets, autocollateralisation, limit management, and others)," he wrote in a note to clients.

One of the benefits of T2S should be a reduction in settlement costs.

However, Koller reckons this will probably not materialise for some time still, due to delays in the project which may increase the settlement fees for a period.