Movement behind the scenes
The SGSS model in the region follows Societe Generale’s footprint and is being developed against a backdrop of T2S, the harmonized settlement platform for securities in the eurozone. The European Central Bank Governing Council recently agreed the migration plan of CSDs to the new platform which includes a number of markets in the region.
“The potential for further development in the region's financial infrastructure regularly generates rumours and even news stories.”
At the current time there will be four migration waves, starting in June 22 2015 with the first wave migration including the Depozitarul Central which is the Romanian CSD. The second wave is currently not scheduled to involve any markets in the region but the third wave, which will take place on September 12 2016, will include KELER (Hungary), and Oesterreichische Kontrolbank (Austria).
The fourth wave will take place on February 6 2017 with the migration of Centralny depozitar cennych papierov SR (Slovak Republic), Eesti Vaartpaberikeskus (Estonia), Centralna klirinsko depotna (Slovenia) and Lietuvos centrinis vertybiniu popieriu depozitoriumas (Lithunania).
The potential for further development in the region's financial infrastructure regularly generates rumours and even news stories. A recent report on Bloomberg, for instance, noted how the Warsaw Stock Exchange and the Vienna Bourse are in the very early stages of discussing a merger that would create a hub for equities trading and initial share offerings in Central and Eastern Europe.
The talks come after years of competition between the two for influence in the region. Vienna expanded by buying the bourses in Ljubljana and Prague in 2008 and Budapest in 2004, beating Warsaw’s bid for Prague.
While Vienna and Prague had one initial public offering apiece since 2011, Warsaw attracted 41 as it lured companies by offering access to Poland’s cash-rich pension and mutual funds. The Warsaw Stock Exchange, central Europe’s biggest equity market, lists about 438 companies on its main market, with a combined value of about 168bn. The combined domestic market capitalisation of Vienna, Prague, Budapest and Ljubljana was 130bn at the end of January.
As the region is a strategic development zone for SGSS, the bank offers extensive coverage with 11 markets including the largest Russia. As a consequence, the SGSS network in the geography relies primarily on the Bank’s subsidiaries who are leading wholesale banks in their local markets, providing a large range of services and the best interfaces with local markets. The network provides the best of local expertise and market knowledge by serving local clients (including in many locations retail clients) and the benefits of having international experience as a multi-local custodian for risk management, operational efficiency and client service.
SGSS can leverage synergies with other business lines (the Investment Bank for example) to serve clients and benefit from the highest level of integration and influence in each of the different markets where it is located.
- T2S harmonised settlement platform progress
- Four migration wave details unveiled
- Warsaw, Vienna merger discussions