T2S is an important step in fixing Europe’s frag¬mented settlement system and could provide much-needed financial stabil¬ity by reducing the risks and costs associated with cross-border transactions.

1. • Cognizant Reports
TARGET2-Securities Platform:
Implications for the Post-Trade Arena
Executive Summary been fueled by the Undertakings for Collective
Over the past two decades, the European Union’s Investment in Transferable Securities (UCITS) IV
(EU) single financial market initiative has deliv- directive, the cross-border merger of corporations
ered price stability, reduced exchange rate uncer- and algorithmic trading. With this increase, the
tainty and sliced transaction costs. However, the inefficiencies of the fragmented infrastructure,
EU’s financial market infrastructure remains combined with disconnected practices, have
largely fragmented. While regulations such as the exacerbated an already expensive proposition —
Markets in Financial Instruments Directive (MiFID) that of rising transaction costs, post-trade.
aim to bring interoperability to the pre-trade
space, the post-trade arena continues to languish Numerous studies, conducted across multiple
in silo fashion, adding unnecessary costs at a time levels of the ailing European securities market,
when financial houses large and small are strug- have pointed to many of the root causes of
gling to make ends meet. In fact, cross-border post-trade cost creep; however, the most
transactions in the EU vis-à-vis the U.S. are highly significant is a report issued by the Giovannini
expensive and involve numerous intermediaries. Group1 that identifies the barriers to an efficient
pan-European market infrastructure and makes
The great disparity in costs results from Europe’s recommendations for removing them.
longstanding fragmented post-trade infrastruc-
ture that originates from different nationalistic In alignment with efforts to remove the “Giovan-
standards and practices. While clearing and nini barriers,” several market-led initiatives
settlement systems in various EU countries are have been undertaken that aim to harmonize
efficient in meeting domestic market require- practices at the pan-European level and system-
ments, they have not been updated to atically address the legal and structural issues.
accommodate the rising requirements of cross- Target2-Securities (T2S) is one such market-led
border settlements that are so critical in today’s initiative developed to address several of the
global economy. Giovannini barriers.
In Europe, several factors have worked to shift The T2S platform is conceptualized and designed
the trading focus to pan-European, cross-border to create a “pan-European domestic” market for
strategies. While the advent of the euro paved securities settlement, with a clear objective of
the way, the rise in cross-border trade has also aligning the costs for cross-border settlement in
cognizant reports | january 2012

2. the Eurozone with the levels of domestic settle- T2S does mark a starting point to a truly harmo-
ment costs. T2S’s impact on market participants nized European settlement landscape. However, in
would be huge, causing some players to consider the long run, further harmonization, in areas such
fundamentally changing their business models. as securities laws and tax, will be key to reducing
For example, the impact on Central Securities transaction costs for banks across the continent.
Depositories (CSD) would include the following:
Lost revenue from settlement services, driving What is T2S?
CSDs to expand their services. The T2S project intends to build a pan-European
Likely consolidation in the long run. domestic settlement marketplace, similar to MiFID
The need to reshape their IT infrastructure. for pre-trade and the Single European Payment
Area (SEPA) initiative for payments. The plat-
Meanwhile, the impact on global custodians would form, conceptualized in 2006, is owned and
include the following: developed by the Eurosystem monetary authority
and will also be operated by this organization. It is
The opportunity to rationalize their settlement built on the same concept as the Trans-European
value chain. Automated Real-Time Gross Settlement Express
The need to invest in systems upgrades to Transfer System (TARGET2). T2S is designed to
achieve full benefits. settle exclusively in central bank money (CeBM)3
Declining revenues for sub-custodians, from over respective NCBs4 to achieve higher market
services to global custodians. efficiency and safe settlement. It will also be
The option to use local expertise to provide capable of settling securities transactions from
niche offerings, such as tax services. non-Euro markets, subject to the participation of
the respective central banks.
The European Central Bank (ECB) has been able
to generate significant buy-in from domestic In essence, T2S is a platform capable of
European players. However, the project has expe- receiving settlement instructions, matching
rienced repeated delays; in fact, its expected them and reaching settlement, finally resulting
go-live date of 2013 was first postponed to in the generation of irrevocable booking entries.
September 2014 and then further delayed to It will act as a technical platform to which the
2015. The project has attracted its share of National Central Securities Depositories (NCSDs)5
controversy, with national banks in the UK and can outsource their settlement process (see
Switzerland opting out of participation in the Figure 1). NCSDs continue to retain the ownership
initial wave of migration,2 amid questions of custody accounts and other custodial services
surrounding the platform’s value proposition. for their customers; in that sense, they remain
the designated settlement system under the
Settlement Finality Directive (SFD).
The T2S Framework
T2S
Validation and matching
Securities
CSD A CSD A Optimization NCB A NCB A
accounts of settlement accounts
CSD B CSD B Settlement and NCB B NCB B
accounts realignment accounts
CSD C NCB C
CSD C NCB C
accounts accounts
Source: European Central Bank
Figure 1
cognizant reports 2

3. Key aspects of T2S that have significant business cross-border securities trading to soar. However,
implications include: the post-trade areas of clearing and settlement
have not been integrated across national EU
Support for ISO 20022 messages, exclusively. boundaries (see Figure 2). There are 41 CSDs
Harmonized settlement calendar for all operating in the current trading landscape.
participating markets (NCSDs).
Optional participation of NCSDs, even in the Comparatively, the U.S. has a centralized clearing
Eurozone. However, it is believed that market and settlement infrastructure — the Depository
forces will automatically encourage NCSDs to Trust and Clearing Corporation (DTCC), which
participate. handles clearing and settlement of corporate
A multi-currency platform that can be bonds and equities — and the Federal Reserve
extended beyond the Eurozone to achieve System, which processes securities issued by
additional economies of scale to further drive the U.S. government, federal agencies and
down settlement costs. government-sponsored enterprises (see Figure 3,
Requirement for national-level specificities page 5).
to be externalized and managed by respec-
tive NCSDs, due to a design that encourages The cost of cross-border transactions in the EU is
a harmonized settlement process at a pan- said to be 10 times6 higher than domestic equity
European level. It is not yet clear if NCSDs will transactions. An end-to-end cross-border securi-
be able to decommission their current settle- ties trade in Europe may require the involvement
ment platform and migrate to T2S to support a of as many as 11 intermediaries and 14 instructions
pan-European settlement platform for domes- between trading parties. This results in increased
tic as well as cross-border settlement. The liquidity, counterparty and settlement risks. The
inability to shut down or decommission the settlement landscape in Europe is typified by
legacy (domestic) settlement infrastructure different rules, settlement cycles and charges
may be the key barrier preventing banks from levied by different countries. These differences
reaping the cost benefits associated with T2S. add complexity to the trading process, making it
Ability for market participants to choose difficult for banks to mitigate the risks involved in
whether they become direct participants in delivery vs. payment (DvP) across borders.
T2S, while still retaining their relationship with
respective NCSDs. The involvement of numerous intermediar-
ies (custodian/agent banks) in cross-border
transactions adds significant cost. Furthermore,
Need for T2S various business models have emerged in EU
The euro, combined with other market forces countries over the past few years that have added
(see sidebar, next page), has caused European to the complexity of settlement. In Germany,
Securities Settlement Landscape in Europe Before T2S
Market Participants
Custodians
CSD A CSD C
CSD E
CSD B
Custodians CSD x
CSD D
Links
Note: No integrated cross-border settlement process in a single market; includes two ICSDs and multiple national CSDs.
Source: “The European Post-Trading Environment and T2S”, Central Bank of Cyprus, 2009.
Figure 2
cognizant reports 3

4. Major Forces Driving Cross-Border Trade in the European Union
The number of cross-border mergers is on the rise.
With the advent of the euro, the investment strategy and asset allocation of many banks
has become more sectoral than traditional currency-/country-based activities, resulting in the
virtual elimination of country considerations.
The development of trading strategies, such as algorithmic trading, is exploiting technological
advancements in the trading arena. These strategies derive their value from very fine price
differentials; profitability of a trade depends on the total cost of executing it – including the
direct and indirect cost of clearing and settlement.
The introduction of UCITS IV legislation allows fund managers domiciled in one European Union
to distribute funds across the EU. UCITS IV also supports cross-border investments across the
European Union through master feeder structures.
for example, Deutsche Börse (a stock exchange), Real-time gross, commoditized and harmo-
Eurex Clearing (the CCP) and Clearstream nized DvP settlement in central bank money.
Banking Frankfurt (the CSD) belong to the same Optimized collateral management through
group (a vertically integrated model). Euroclear intraday transfer of collateral among CSDs
has created a common settlement engine for over an extended time window, working in
Belgium, France and the Netherlands (an example conjunction with the Collateral Central Bank
of more horizontal, cross-border consolidation Management Model (CCBM2) and TARGET2.
and harmonization). An IT platform to accommodate market
participants’ central bank cash and securities
However, a lack of common standards, ineffective accounts in one place.
market practices and a fragmented infrastruc-
ture that is not conducive to interoperability is By creating a single platform for securities
hindering progress. This results in higher costs settlement, T2S is expected to enable competi-
for market participants, as their systems, organi- tion in the area and will have important implica-
zational structures and processes need to reflect tions for market participants in the post-trade
these variations. They also need to maintain a value chain, including CSDs, global custodians and
multiple set of agent institutions to participate in sub-custodians. For these market participants,
different markets. Moreover, the high degree of T2S will also kickstart the move toward harmo-
intermediation required for settling transactions nized market practices and adoption of new
is hindering the EU’s goal of a single, harmonized messaging standards.
financial market.
These developments augur well for investors,
The Giovannini report lists 15 barriers to an which are expected to benefit the most from
efficient EU securities market infrastructure. this platform, through reduced costs and opti-
These barriers must be overcome to create a mized spreads that result from more timely
harmonized trading landscape. T2S will play a settlement. The scope for reducing settle-
key role in this regard (see Figure 4, page 5) ment duration will be influenced by the larger
and will lay the technological foundation for reforms of different nations eyeing convergence
overcoming intermediation challenges. around a single settlement cycle of T+2.
T2S aims to enable the following:
Impact of T2S on Market Participants
Reduced cross-border settlement costs T2S aims to create a more efficient and
through a single IT platform, as well as stan- investor-friendly marketplace, and its introduc-
dardized communication protocols for settling tion will have a significant impact on all market
securities in the EU. participants in the EU (see Figure 5, page 6).
cognizant reports 4

5. Settlement Landscape Comparison: EU vs. U.S.
Europe United States
MTFs
LU Euro- NYSE
BME London SWX MTFs (e.g., (e.g., Nasdag
Deutsche Nasdaq S.E. next Borsa
Group Stock Group Chi-X/Turquoise) BATS)
Börse OMX PT, Italiana
DK, EE, BE, Exchange
Trading
LV, LT, FR,
FI, SE, IS NL
Eurex
Clearing LCH LCH NSCC FICC
LCH
Clear- Clear- SIS EMCF Euro-
Clear-
net net x-clear CCP
net
SA SA Ltd.
Clearing
Clear-
stream
Banking Euroclear
Frank-
furt
Clear- . DTCC
V . Inter- Monte
Asset IBER Stream bolsa U SIS CSD
P . Titoli
Servicing Clear Banking K
Luxem- B F F N S &
bourg E I R L E I
E Federal
Reserve
Security
and cash C
B B . B B B B B
settlement u D S D S
BdE C . d N d N O I BdL SNB NCB
B N . P R
L P B f B E r
a e
Note: The shaded boxes indicate groups of companies resulting from mergers and acquisitions
Source: European Central Bank
Figure 3
Presently, the disconnected markets are a
deterrent to risk-averse investors. T2S-enabled Removal of Barriers
settlement cycles are expected to result in lower T2S is expected to help remove the
margin and collateral requirements and mitigate following Giovannini barriers:
systemic risk. This also means that firms need National differences in information
to standardize workflows, adopt new messaging technology and interfaces.
standards and improve data management. National clearing and settlement
restrictions that require the use of
In terms of impacted entities, NCSDs are multiple systems.
impacted the most in terms of adopting new busi- Differences in national rules relating to
ness models and messaging standards, as well corporate actions, beneficial ownership
as the likelihood of decommissioning significant and custody.
parts of their existing settlement systems. Also, Absence of intra-day settlement finality.
one of the major focus areas of T2S is to encour- Practical impediments to remote access to
age competition among NCSDs, providing market national clearing and settlement systems.
participants7 with options to choose their National differences in operating hours/
depository relationship, with settlement occur- settlement deadlines.
ring on T2S. Source: “Giovannini Barriers to be Reduced by T2S,”
European Central Bank.
However, the implications of T2S are not Figure 4
restricted to NCSDs alone; they are likely to
reach a far greater level, leading to a significant Global Custodians
rationalization of the post-trade value chain. T2S presents a mixed bag for custodians. They
This increased competitiveness among key already face complex data delivery demands
market participants,8 enabled by an increasingly from clients. Preparing for T2S could mean added
level playing field delivered by T2S, is expected costs. Various regulations that followed the
to drive cost optimization. financial crisis placed significant pressure on
cognizant reports 5

6. the custody business in terms of compliance and In our opinion, global custodian banks will
transparency requirements. Most custodians possibly look at direct settlement through T2S,
operate in the fragmented European markets consolidating the relationship in a single CSD
through sub-custodians. With T2S, they will (or a selected few) and will look at CSDs/niche
have an opportunity to optimize the number of service providers to fill service gaps in local
intermediaries with which they work. Custodians markets such as income collection and tax
hope that T2S will offer easier and more direct processing. With their traditional revenue
access to various CSDs operating in the European streams becoming commoditized and collateral
markets. management becoming the mainstream of newer
revenues, and here these banks might even look
Global custodians looking to benefit from T2S at establishing CSDs in these markets.
by eliminating intermediaries will need to
develop expertise in-house, which could mean Sub-Custodians
additional investment. T2S will require different T2S will have significant implications for sub-cus-
business models for global custodians to operate in todians. Smaller regional players that normally
European markets, each with its own pros and act as sub-custodians for global custodians will
cons (see Figure 6, page 7). have to rethink their business models and rewire
Impact of T2S on Market Participants
Stakeholder Current Scenario Post-T2S Scenario
Central Securities Handle settlement and Handling of settlements by T2S; handling of depository
Depository (CSD) depository functions. functions only by CSDs.
Gain significant wallet share Significant change in the revenue mix, with a reduced
of revenue from settlement. share of settlement revenue.
The need to expand the service catalog and identify
alternative revenue sources to compensate for the
loss of settlement revenue.
Consolidation, as market participants can choose to
consolidate relationships with select CSDs.
Ability to reap the advantages of T2S by rationalizing
the existing IT infrastructure and re-design of existing
systems.
Global Custodians Provide custody administra- Opportunity to gain the most, as T2S provides options to
tion services to institutional rationalize their settlement value chain.
investors.
The need to make significant investments to achieve
U.S. players operate in the greater benefits (e.g., support for the ISO 20022 messag-
European market via sub- ing standard to achieve direct connectivity to T2S).
custodians.
Opportunity to enter the market directly, without a sub-
custodian, resulting in in-sourcing some of the services
currently provided by sub-custodians.
Sub-Custodians Provide custody administration Loss of revenues, as global custodians can connect
services to domestic clients. directly to T2S (through a CSD).
Also act on behalf of global
custodians that may not have Increased competition, as CSDs in search of alternate
a local presence. revenue sources enter the traditional revenue terrain of
sub-custodians, resulting in increased competition.
Creation of niches by some providers that specialize in
services such as tax services.
Source: efinancialnews.com, Cognizant Business Consulting
Figure 5
cognizant reports 6

7. operations by developing new services, as large as asset optimization, tax-related services and
custodian banks may decide to reduce the num- income collection.
ber of intermediaries with which they operate.
This will require fresh investment in infrastruc- Depositories
ture, which will add to their costs. T2S’s single settlement platform, standardized
communication and reduced cost of cross-CSD
Moreover, not all sub-custodians will be able to settlement will facilitate lower long-term operat-
bear this. Not surprisingly, among sub-custody ing costs. It will further reduce the entry barrier
players there seems to be a negative opinion to players that want to offer cross-border CSD
about T2S. The fragmented nature of European services.
markets has been helpful in some ways for the
domestic custodians. Some find it useful as a test T2S will put pressure on revenues from settle-
bed for taking their business models global.9 ment services, as it will assume the majority of
the Eurozone’s settlement activity. As a result,
With clients having the ability to directly connect CSDs will have to develop new services and pos-
to T2S, their settlement revenues could decrease. sibly tap into the services traditionally offered by
Additionally, there is also the likelihood that local custodians. This will require fresh invest-
CSDs — particularly those that could lose busi- ments. While large depositories might be able to
ness due to T2S’s settlement role — will enter the manage this, smaller ones may find fresh invest-
custody space, whereas custodians cannot offer ment hard to come by. The T2S platform will also
the services of a depository. Therefore, smaller, provide a possible opportunity for large CSDs to
domestic custodians could find it particularly enter new markets and potentially become issuer
hard to avoid the loss of revenue as compared CSDs in these local markets.
with larger players. Competition from interna-
tional players that offer a single entry point for Going forward, CSDs will need to invest in reshap-
all European markets is also likely to intensify. ing their IT infrastructure to reap the full benefits
of T2S. Owing to increased competition, they will
As a result, it is possible that local custodians will likely need to scale up their services. Some areas
consolidate and transform, although not in the they will need to revisit include speeding up data
near term, into regional specialists that serve feeds, creating a seamless information flow of
foreign participants in multiple European mar- securities and adopting ISO formats in a more
kets. Further, as the settlement business declines, efficient communications structure.
these entities may start transforming their busi-
ness models to operate more like a utility that One element of concern to NCSDs is T2S’s
provides a bouquet of services to custodians such limitations with respect to settlement services.
Global Custodian Engagement Model Alternatives in the Post-T2S Arena
Scenario A Scenario B Scenario C
Direct connection to T2S through Direct connection to T2S through an Remain with the present
an account at NCSD. account at NCSD (without a local agent). model and operate through
a sub-custodian.
This could be a practical scenario Apart from direct clearing, the custo- There are no benefits or
in the short to mid-term. Here, dian becomes a direct participant of T2S implications of T2S. Trades are
the custodian chooses a direct through its account with NCSDs and initi- settled with the sub-custodian
clearing participant of a selected ates and manages settlement instructions in the CoBM model.
NCSD. The accounting relationship directly with T2S. The custodian will have to
is maintained with the NCSD; there in-source local market services. It is impor-
is an opportunity to consolidate tant to balance the in-sourcing decision
NCSD relations, while a local agent against the advantages of direct clearing/
is appointed for services such as connectivity. Done correctly, this could be
income collection and registration. an efficient long-term option.
Source: Cognizant Business Consulting
Figure 6
cognizant reports 7

8. NCSDs continue to own all relationships and Standardizing or automating workflows to
custody services for the participants. This is increase straight-through processing rates
quite different from the U.S. model, where the and avoid error-prone manual intervention.
DTCC provides a complete set of settlement, As a result, cross-border volumes are expected
custody and asset servicing. Also, domestic to increase several-fold, making the securities
settlement costs in Europe are on par with the trading business increasingly attractive to
U.S. and hence do not merit routing transactions investors.
via T2S. Therefore, NCSDs do not feel compelled Embracing ISO 20022-compliant messaging
to decommission their existing settlement infra- standards that would also support existing ISO
structure for domestic trades. 15022 messaging in a transparent and low-
cost manner to keep operating expenses at a
manageable level.
Winning in the T2S Era Centralizing data management systems to
The T2S platform is meant to help investors by improve process efficiency and reporting.
reducing cross-border settlement costs and risk.
For market players, however, it is a harbinger of While much remains in limbo regarding winning
significant change. By making it easier for inter- player and business models, it is clear that inves-
national players to operate in the EU markets, tors stand to benefit, as T2S is bound to introduce
T2S could spur consolidation in the depository increased competition for their assets.
and custody spaces. The dramatic changes being
brought about in Europe through regulatory- and
market-led initiatives are directed at achiev- Harmonization is the Way Forward
ing the core purpose of the EU (i.e., facilitating Uncertainties regarding the timelines for
a single economic market) and bringing implementation of the T2S platform have led
transparency and competition to the securities to concerns about whether it will ever take off.
market. The T2S platform furthers this cause The ongoing global financial crisis has added
and, hence, should be given higher priority by to the delays. Concerns over turbulent EU
European market players. economies have trumped the harmonization
efforts. The decision by the Bank of England and
Greater harmonization, driven by technology, the Swiss National Bank to not participate in
bodes well for investors, as they would be able the initial migration waves has not helped
to significantly optimize their operations and matters. These issues have added to the anxi-
technology platforms in a consolidating mar- ety of market players, such as global custodians,
ket space. For market players, this also means that expect T2S to help reduce costs.
that they need to invest in renovating and align-
ing their systems and adopting new evolving The initiative has gained traction among market
business models that allow them to more effec- players that recognize the long-term benefits of
tively leverage the benefits enabled by these harmonization, not just in the settlements area
regulatory- and market-led initiatives. but also across the trading lifecycle. Thirty out
of the aforementioned 41 CSDs in Europe have
Firms will also have to look at moving toward already agreed to join the T2S platform.
the ISO 20022 messaging standard. This stan-
dard supports a broad range of processes and For T2S to achieve its business case and recover
provides improved data quality and integration. costs within the stipulated time, it is important
A move to this standard is also necessitated by that the platform garner significant settlement
corporate actions notifications, since the volumes in the early phases of migration. Any
ISO 15022 standard was insufficient in handling delay in Eurozone NCSDs joining T2S, or some of
issues such as complexities surrounding corpo- the larger “foreign” markets such as the UK, may
rate reorganizations. potentially jeopardize the T2S business case/
economic model.
While forcing players to reinvent their core value
proposition, T2S will require important techno- Continued efforts by the ECB and the EU are key
logical changes. Key technology imperatives for to achieving this harmonization. Settlement will
industry players include: only be truly accelerated when all the processes
cognizant reports 8

9. leading to it are also improved. But there are chal- The harmonization of the European financial
lenges that go beyond the realm of technology. market is a long-term effort, and much has been
For true pan-EU harmonization to be achieved, achieved over the past few years through legis-
it is important that individual member nations lation such as MiFiD. Complete harmonization
also cooperate in aligning their local markets to will not come easily. In the post-trade process,
remove any regional challenges that might hinder including corporate actions and tax processing,
overall harmonization. Winning the commitment further harmonization is needed, in areas such as
of member states to go the distance, therefore, securities and tax laws.
is a task that needs to be achieved, and quickly,
for the platform to meet its already extended T2S is an important step in fixing Europe’s frag-
timelines. mented settlement system. It addresses six of the
15 barriers listed by the Giovannini report and is
Moreover, T2S’s role goes beyond providing expected to act as a catalyst for pan-European
a common settlement platform. T2S is seen as harmonization. At a time of economic turmoil,
a key enabler for the move toward a pan- T2S could provide much-needed financial stabil-
European harmonized T+2 settlement cycle, ity in the securities trading market by reducing
which is a long-term goal adopted by the the risks and costs associated with cross-border
European Commission.10 transactions.
Footnotes
1
The Giovannini Group produced two reports, in 2001 and 2003, on the main barriers related to
the fragmentation of the European trading, clearing and settlement markets and the resulting
inefficiencies.
2
“Banking Heads 'Hugely Disappointed' By T2S Delay,” Finextra, Sept. 21, 2011.
3
CeBM, or Central Bank Money, is the liquidity of the participant or its designated settlement bank,
with the respective National Central Bank directly debited/credited over the respective Real Time
Gross Settlement System (RTGS). Note that even with CeBM, multiple models to reserve and
operate the liquidity are possible. As compared with CeBM, settlement outside of NCSDs —
say between the agent bank and its customers — takes place in commercial bank money (CoBM).
4
NCB: National Central Bank.
5
NCSD: National Central Securities Depository, e.g., Euroclear France for the French market,
Clearstream Frankfurt for the German market or SIS for the Swiss market. Note that due to an
earlier initiative to harmonize and consolidate the national securities infrastructure, most of the
Eurozone countries already have a single NCSD.
6
“Settling Without Borders,” European Central Bank, November 2011.
7
In this context, the term “market participant” is used to refer to any global custodian (typically DECU/
RECU in ISO 15022 vocabulary), broker-dealer or agent bank that operates in multiple markets and
acts on behalf of the investor to settle a trade. In terms of the settlement chain, this is the entity
closest to the investor. Such global players are likely to both be impacted by the changes that the
move to T2S will require and expected to get maximum benefit from this new pan-European clearing
platform.
Specific reference is made to local agents in the respective national markets that provide settlement
and custody services in respective markets. The terms local custodian, regional custodian, local agent
and sub-custodian are used interchangeably, depending on the context.
In the current business model for cross-border settlement, such agent banks (DEAG/REAG in ISO
15022 vocabulary) are normally always deployed (required) and are closest to the place of settlement
(PSET in ISO 15022 vocabulary).
cognizant reports 9

10. 8
Typically, NCSDs and NCBs are the key market infrastructure providers, along with the agents
(securities) and settlement banks (money) at the next level.
9
“Post-Trade Infrastructures: Defragging the Future,” Banking Technology, Oct. 21, 2011.
10
Jeremy Grant, “Brussels Looks to Cut Settlement Times,” Financial Times, Oct. 24, 2010.
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Pierre Francotte, “Competition and Challenges Ahead,” Financial Times, Feb. 1, 2009.
Sanjay Bhanot, “Post Trade Infrastructure Harmonization in Europe,” Cognizant Reflections Journal of
Banking & Financial Services, 2008.
cognizant reports 10

11. Credits
Author and Analyst
Akhil Tandulwadikar, Cognizant Research Center
Subject Matter Experts
Sathyanarayanan Palaniappan, Senior Manager, Cognizant Business Consulting, Banking and Financial
Services Practice
Rajagopal Sethuraman, Manager, Cognizant Business Consulting Banking and Financial Services
Practice
Sanjay Bhanot, Assistant Vice President, Cognizant Business Consulting, Banking and Financial
Services Practice
Design
Harleen Bhatia, Design Team Lead
Suresh Sambandhan, Designer
About Cognizant
Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-
sourcing services. Cognizant’s single-minded passion is to dedicate our global technology and innovation know-how,
our industry expertise and worldwide resources to working together with clients to make their businesses stronger.
With over 50 global delivery centers and more than 130,000 employees as of September 30, 2011, we combine a unique
global delivery model infused with a distinct culture of customer satisfaction. A member of the NASDAQ-100 Index and
S&P 500 Index, Cognizant is a Forbes Global 2000 company and a member of the Fortune 1000 and is ranked among
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