BNY, one of the world’s largest custody banks, said in a December 16 statement that it has moved its clients’ assets to direct accounts held with Monte Titoli.
The move means that BNY Mellon will settle transactions in listed securities, such as equities and fixed income, with the Italian settlement platform, putting an end to the previous practice of using sub-custodian banks to settle transactions.
Monte Titoli was in the first wave of settlement houses to join T2S, or Target2-Securities, a single platform for securities settlement, run by the European Central Bank. It uses central bank money for settlement, rather than commercial bank money.
T2S aims to unify securities settlement in Europe and has been fully operational since the end of August 2015.
Tom Casteleyn, head of product management for custody, cash and foreign exchange at BNY Mellon, told FN that T2S “fundamentally changes” the way people do custody in Europe.
“We can go direct to the market infrastructure, we give our clients increased asset safety to know that their accounts are not held with another commercial bank but with a central securities depository in that country,” Casteleyn said.
Mauro Dognini, chief executive of Monte Titoli, said in a statement: “BNY Mellon and its clients will be able to fully benefit from the implementation of T2S using Monte Titoli for the provision of settlement, asset and fiscal services, which will help improve operational efficiency and reduce risk.”