TARGET2 -Securities ( T2S) is a platform for the settlement of securities in the EU.

  • 6.1 Record Round by May 2, 2012
  • 6.2 Recording round by July 3, 2012
  • 7.1 Technical Project Status
  • 7.2 Senior scientific project status
  • 8.1 Effects - custody business
  • 8.2 Effects - CSDs


In the European securities market and specifically the securities settlement, a system for the settlement and the remote safekeeping of securities has established that by the CSD - worn as Clearstream, Euro Clear, OeKB, Monte Titoli and banks (Global) Custodians - CSDs, Central Securities Depository will. As a result of different national legal conditions, market practices and system platforms a decentralized approach in the securities settlement has taken place. This allows an efficient processing at the national level; the cross-border securities settlement, however, is less efficient and more costly. With the introduction of TARGET2 -Securities ( T2S) project coordinated by the European Central Bank ( ECB), European banks are to receive a single technical platform for an EU single market in the securities settlement.


The T2S project was launched by the ECB in 2006. The history reaching back to the year 2001, which drew in giovaninni report points were identified that hinder intra-European securities settlement sustainable. In other reports of Giovanni Commission in 2003, the problems of a harmonized and free securities settlement in Europe were deepened and summarized in the 15 Giovannini barriers.

The TARGET2 system as a model

For cross -border European payments between banks and central banks in the EU was created by the central banks of the EU in order to achieve a significant simplification of cross-border payments and the reduction of costs associated with TARGET2 a functioning system. The development and operation of TARGET2 takes place in an international cooperation of the participating central banks of Germany, France and Italy. This approach is also applied for the European securities settlement with T2S. Development and operation of T2S are again guaranteed by a European co-operation of central banks of Germany, France, Italy and Spain ( Banco d' Espana ).

Objectives of the T2S project

The European securities settlement to T2S with a technical platform

  • Harmonized and simplified,
  • Increased efficiency,
  • Reducing the current high cost of cross -border traffic

Be. As a further component of the consistent use of central bank money for securities settlement is considered. Investors, it will be easier to diversify their portfolio through cross-border investments within the EU, which now partially fails because of the cost of cross -border securities trading and the barriers to entry.

The T2S system


T2S covers the features of securities settlement - instructing, validation and matching of transactions from up to the actual settlement. These are previously mapped differently in the settlement systems of the CSDs. T2S allows a DvP settlement ( delivery versus payment ) for all transactions that have a security with an ISIN ( International Securities Identification Number) to the object. But even free of payment transactions are mapped. This means that only securities are regulated via T2S - ie a transfer from bank to bank. Payments may be made, for example, via TARGET2. About T2S both exchange and OTC transactions (OTC - Over the Counter ) are mapped in Germany and other European countries. Even with T2S remains the safekeeping of securities holdings and their management in the sovereignty of the CSDs and is to be mapped in the local systems. The CSDs need to be the holdings of their customers - the banks - as a depot A and B including required sub- depots pictures ( eg collateral). For imaging of the scheduling process in the securities settlement securities holdings are mirrored by the CSDs in T2S. The mapping of the corporate actions remains with the CSDs. This ensures that resulting changes in inventories can be traced also in the in T2S " mirrored " stocks.

To facilitate the consistent use of central bank money for the DvP settlement in T2S, a connection between T2S and the run in TARGET2 RTGS accounts (Real Time Gross Settlement ) of the banks created. T2S performs the management at the CSDs holdings of securities and cash deposits with central banks directly together. This mechanism is in addition to a netting function increase settlement efficiency sustainable. T2S facilitates the use of the credit Facility at the central banks as cash accounts and securities holdings are in a system visible and detected by simple transfer collateral and thus overdraft lines can be used.

Connection and use of T2S

The primary users of T2S will be the European CSDs and central banks. The use of T2S is not linked to the EURO, but is the CSDs in all EU countries open. Not all EU countries participate - As things stand, are - as with TARGET2. The integration of the countries that will participate in T2S, to take place in three waves in 2016.

Direct contractor of T2S are the central banks and CSDs. Banks bind to on the CSDs. For the " technical " Connecting the banks are two paths open: You can indirectly as " ICP - Indirect Connected Participant " link and access to T2S via the settlement system of the CSDs or after consultation with their CSD additional technical direct connection as DCP - Direct Connected Participant - make to adjust instructions directly to T2S.

The use of T2S is done by the devices connected either via a web-based GUI or message-based interfaces based on ISO20022.

Participants of the T2S system

Admission round by May 2, 2012

  • Bank of Greece Securities Settlement System - BOGS (Greece )
  • Clearstream Banking AG ( Germany )
  • Depozitarul Central ( Romania)
  • Iberclear (Spain )
  • LuxCSD S. A. ( Luxembourg )
  • Monte Titoli SpA (Italy )
  • VP LUX S.à.r.l. ( Luxembourg )
  • VP Securities A / S ( Denmark)

Admission round by July 3, 2012

  • AS Eesti Väärtpaberikeskus (Estonia)
  • Central Depository AD ( Bulgaria)
  • Centralny depozitár cenných papierov SR, as (Slovakia )
  • Cyprus Stock Exchange
  • Euro Clear Belgium
  • Euro Clear Finland Oy
  • Euro Euroclear France
  • Euro Clear Nederland
  • Interbolsa - Sociedade Gestora de Sistemas de Liquidação e de Sistemas de Valores Mobiliários Centralizados, SA (Portugal )
  • KDD - Centralna klirinško depotna družba, dd (Slovenia )
  • Központi Elszámolóház és Értéktár Zrt. - KELER (Hungary )
  • Lietuvos Centrinis vertybinių popierių depozitoriumas (Lithuania )
  • Malta Stock Exchange
  • Austrian Control Bank Aktiengesellschaft ( Austria )
  • SIX SIS Ltd. (Switzerland)

The project status

At the project level is too different ( development of participation in T2S system ) between the technical status of the project in terms of the development of the T2S system itself and the professional status of the project.

Technical project status

Currently, the T2S project is in the technical implementation, after an extensive technical and functional design has been created. The development will be completed by the end of 2013, to enable subsequent tests of the CSDs to connect their systems.

Professional status of the project

Currently, the first CSDs have documented their participation in T2S system by signing the legal framework. The signing ceremony took place on May 8, 2012 in Frankfurt am Main, after the expiry of the first deadline on 30 April 2012, a series of CSDs declared their participation.

Impact of the T2S system to the banking landscape

Effects - custody business

T2S affects for banks offering custody services for markets that bind to T2S. The now existing in cross -border business need for the integration of a custodian goes through T2S lost as a direct connection between the CSDs is created via T2S, which could take on this role.

Effects - CSDs

The CSDs have their settlement systems review and adjust for changes by T2S. The CSDs will also check its current services in the securities settlement and change if necessary.