Italy introduces TARGET2-Securities for securities settlement
Since 31 August 2015, the Italian central securities depository, Monte Titoli, has been settling its securities transactions via the TARGET2-Securities (T2S) platform, making Italy the largest market so far using the Eurosystem's new European securities settlement platform. Prior to the launch of the platform in Italy, T2S had started operations on 22 June 2015 with the central securities depositories of Malta, Greece, Romania and Switzerland.
In addition to the central securities depositories, nine central banks – including the Deutsche Bundesbank – have also opened cash accounts for their customers in T2S. Opening T2S cash accounts at an early stage lets banks take advantage of the benefits provided by T2S from the very outset, meaning that they can pool their liquidity in just a single cash account and run down the liquidity buffers they hold in different markets.
Following the operational launch by Monte Titoli, Bundesbank customers can now also make use of the T2S auto-collateralisation feature within the framework of an interim solution, which constitutes a key service in the optimisation of liquidity management. T2S auto-collateralisation facilitates the settlement of securities transactions – through the automatic provision of intraday credit – which would otherwise have failed owing to a lack of liquidity. During the interim solution period, only securities submitted via links of Monte Titoli are eligible for T2S auto-collateralisation. Once the German central securities depository, Clearstream Banking Frankfurt AG, goes live on the T2S platform during the third migration wave in September 2016, all securities that have thus far been admissible for the German auto-collateralisation facility will also be accepted in T2S.
The next major milestone will be the start of the customer testing phase for the second migration wave on 19 October 2015 and the subsequent operational launch on 28 March 2016.