TARGET2-Securities

General information

On 6 July 2006, the Governing Council of the ECB decided to evaluate, together with central securities depositories and other market participants, opportunities to provide efficient settlement services for securities transactions in central bank money. The service, called TARGET2-Securities (T2S), will be designed to provide a single platform for settling both cash and securities transactions. Settling national and cross-border securities transactions in central bank money more efficiently can improve the integration of European money and capital markets. TARGET2-Securities is solely a settlement service for all types of securities. Custody and its associated services remain in the hands of central securities depositories.

Having taken economic, legal, operational and technical aspects in conjunction with the use of the common platform designed for TARGET2 into consideration, the Governing Council of the ECB confirmed the fundamental feasibility of the project at its meeting on 8 March 2007. The Deutsche Bundesbank, Banque de France and Banca d'Italia (3CB), which are already responsible for the development and operation of TARGET2, are willing to develop and operate the new service together with Banco de España (3CBplus) on behalf of the Eurosystem using the single shared platform. By operating TARGET2 and TARGET2-Securities in tandem, synergy effects are produced which allow considerable savings to be made and at the same time enable banks to improve their liquidity and information management.

In the meantime, intensive collaboration between all of the system’s potential users, central securities depositories and national central banks has resulted in the compilation of a comprehensive document listing the TARGET2-Securities user requirements. In order to take as much account of the requirements of market participants as possible, on 18 December 2007 the Governing Council of the ECB took the step of making the TARGET2-Securities user requirements available for public consultation for a period of three months. At the same time the market was consulted in connection with the methodology used to compile the study of the economic impacts of TARGET2-Securities. All of the opinions received were incorporated into a final set of TARGET2-Securities user requirements and supplementary documents (including details of the final methodology and the findings of the study into the economic impacts).

On 23 May 2008, the Governing Council of the ECB invited the European central securities depositories to join the TARGET2-Securities initiative with the request that they contact the ECB no later than 4 July 2008 to confirm their support of the TARGET2-Securities initiative and verify whether they intended to use the service subsequent to its official launch in 2013.

Based on the positive feedback received from the vast majority of European central securities depositories the Governing Council of the ECB decided on 17 July 2008 to launch the TARGET2-Securities project and to provide all the necessary resources until its final completion. The Governing Council also decided to entrust the 3CBplus with the task of developing and operating TARGET2-Securities. The project can now enter the specification phase (see organisational structure).

Press releases

Publications

For more information, see the website of the European Central Bank or contact the TARGET2-Securities project office of the Deutsche Bundesbank at T2S@bundesbank.de.