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ECB launches pan-EU securities settlement platform

An IT platform that will automate securities settlements across Europe has gone live. The European Central Bank (ECB)-backed project will process transactions between 21 European countries by February the ECB said. 22 Jun 2015

Target2-Securities (T2S) is designed to enable integrated securities settlement across Europe and aims to cut the cost of cross-border payments for securities by connecting settlement houses with the European Central Bank. Its launch is part of progress towards European financial integration, the ECB said.

European central securities depositories (CSDs), which are responsible for the settlement of securities transactions in the countries where they are located, will move their securities accounts to T2S for settlement.

Four securities depositories and their users are now connected to T2S: the Bank of Greece’s depository for government bonds (BOGS); the depository of the Malta Stock Exchange; Romania’s Depozitarul Central; and SIX-SIS of Switzerland.

Italy was due to have joined this initial group, but has now delayed its migration until 31 August because of "technical difficulties", Reuters said.

The full group of 21 European countries will have migrated by February 2017, the ECB said.

"This is a tangible step forward for financial integration in Europe," said Yves Mersch, ECB board member. "After seven years of hard work to make this happen, T2S will benefit people in 21 countries and will support the creation of a true single capital market in Europe."

The T2S platform was developed and is operated by the Deutsche Bundesbank, the Banco de España, the Banque de France and the Banca d’Italia on behalf of the Eurosystem, the ECB said.

T2S will process transactions in euros and, as of 2018, in Danish kroner, as agreed with the Danish national central bank. Further currencies and markets may join in the future, the ECB said.

The ECB has paid increasing attention to international payment systems. Last year it identified four systems as being so important that they should be regulated as systematically important payment systems (Sips). These were: Target2, operated by the Eurosystem (the monetary authority of the eurozone), Euro1 and Step2-T, both run by EBA Clearing, and Core(Fr), operated by Stet, which is a joint initiative of six major French banks.

In identifying Sips, the ECB said it looked at the value of payments settled, market share, cross-border relevance and provision of services to other infrastructures.