TARGET2-Securities (T2S) is a single pan-European platform, owned by the Eurosystem, which facilitates the centralised securities settlement in central bank money in euro or other currencies. By grouping securities accounts and cash accounts on the same platform, T2S offers an integrated settlement service that is neutral, borderless and with state-of-the-art functions.

T2S is aimed at central securities depositories (CSDs), to which it a common technical solution for settling securities transactions. The CSDs maintain business relations and contracts with participants and continue providing custody and maintenance services for securities (such as managing corporate rights), as well as other added-value services.

The objective of T2S is the harmonization and integration of the securities settlement infrastructures in Europe, allowing to put in a par the crossborder securities settlement in Europe with the domestic in efficiency and cost terms. In addition, T2S complements and facilitates other European initiatives in the securities sector. It involves a fundamental progress for the building of an unique market for financial systems in the EU and, hence, for the achievement of a "capital markets union"

The ECB Governing Council decided to launch the T2S project in 2008 after several consultations to the market, assigning the development and management to Bundesbank, Banco de España, Banque de France and Banca d’Italia, which are named 4CB.

T2S started to work in June 2015 and the migration was carried out in five different windows. Iberclear, the Spanish CSD, migrated to the platform in the last window in September 2017. In October 2017, 21 CSD were participating in T2S.

The two main documents that constitute the T2S contractual framework of T2S are the Framework Agreement for the CSD establishing their contractual rights and obligations with the Eurosystem and the Currency Participation Agreement that governs the relationship between the Eurosystem and non-euro area central banks that wish to make their currency available in T2S. Nowadays, only the central bank of Denmark has signed this agreement and it is foreseen the migration of the Danish Krone to T2S in 2018.

Regarding the financial aspects, T2S works under the cost recovery principle.

The harmonization of the postrading is a fundamental objective of T2S. It facilitates the financial integration process in the EU, contributing to the efficiency improvement and the level playing field in the securities markets. T2S harmonizes technical and operational issues in the settlement services leading the way to the creation of a single market in Europe, in line with the regulatory changes that are being developing and implementing currently.

Governance structure

The T2S platform belongs to the Eurosystem, and therefore the decision-making responsibility for the platform falls to the Governing Council of the European Central Bank, in close collaboration with all market players.
The governance structure has evolved according to needs, seeking the greatest possible involvement of the market's players, and always under the principle of maximum transparency, an aspect that has been highly valued by the industry and authorities.

The main bodies involved in T2S governance are:

  • The Market Infrastructure Board (MIB), responsible for the day-to-day management of TARGET2 and T2S, and for the management of all Eurosystem projects in the areas of market infrastructure and payments.
  • The CSD Steering Group (CSG), responsible for coordinating the positions and requirements of the CSDs participating in T2S. In particular, it advises and makes decisions in areas relating to the Framework Agreement and its development plans, in areas of special interest (prices, risks, etc.), and on prioritising requested changes
  • Advisory group on market infrastructures for securities and collateral (AMI-SeCo). It advises on issues relating to the clearing and settlement of securities and collateral management, as well as T2S. This body facilitates efficient interaction between the Eurosystem and financial market players on issues of common interest. It is made up of representatives of securities market participants and T2S users, CSDs, central counterparties and central banks.
  • In each national market, it has been set up domestic groups (AMI-SeCo National Stakeholders Groups -AMI-SeCo NSG) that act as a link with the AMI-SeCo (see more details in the dedicated web section of AMI-SeCo Spain).

Furthermore, the ECB holds informative sessions (Focus sessions) to keep all interested stakeholders updated on the progress made in T2S and topics of broader interest for market infrastructure and to obtain their feedback on current proposals.