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TARGET2 - Securities

T2S (TARGET2-Securities) is a Eurosystem project to provide central securities depositories (CSDs) with a single technical platform for the delivery-versus-payment settlement of securities in central bank money.

The project was launched on 17 July 2008 by the Governing Council of the European Central Bank. T2S was officially implemented in June 2015, following an initial testing phase that was conducted with participating CSDs.

Responsibility for managing T2S falls to the Market Infrastructure Board, which is appointed by the ECB Governing Council.

The development and operational management of the platform have been entrusted to a group of four Eurosystem central banks, the 4CB (Deutsche Bundesbank, Banco de España, Banque de France and Banca d’Italia). 


Operating environment

Operating environment

T2S allows all delivery-versus-payment to be carried out in real-time, even for securities transactions settled across national borders. This is because it has been developed as a so-called “integrated model”, where securities accounts held by CSDs and dedicated cash accounts (DCA) opened on the books of national central banks are all managed directly within the same T2S platform.

Cash is transferred daily to the dedicated cash accounts from the RTGS accounts (Target2 for the euro) and, at the end of the day, any liquidity left in the DCAs is transferred back to the RTGS. There are also a number of optimisation mechanisms in place to increase the amount of available liquidity and enhance settlement efficiency.

One of these is the auto-collateralisation function which is triggered automatically when a buyer has insufficient funds in its account to settle a securities transaction. The funds are provided by the central bank in the form of an intraday loan, secured either by the securities being purchased (auto-collateralisation on flow), or by other securities already held by the buyer (auto-collateralisation on stock).

The delivery-versus-payment instructions are validated and can be matched on the Target2-Securities platform. The securities are then paid for and transferred, provided there are sufficient funds in the buyer’s account and the securities are available.

T2S will also carry out real-time readjustments for cross-border delivery-versus-payment, to ensure that the accounts of the issuing and purchasing CDSs are consistent.

Further information on the T2S project can be found on the ECB website

Updated on: 06/12/2018 10:33