Target-2 Securities Estonian National User Group (EENUG)

10 June 2009, from 14.00-16.00
Eesti Pank, Tallinn

Minutes of meeting

Chairperson: Kadri Martin
Secretary: Keiu Sopp

Agenda of the meeting

1. Events held. Meeting of the Estonian Central Register of Securities and Eesti Pank (14 April 2009), T2S Team event in Frankfurt (16 April 2009) and the EENUG brainstorm (17 April 2009)
2. T2S Advisory Group meeting, held in Frankfurt on 15-16 June 2009. Overview of the last T2S Advisory Group meeting and info session. Agenda of the meeting of 15-16 June 2009 and discussion of the most important subjects for Estonia.
3. T2S Memorandum of Understanding between the Eurosystem and CSDs: overview of the Memorandum of Understanding to be signed by the Estonian Central Register of Securities with the Eurosystem, and the official confirmation of the support of Eesti Pank and market participants to the signing of the Memorandum of Understanding by the Estonian Central Register of Securities.
4. Consulting of the Process Efficiency Sub-group and the Corporate Actions Sub-group: Comments of the market participants and specification of the further activities required for submission of the response to the consulting.
5. Other topics
6. Annual plan

   1. Events held. Meeting of the Estonian Central Register of Securities and Eesti Pank (14 April 2009), T2S Team event in Frankfurt (16 April 2009) and the EENUG brainstorm (17 April 2009)

Kadri Martin and Andres Lips gave an overview of the meeting of the Estonian Central Register of Securities (ECSD) and Eesti Pank, held on 14 April 2009, and the T2S Team meeting, held in Frankfurt on 16 April 2009.

The main objectives of the ECSD and Eesti Pank meeting:

-   Discussion of the pros and cons of joining the T2S project;
-   Specification of the position of the Estonian market, considering the offered pricing policy and the potential account structure.

 

Considering that the euro has been the Tallinn Stock Exchange trade currency since the year 2002, that commercial banks have been members of the TARGET2-Estonia ever since the establishment of the system, that the ECSD is about the joint the system, and that two-thirds of off-exchange transactions are conducted in euros, the parties reached an agreement that, if the offered conditions are acceptable, the ECSD will join the T2S platform only for settlements in euros.

The objective of the event held with the ECB T2S Team was to clarify the positions of CSDs and NCBs in those countries where the CSD has expressed willingness to join the T2S platform upon adoption of the euro in the particular country. The representatives of Estonia, Latvia, Hungary, Romania and Bulgaria were invited to participate. The representatives of the CSDs and NCBs of Estonia and Romania, and the NCB of Hungary participated. Unofficially, the ECB has acknowledged Estonia's status as a special case, and is willing to accept that the ECSD will only focus on euro settlements upon joining the T2S project, without the Estonian kroon being added to the T2S platform as settlement currency.

Kadri Martin gave a brief overview of the brainstorming session held on 17 April 2009 with the ECRS, Eesti Pank and major market participants. In addition, Riina Mäesalu gave a brief overview of the project-related positive and negative aspects discussed at the session. Kersti Kiop gave an overview of the account management options upon joining the T2S platform, and provided a cost analysis on the basis of preliminary data. As a result of the discussion, the parties unanimously agreed that, even though the project has several loose ends, time is currently the only cost, and that it thus seems reasonable to support the ECSD in the signing of the Memorandum of Understanding with the Eurosystem.

   2. T2S Advisory Group meeting, held in Frankfurt on 15-16 June 2009. Overview of the last T2S Advisory Group meeting and info session. Agenda of the meeting of 15-16 June 2009 and discussion of the most important subjects for Estonia.

Keiu Sopp gave an overview of the T2S Advisory Group meeting of 25 March 2009, and the info session held on 21 April 2009. The main subjects discussed:

  • Establishment of the T2S Programme Board, including the mandate and the composition;
  • Future governance and possible development directions of the T2S project, including the role of the T2S Advisory Group;
  • the status of the development of the pricing principles, and cost policy applied for exceptional procedures.

 

Preparation for the T2S Advisory Group meeting of 15-16 June 2009
The following important agenda items for Estonia were discussed:
3.3. Discussions between CSDs and the Eyrosystem - to determine what the expectations of the ECB are from the ECSD in the near future.
4.1. External T2S governance in the development phase - pursuant to the proposal submitted to the T2S Advisory Group, NCBs of non-euro countries, where the market has conditionally committed to joining the T2S project[1]), would be excluded from the governance structure, with only the CSDs allowed to participate. The Estonian market and Eesti Pank need to know the exact time when Eesti Pank will be involved in the T2S project governance.
4.2. Eligibility of CSDs for T2S
4.4. Pricing - representatives of the ECRS emphasized the importance of the pricing policy in the joining of the T2S platform, considering the account structure managed on the final owner's level.

Eesti Pank recommended that all market participants, who are interested and have the means to do so, participate at the info session to be held on 25 June 2009 in Milan.

Subsequent activities
Kadri Martin and Julia Segerkrantz will participate at the next T2S Advisory Group meeting and will previously consult the EENUG members in writing on any subjects that require a decision and on the subsequent activities, where necessary.

   3. The T2S Memorandum of Understanding (hereinafter the "MoU"). Overview of the MoU to be signed by the ECSD at the end of June. Official confirmation provided within the framework of the EENUG meeting on the support of Eesti Pank and the market participants to the signing of the MoU by the ECSD.

Julia Segerkrantz gave an overview of the MoU scheduled to be signed between the ECSD and the Eurosystem on 30 June 2009, as well as the obligations and rights arising therefrom. The main purpose of the MoU is to lay out a framework for future activity, and map the preparations for the conclusion of the binding agreement in 2010. The ECSD is mainly expecting transparent negotiations and equable agreements between the CSDs and the Eurosystem.

EENUG expressed its support to the ECSD in the signing of the Memorandum of Understanding with the Eurosystem.

Subsequent activities
The ECSD will sign the T2S Memorandum of Understanding with the Eurosystem in the summer of 2009. Under the Memorandum of Understanding, the ECB expects the ECSD to provide a description of the accession to the T2S platform by 30 September 2009. Upon signing of the Memorandum of Understanding, the ECSD will participate in the preparation of binding agreements between the Eurosystem and the CSDs. The binding agreement is scheduled to be signed in the first half of 2010.

   4. Consulting of the Process Efficiency Sub-group and the Corporate Actions Sub-group: Comments of the market participants and specification of the further activities required for submission of the response to the consulting. The comments of all market participants are welcome at the EENUG meeting.

Riina Mäesalu gave an overview of the last consulting session held by the T2S Team, followed by the EENUG discussion. EENUG had no further comments regarding the PESG consulting. Viive Sumberg commented on the CASG consulting, with the wording of the letter of response consequently amended for clarity purposes.

Subsequent activities
Eesti Pank will send the letters of response to the consulting to the ECB on behalf of EENUG.

   5. Other topics

Viive Sumberg gave EENUG members information on the SWIFT plans for change of messages and the related future activities.

   6. Annual plan

The updated annual plan and future events were reviewed.

[1] T2S platform will only be joined with respect to euro settlements, with the local currency - i.e. the Estonian kroon - not included among the settlement currencies.