TARGET- 2 SECURITIES Estonian National User Group (EENUG)

12 February 2009, 14:00-15:45
at Eesti Pank, Tallinn

Minutes of meeting

Chairperson: Kadri Martin
Secretary: Riina Mäesalu

Agenda

1. Work plan and agenda of the meeting and approval of members
2. Brief of the status of the Target-2 Securities project
3. Estonia's position on participation in T2S project and various future alternatives
4. Any other business

   1. Work plan and agenda of the meeting and approval of members

Approved:

  • Composition of the Estonian National User Group (EENUG) of Target-2 Securities (T2S), which will be made public on the ECB's T2S national user groups webpage (Annex 1)
  •  Attendees of the meeting (Annex 2)

Kadri Martin briefed the participants on EENUG's work plan for 2009 and the upcoming events.

Next steps: Eesti Pank will send the ECB a letter "Creation of the T2S Estonian National User Group" including a confirmation of the Estonian Central Securities Depository's (ECSD) interest in conditionally joining the T2S project. The official composition of EENUG will also be added to the letter.

   2. Brief of the status of the T2S project

Kadri Martin briefed the attendees on the Advisory Group's (AG) meeting on 20/1/2009 and gave an overview of the T2S Info Session held in Brussels on 4/2/2009.

Kadri Martin informed the participants about the work plans for 2009 of AG and its substructures; T2S URD change requests (the deadline for the consultation is 27/2/2009; see Item 4 of the Minutes); organisational issues; governance, and pricing.

The user group was also informed of the meetings between the ECB and CSDs to discuss how to proceed with T2S. The CSDs that will not make binding commitments will probably not be included in the further governance process of the project (see Item 3). The preliminary time for the launch of the T2S platform is July 2013.

   3. Estonia's position on participating in the T2S project and various alternatives for the future

Kadri Martin briefed the attendees on the unofficial discussions held with the ECB experts, who have understood Estonia's position on commitment to the T2S project controversially, i.e. rather as a "no" than a "yes". EENUG decided to clarify Estonia's position to the ECB to assure that the reply of the Estonian Central Securities Depository would be understood identically.

Other issues raised in relation to the subject were as follows:

1) Under what conditions would the ECB consider Estonia as one of the countries willing to join the project?
2) Is the deadline to adopt the euro in Estonia a problem for the ECB? If so, then would the introduction of euro settlements for the securities issued in Estonia help solve this issue? In addition to Denmark, also Lithuania has informed about adding the Lithuanian litas to the T2S currencies. However, adding the Estonian kroon to the T2S currencies only for the sake of participation in T2S is probably not reasonable.

 

Approved: EENUG will wait for ECB's reply to the ECSD's letter on conditional commitment to T2S and form its position based on the ECB's reply

In the meeting the question about the decision making process in T2S project was raised. Kadri Martin explained that the Eurosystem is the ultimate decision-making body. The T2S Advisory Group has only an advisory role in the project and is therefore open to any proposals. Eesti Pank, though a member of the ESCB, does not participate in the decision-making as it is not a member of the Eurosystem.

Another issue raised was pricing. EENUG members were informed about the preliminary pricing principles stated by the ECB (0.10-0.15 EUR per transaction). The initial annual price for participation in T2S for CSDs - 100 000 EUR - was found to be discriminating to small CSDs. Kadri Martin added that the 70:30 principle is planned to be implemented, meaning that 70% of the profit will come from the transaction fees and 30% from fixed and other fees. Martin also recalled the position of the ECOFIN who has stated that T2S pricing principles should not provide competitive advantage to any particular national market or CSD market model. Big markets should not get a competitive advantage over small markets.

Next steps: EENUG will wait for the summary of the pricing workshop held on 12/2/2009. After that EENUG will either have a written consultation about pricing or will include pricing on the agenda of the forthcoming meetings. At present, EENUG considers the ECB's proposals too preliminary to make any concrete decisions.

   4. Any other business

T2S Sub-group on Process Efficiency - market consultation on T2S handling of securities financing instructions and T2S system rules for recycling

Kristel Vanasaun, representative of the ECSD, gave an overview of the system specific change propositions they have made for T2S (for further information see www.ecb.int/paym/t2s/progress/subeffic/html/index.en.html#minicon). ECSD's position is to support raised issues proposed by the T2S Sub-group on Process Efficiency.

Next steps: ECSD will compose a reply concerning the consultation, taking into consideration the feedback from market participants. Proposals related to the issue should be sent to Kersti Kiop (kersti.kiop [at] nasdaqomx.com) by 25 February. If there is no opposition to the positions, ECSD will compose the reply and Eesti Pank will send it to the ECB as the official response of EENUG.

In addition, EENUG decided to emphasise the importance of good composition of documentation of the T2S Sub-group on Process Efficiency at the next T2S AG meeting.

Information session in co-operation with the representatives of the ECB T2S Project Team

It was proposed to have an Info Session for EENUG on 26 February. Members of EENUG are expected to confirm the suitability of the date by e-mail to the EENUG's secretary by 13 February at the latest. The meeting venue will depend on the number of participants. If the event will take place on 26 February, the participants should send theirs application for participation to the secretary by 20 February at the latest.

The questions raised at the first EENUG meeting will be forwarded to Katrin Sagar, the representative of the ECB T2S Project Team. Other proposals are expected by 20 February at the latest.

Questions and discussion subjects raised to be sent to Katrin Sagar for the preparation of the Info Session:

1) Under what conditions would the ECB consider Estonia as a country willing to join the project?
2) Is the deadline of Estonia's joining the euro area a problem for the ECB? If so, would the introduction of euro settlements for the securities issued in Estonia help solve this issue?
3) What is the ECB's position on the ECSD's letter on conditional commitment to T2S?
4) What will be the future governance structure of the T2S? Where would Estonia be placed if the ECSD was to give a binding commitment to join T2S?
5) Which consultations have been held between the ECB and the CSDs so far (with no participation of ECSD) and what have been the results of these consultations?
6) How is Denmark currently involved in the decision-making process of T2S?

 

Nordic-Baltic NUGs meeting in Copenhagen on 3/3/2009

Estonia can nominate 5-6 user group members to the meeting in Copenhagen. If there are more interested members it might be possible to include them too. Eesti Pank proposes to nominate half of the participants from Eesti Pank and the ECSD and another half from commercial banks.

Next steps: EENUG's members should inform EENUG's secretary of their interest in participating as soon as possible but by 20 February at the latest. Proposals for the Nordic-Baltic NUGs meeting topics should be sent to the secretary by 25 February at the atest.

Other issues

EENUG's secretary Riina Mäesalu will be out of office from 16/2/2009 to 22/3/2009. She is replaced by a member from Eesti Pank, Keiu Sopp ((keiu.sopp [at] epbe.ee, phone +372 668 0918). During this period Eesti Pank asks EENUG members to send the e-mails related to EENUG to Keiu Sopp and Kadri Martin (kadri.martin [at] epbe.ee) with cc to Riina Mäesalu (riina.maesalu [at] epbe.ee).


Annex 1
T2S Estonian National User Group (EENUG)

Chairperson Kadri Martin Eesti Pank
Secretary Riina Mäesalu Eesti Pank
User group members   Sirje Kirss AS Eesti Krediidipank
  Viktoria Viira AS SEB Pank
  Kärt Mets AS SEB Pank
  Helle-Reet Kuningas AS SEB Pank
  Julia Segerkrantz Eesti Väärtpaberikeskus
  Andres Lips Eesti Väärtpaberikeskus
  Monika Tooming LHV
  Ruta Tännav AS Hansapank
  Elo Tempel AS Hansapank
  Piret Tamm Marfin Pank Eesti AS
  Katrin Kruustükk Nordea Bank Finland PLC Eesti filiaal
  Helen Kliimask Danske Bank A/S Eesti filiaal
  Merle Peldes Danske Bank A/S Eesti filiaal
  Meelis Mark Eesti Pank
  Viive Sumberg Eesti Pank
Observers Marek Pajussaar Finantsinspektsioon

Annex 2
T2S EENUG 12.02.2009 meeting participants

Chairperson Kadri Martin Eesti Pank
Secretary Riina Mäesalu Eesti Pank
User group members   Sirje Kirss AS Eesti Krediidipank
  Viktoria Viira AS SEB Pank
  Helle-Reet Kuningas AS SEB Pank
  Andres Lips Eesti Väärtpaberikeskus
  Kristel Vanasaun Eesti Väärtpaberikeskus
  Kersti Kiop Eesti Väärtpaberikeskus
  Eduard Meos Eesti Väärtpaberikeskus
  Monika Tooming LHV
  Ruta Tännav AS Hansapank
  Natalja Zubritskaja AS Hansapank
  Piret Tamm Marfin Pank Eesti AS
  Katrin Kruustükk Nordea Bank Finland PLC Eesti filiaal
  Helen Kliimask Danske Bank A/S Eesti filiaal
  Merle Peldes Danske Bank A/S Eesti filiaal
  Keiu Sopp Eesti Pank
  Meelis Mark Eesti Pank
  Viive Sumberg Eesti Pank
Observers Marek Pajussaar Finantsinspektsioon