TARGET2-Securities

TARGET2-Securities (T2S) is the Eurosystem’s securities settlement platform. T2S is designed for central securities depositories (CSDs), enabling them to offer delivery-versus-payment (DVP) settlement services to their clients using accounts held at central banks. T2S provides the settlement infrastructure, while the depositories manage client relationships and offer additional services such as securities registration, custody, and issuance support. Both securities accounts and cash accounts are maintained on a single technical platform in T2S, allowing for simultaneous settlement of securities and cash.

T2S harmonizes securities trading and settlement across the euro area and enables investors to access simple, cost-effective, and secure cross-border securities settlements. CSDs participating in T2S are required to make the securities registered with them available to all other CSDs connected to the T2S platform. As a result, investors have access to a broader range of securities than before.

T2S became operational in June 2015. The Nasdaq CSD, formed through the merger of the three Baltic central securities depositories, joined T2S in September 2017.

In addition to the euro, other currencies can also be added to the list of settlement currencies in T2S. For example, the Danish krone joined T2S in 2018.

You can read more about T2S on the European Central Bank’s website (in English).

T2S Settlement in Central Bank Money

In T2S, the cash leg of securities transactions is settled using accounts held at central banks. The Bank of Estonia is responsible for providing settlement services for the cash leg of T2S transactions and offering the necessary technical support (e.g. setting limits) to market participants connected to T2S. For this purpose, the Bank of Estonia has opened cash accounts both for account holders and for itself.

T2S also supports liquidity management, allowing the configuration of standing orders for cash transfers between TARGET services accounts, and enabling the use of intraday credit, i.e. the automatic collateralisation service. This facilitates the financing of securities transactions using eligible securities already held or being acquired within the Eurosystem.