The European Central Bank (ECB) has resolved an outage with its pan-European settlement system T2S, which caused commotion across the securities services industry throughout Thursday. 
The T2S operated said the incident had been caused due to a hardware component.
The ECB closed communication channels with network service providers at 10:06 but reopened them at 18:20 CET.
As a result, the delivery-versus-payment cut-off has been postponed by six hours from 16:00 to 22:00. In addition, the T2S penalty mechanism processing has been skipped and rescheduled for tomorrow’s business day.
Clearstream told Global Custodian it had “immediately established an incident management team” in response to the outage. The ICSD added: “We are in close exchange with the relevant experts at the ECB to closely monitor and manage the situation. Our focus is on minimising any potential impact on our customers.”
Euroclear declined to comment, however a source familiar with situation said certain Euroclear clients may have observed delays in the processing of their transactions as outgoing messages and incoming messages were impacted.
Euroclear are said to be keeping impacted clients informed of any developments.
Reuters first reported the incident on Thursday morning CET, noting that the ECB had taken down some interfaces of its settlement system.
In an operational status update seen by Global Custodian at 18.00 CET, the ECB stated: “T2S is currently facing an incident impacting Application-to-Application (A2A) outbound and inbound communication. Consequently, the T2S operator has closed the communication channels with the Network Service Providers at 10:06.
“T2S Actors may have received rejections at Network Service Provider level of messages that were sent to T2S until the closure of channels took place. All new messages after the closure of the Network Service Provider channels are being queued on Network Service Provider level. Once the incident is resolved participants will be advised to resend any messages for which rejections have been received.”
The incident has also impacted T2 for settling payments and TIPS (for settling instant payments).
The ECB has added that the Reimbursement of Auto-collateralisation instructions (event RMIC) and the Optional Cash Sweep (event OCSW) have also been delayed and will take place 15 minutes after the closure of the delivery-versus-payment cut-off. The second optional cash sweep (event OCS2) to T2 will be delayed to 22:45 CET.
The start of the DKK delivery versus payment cut-off has been postponed by six hours (from 16:00 to 22:00 CET). Consequently, the Reimbursement of Auto-collateralisation instructions (RMIC) will occur at 22:10, Optional Cash Sweep (OCSW) at 22:15 and Mandatory cash sweep (GOLT) to KRONOS2 at 22:20.
Free-of-Payment cut-off (IFOP) will take place at 23:00, the Business Date change will occur at 23:45 and the Night-Time Settlement will start at 01:00 (D+1).