TARGET2-Securities (T2S), the project to build a single settlement engine for all European securities transactions, has been given the green light by the European Central Bank.
The ECB’s governing council has committed to providing the resources required until the completion and launch of T2S. It also assigned the development and operation of T2S to the Deutsche Bundesbank, the Banco de España, the Banque de France and the Banca d’Italia.
The ECB’s decision follows feedback from Europe’s central securities depositories (CSDs), which currently provide securities settlement services on a largely domestic basis. On 23 May 2008, the ECB’s governing council invited all Europe’s CSDs to join the T2S initiative in a proposal that included an outline of the economic benefits, a legal assessment, the T2S user requirements, a description of the governance for the specification phase and details of the harmonisation efforts to be undertaken in the context of T2S.
According to the ECB, “almost all euro area CSDs” are in favour of the continuation of the T2S initiative and are prepared to enter into a legally binding contractual arrangement by the end of the first quarter of 2009.