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Article (80/235)
Target2-Securities (T2S) - regulation memo
Target2-Securities (T2S) - regulation memo

Target2-Securities (T2S) - regulation memo


Target2-Securities (T2S) is an initiative led by the Eurosystem to create a pan-European settlement platform

About T2S

The main objectives of T2S are:

  • Harmonising settlement rules and timing, as well as other post-trade market practices
  • Maximising settlement safety and efficiency through DVP mechanisms and integration of settlement of cash and securities on the same IT platform
  • Pursuing cost reduction and optimising liquidity management T2S features:
    • A single pan-European settlement platform for cross-border and domestic trades
    • Securities denominated in euros and other currencies
    • Settlement in central bank money only

The platform is operated by the Eurosystem to service Central Securities Depositaries (CSDs), national central banks and directly connected parties.

T2S operates securities accounts on behalf of CSDs and cash accounts on behalf of central banks. CSDs keep issuer functions and national settlement specificities.

Development and operational responsibilities have been assigned to the French, German, Italian and Spanish Central Banks.


The scope includes all dematerialised securities having an ISIN code authorised by an issuer CSD participating to T2S on cash equities, bonds and funds.

22 CSDs from 21 countries joined T2S in five migration waves from June 2015 to September 2017.

T2S settles only in euros but is built as a multi-currency system. So far only Denmark has signed the currency participation agreement with the ECB to settle via T2S in Danish Krone as from 2018. UK, Ireland, Switzerland (for CHF only), Norway, Sweden and Bulgaria have chosen not to join T2S to date.

CSDs in T2S

BOGS (Greece)/Clearstream Banking Frankfurt/CSD Slovakia/ CSD Slovenia/Depozitarul Central (Romania)/Euroclear ESES (France, the Netherlands and Belgium)/Iberclear (Spain)/ Interbolsa (Portugal)/Keler (Hungary)/Lux CSD/Malta SE/Monte Titoli (Italy)/Nasdaq CSD SE (Estonia, Latvia and Lituania)/NBB (Belgium)/OeKB (Austria)/SIX SIS ltd (Switzerland)/VP Securities (Denmark)/VP Lux

Industry implications

New T2S features:

  • Changes in account set-up and connectivity
  • New settlement day schedule
  • Changes in matching and settlement reporting
  • Changes in standard Settlement Instructions
  • Market specific changes
  • Corporate action standards changes
  • Enhanced T2S functionalities including partial settlement
  • Other T2S functionalities including hold and release, prioritisation, linkage and pooling

Main benefits for all market participants:

  • Reduction of cross-border transaction costs
  • Optimisation of liquidity and collateral needs, with the possibility to have single collateral and liquidity pools and to rely on auto-collateralisation for intraday financing
  • Opportunity to maximize settlement safety and efficiency

Some high volume players may consider self-settlement as an option with direct access to T2S as a Direct Connected Participant. Access to T2S through the use of a financial intermediary or maintenance of the existing model is also an option depending on the priorities and specificities of your business.

T2S will offer new options for investment fund distribution in the Eurozone.

Custodians and CSDs have adapted their settlement and asset servicing processes to this new model.

T2S provides more transparency and competition between CSDs and custodians, notably for asset servicing.

BNP Paribas Securities Services’ view

We fully support the T2S project and its objective to reduce settlement costs and improve safety and efficiency.

We have been involved in the T2S project since its inception in 2006 and have actively contributed to its evolution at all levels of the project (T2S Advisory Group, National User Groups and technical working groups).

We have shielded our clients from the complexities of the project, the migration and from most of the costs to adapt systems and processes. We propose different settlement and custody solutions tailored to the clients’ needs, including an unbundled custody solution. We also assist in the selection of an appropriate cash solution, a major part in the move to T2S.

Key dates

April 2007 - Launch of the first phase of the T2S project

2007-2015 - Preparation, specification, development and testing phases

June 2015 - First migration wave

September 2017 - Fifth and last migration wave

Download the regulatory memo: