TARGET2

1
TARGET2

• Interconnection with T2S

2
Overview

• The need to adapt TARGET2 to T2S
• System to system connection
• Mandatory amendments to core services
• Value added services
• Interactions between the banks and TARGET2 / T2S

3
TARGET2 adaptations to T2SThe need to adapt
TARGET2 to T2S

• The intensive discussions between the Eurosystem,
  the 3CB and the banks lead to the following
  conclusion
• The connection of T2S to TARGET2 will be
  considered and built as a new interface specially
  designed for T2S
• The same technical interface (with the same
  message standard) should be used for the
  management of both T2 cash accounts and T2S
  Dedicated Cash Accounts
• There is a need of monitoring and consolidating
  liquidity posted in T2 accounts and T2S Dedicated
  Cash Accounts in real time
• Shifts of liquidity (Liquidity Transfers LT) in
  both directions (from T2 to T2S and T2S to T2) to
  be made available
• Data consistency between both systems to be
  ensured (i.e. for reference data)

4
Overview

• The need to adapt TARGET2 to T2S
• System to system connection
• Mandatory amendments to core services
• Value added services
• Interactions between the banks and TARGET2 / T2S

5
TARGET2 adaptations to T2SSystem to system
connection

• Use of ISO 20022 compliant standard including
  Business Application Header
• Creation of a dedicated T2S interface in TARGET2
• Management of liquidity transfers in both
  directions

T 2 S I
ISO 20022
6
Overview

• The need to adapt TARGET2 to T2S
• System to system connection
• Mandatory amendments to core services
• Value added services
• Interactions between the banks and TARGET2 / T2S

7
TARGET2 adaptations to T2SMandatory amendments
to core services

• Implementation of camt5 (without Business
  Application Header)
• (camt5 is the only valid standard for T2S related
  A2A customer interaction in T2)
• Development of new messages (in addition to
  proprietary messages)

In release 5.0 (Nov 2011)
In release 7.0 (Nov 2013)
CAMT 3
CAMT 3

Only for non-T2S related business
CAMT 4
CAMT 4
CAMT 5
For T2S and non-T2S related business
7
8
TARGET2 adaptations to T2SMandatory amendments
to core services

• Event-oriented standing orders for liquidity
  transfers from TARGET2 to T2S (setting up via U2A
  and A2A)
• Optional debit notifications in MX (camt.054)
• Credit notifications in MX (camt.050)
• Current order for liquidity transfers from
  TARGET2 to T2S via U2A or A2A (camt. 050)

Bank
Standing/current order liquidity transfer (U2A
or A2A camt5)
Credit notifications optional debit
notifications (camt5)
ISO 20022
9
Overview

• The need to adapt TARGET2 to T2S
• System to system connection
• Mandatory amendments to core services
• Value added services
• Interactions between the banks and TARGET2 / T2S

10
TARGET2 adaptations to T2SValue added services

• Some TARGET2 participants may not be ready by the
  time T2S goes live to properly interact with T2S
• Several optional services are proposed by the
  Eurosystem
• to manage their cash across TARGET2 and T2S
• But
• These optional services will be developed only if
  TARGET2 participants confirm their needs on the
  basis of the pricing that will be decided. A
  tentative pricing will be announced towards the
  end of the year.

10
11
TARGET2 adaptations to T2SValue added services

• Intraday balance of DCA (gt cash integration) in
  U2A / A2A (camt.003)
• Liquidity transfers from TARGET2 to T2S via MT202
• Liquidity transfer from T2S to TARGET2 via MT202,
  U2A or A2A (camt.050)
• Credit notifications via MT202 and optional debit
  notifications via MT900
• DCA end of day statements (MT940/MT950 or
  camt.053 without BAH)
• Access to T2S GUI via the ICM (to be confirmed)

Bank
DCA intraday balance (U2A/A2A camt5)
Liquidity transfer (MT202) Liquidity transfer
(U2A/A2A camt5) Access to T2S GUI via the ICM
Optional debit notifications (MT900)
Credit notifications (MT202)
DCA end of day statement (MT940/MT950 or camt5
without BAH)
ISO 20022
Cash related information flows
12
Overview

• The need to adapt TARGET2 to T2S
• System to system connection
• Mandatory amendments to core services
• Value added services
• Interactions between the banks and TARGET2 / T2S

13
TARGET2 adaptations to T2SInteractions between
the banks and TARGET2 / T2S

• Eurosystems offer for TARGET2 (cash side)

Central Bank Money
RTGS
DCA
14
TARGET2 adaptations to T2SInteractions between
the banks and TARGET2 / T2S
Bank
CSD
U2A/camt5/MT
Securities related information flows
Cash related information flows