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Document 02012O0013-20190620
Guideline of the European Central Bank of 18 July 2012 on TARGET2-Securities (recast) (ECB/2012/13) (2012/473/EU)
Consolidated text: Guideline of the European Central Bank of 18 July 2012 on TARGET2-Securities (recast) (ECB/2012/13) (2012/473/EU)
Guideline of the European Central Bank of 18 July 2012 on TARGET2-Securities (recast) (ECB/2012/13) (2012/473/EU)
ELI: http://data.europa.eu/eli/guideline/2012/473/2019-06-20
02012O0013 — EN — 20.06.2019 — 002.001
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GUIDELINE OF THE EUROPEAN CENTRAL BANK of 18 July 2012 on TARGET2-Securities (recast) (ECB/2012/13) (OJ L 215 11.8.2012, p. 19) |
Amended by:
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Official Journal |
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No |
page |
date |
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GUIDELINE (EU) 2017/1404 OF THE EUROPEAN CENTRAL BANK of 23 June 2017 |
L 199 |
26 |
29.7.2017 |
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GUIDELINE (EU) 2019/1007 OF THE EUROPEAN CENTRAL BANK of 7 June 2019 |
L 163 |
108 |
20.6.2019 |
GUIDELINE OF THE EUROPEAN CENTRAL BANK
of 18 July 2012
on TARGET2-Securities
(recast)
(ECB/2012/13)
(2012/473/EU)
SECTION I
GENERAL PROVISIONS
Article 1
Subject matter and scope
Article 2
Definitions
For the purposes of this Guideline:
‘central securities depository’ (CSD) means an entity that: (a) enables securities to be established and settled in book entry form, and/or maintains and administers securities on behalf of others through the provision or maintenance of securities accounts; (b) operates or provides for a securities settlement system in accordance with Article 2(a) of Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems ( 1 ) or for entities not located in the European Economic Area (EEA) in accordance with the relevant national legislation equivalent to Directive 98/26/EC and/or is regulated by a central bank; and (c) is recognised as a CSD by national regulations and/or legislation and/or is authorised or regulated as such by a competent authority;
‘delivery-versus-payment’ means a securities settlement mechanism, which links a securities transfer and a funds transfer in such a way as to ensure that delivery occurs only if the corresponding payment occurs;
‘euro area NCB’ means the NCB of a Member State whose currency is the euro;
‘Eurosystem central bank’ means either a euro area NCB or the ECB, as the case may be;
‘Framework Agreement’ means the contractual framework entered into by a CSD and the Eurosystem for the development and operational phase;
‘general functional specifications’ (GFS) means a general functional description of the T2S business application to be developed to comply with the T2S user requirements. It will include elements such as the functional architecture (domains, modules and interactions), the conceptual models, the data model or the data flow process;
‘Level 2-Level 3 agreement’ means the supply and operation agreement that is negotiated between the ►M2 MIB ◄ and the 4CB, endorsed by the Governing Council and subsequently signed by the Eurosystem central banks and the 4CB, as amended when necessary. It contains the additional details of the tasks and responsibilities of the 4CB, the ►M2 MIB ◄ and the Eurosystem central banks;
‘non-euro area NCB’ means the NCB of a Member State whose currency is not the euro;
‘operational phase’ means the time period starting once the first CSD has migrated to T2S;
‘other central bank’ means the central bank of a country that is outside the Union;
‘payment schedule’ means a schedule indicating the payment sequence for instalments of reimbursement to the 4CB;
‘service level agreement’ means both the agreement defining the level of services to be provided by the 4CB to the Eurosystem, and the agreement defining the level of services to be provided by the Eurosystem to the CSDs, in relation to T2S;
‘specification and development phase’ means the time period beginning with the approval of the URD by the Governing Council and ending with the start of the operational phase;
‘T2S business application’ means the software developed and operated by the 4CB on behalf of the Eurosystem with a view to enabling the Eurosystem to provide the T2S services on the T2S platform;
‘T2S Change and Release Management Procedure’ means a set of rules and procedures that is applied whenever a change to T2S services is initiated;
‘T2S platform’ means the hardware and all software components, i.e. all software used excluding the T2S business application, required to run and operate the T2S business application;
‘T2S Programme’ means the set of related activities and deliverables needed to develop T2S until the full migration of all CSDs, which have signed the Framework Agreement and all Eurosystem central banks, non-euro area NCBs and other central banks;
▼M2 —————
‘T2S project account’ means the T2S account used to collect and distribute instalments, reimbursement and fees. The project account can have sub-accounts to separate different kinds of cash flows. It does not have a budgetary character;
‘T2S services’ means the services to be provided by the Eurosystem to CSDs and central banks on the basis of the contractual arrangements entered into between the Eurosystem and CSDs, non-euro area NCBs or other central banks;
‘T2S users’ means CSD participants, legal entities or individuals having a contractual relationship with the CSD for the processing of their securities settlement-related activities in T2S, or members of a central bank, whose currency is available for settlement-related processing in T2S, having a contractual relationship with the central bank for the processing of their securities-related cash-processing activities in T2S;
‘User detailed functional specifications (UDFS)’ means a detailed description of the functions managing the T2S external data flows, from application to application. It will include the necessary information for the users to adjust or to develop their internal information system in view of connecting it to T2S;
‘User Handbook’ means the document describing the way in which T2S users can make use of a number of T2S software functions that are available in a user to application (screen-based) mode;
‘User requirements document’ (URD) means the document setting out the user requirements for T2S as published by the ECB on 3 July 2008 and as subsequently amended through the T2S Change and Release Management Procedure;
‘Advisory Group on Market Infrastructures for Securities and Collateral’ or ‘AMI SeCo’ means the advisory body whose mission is to advise the Eurosystem on matters related to securities clearing and settlement, collateral management and T2S, and whose mandate is published on the ECB's website;
‘Market Infrastructure Board’ or ‘MIB’ means the Eurosystem governance body established pursuant to Decision (EU) 2019/166 of the European Central Bank (ECB/2019/3) ( 2 );
‘Market Infrastructure and Payments Committee’ or ‘MIPC’ means the Eurosystem Committee charged with assisting the decision-making bodies of the Eurosystem in fulfilling the ESCB's statutory duty to promote the smooth operation of payment systems, including business continuity aspects, or its successor.
SECTION II
GOVERNANCE OF T2S
Article 3
Internal governance levels
The internal governance of T2S shall be based on three levels. Level 1 shall consist of the Governing Council, Level 2 shall consist of the ►M2 MIB ◄ and Level 3 shall consist of the 4CB.
Article 4
The Governing Council
In particular, the Governing Council shall have the following competences:
responsibility for the governance of T2S through all of the following activities:
deciding on any issue regarding T2S governance; assuming responsibility for T2S overall and therefore being the final decision-maker if any dispute arises;
taking, on an ad hoc basis, decisions on tasks assigned to the ►M2 MIB ◄ or to the 4CB;
allocating the performance of subsequent or additional specific tasks relating to T2S to the ►M2 MIB ◄ and/or to the 4CB, while determining which decisions relating thereto it reserves to itself;
adopting any decision regarding the organisation of the ►M2 MIB ◄ ;
dealing with requests from members of the T2S Advisory Group, the Non-euro Currencies Steering Group (NECSG) or the CSD Steering Group (CSG) presented in accordance with the rules of the respective group;
deciding on the basic financial regime for T2S, namely:
the pricing policy for T2S services;
the cost methodology for T2S;
the financial arrangements pursuant to Article 12;
deciding on the CSD access criteria;
validating and accepting the T2S Executive Summary Plan; monitoring progress of the T2S Programme and deciding on measures to reduce any delay in implementing T2S;
deciding on the basic operational aspects of T2S, namely:
the T2S operational framework, including the incident and crisis management strategy;
the T2S information security framework;
the T2S Change and Release Management Procedure;
the strategy for testing T2S;
the T2S migration strategy;
the T2S risk management framework;
endorsing the basic contractual framework, namely:
the agreements between Levels 2 and 3;
the service level agreements that shall be negotiated between the ►M2 MIB ◄ and the CSDs and Eurosystem central banks as well as with the 4CB;
the contracts with the CSDs that shall be negotiated by the ►M2 MIB ◄ jointly with the Eurosystem central banks and the CSDs;
the contracts with non-euro area NCBs, other central banks or other competent monetary authorities, including respective service level agreements;
responsibility for taking appropriate measures to ensure enforcement of oversight rules and principles;
deciding on the date of the start of the first migration of CSDs to T2S.
Article 5
The Market Infrastructure Board
The composition and mandate of the MIB is laid down in Decision (EU) 2019/166 (ECB/2019/3). The MIB shall be in charge of the tasks assigned to it in accordance with Decision (EU) 2019/166 (ECB/2019/3).
Article 6
The 4CB
The 4CB shall, in particular, perform all of the following tasks:
preparing, on the basis of the URD and the guidance of the ►M2 MIB ◄ , the GFS, the UDFS and the User Handbooks in accordance with the T2S Executive Summary Plan;
developing and building T2S on behalf of the Eurosystem, and providing the technical components of T2S in accordance with the T2S Executive Summary Plan and with the URD, the GFS and the UDFS and other specifications and service levels;
making T2S available to the ►M2 MIB ◄ in conformity with the approved timing, specifications and service levels;
submitting the following to the ►M2 MIB ◄ for the purposes of the T2S financial arrangements pursuant to Article 12:
an estimate, in a form that can be assessed and/or audited by the relevant European System of Central Banks (ESCB) or Eurosystem committee and/or external auditors, of the costs they will incur in developing and operating T2S;
a financial offer, including the type, payment schedule as well as the time period covered;
obtaining all licences necessary to build and operate T2S and to enable the Eurosystem to be in a position to provide T2S services to the CSDs;
implementing changes to T2S in accordance with the T2S Change and Release Management Procedure;
providing answers in their field of competence to requests formulated by the Governing Council or the ►M2 MIB ◄ ;
providing training, technical and operational support for tests and for migration, under the coordination of the ►M2 MIB ◄ ;
negotiating any amendments to the Level 2-Level 3 agreement with the ►M2 MIB ◄ .
Article 7
Relations with external stakeholders
Article 8
Good governance
In order to avoid conflicts of interest between the provision of T2S services by the Eurosystem and the Eurosystem's oversight functions, the Eurosystem central banks shall ensure that:
►M2 MIB ◄ members, shall not be directly involved in the oversight of T2S or of CSDs that outsource settlement operations to T2S, to the extent that such involvement could give rise to actual or potential conflicts with their functions as ►M2 MIB ◄ Members. Appropriate measures shall be put in place to identify and avoid any such conflicts;
►M2 MIB ◄ members shall not be part of the Internal Auditors Committee (IAC), nor shall they be involved in Level 3 Activities on a day-to-day basis;
T2S oversight activities shall be separated from T2S operational activities.
Article 9
Cooperation and information exchange
SECTION III
FINANCIAL REGIME
Article 10
Pricing policy
The pricing policy for T2S shall be guided by the basic principles of being not for profit, of full cost recovery and of non-discrimination towards CSDs.
Article 11
Cost and accounting methodology
The ►M2 MIB ◄ shall, at a very early stage, involve the relevant ESCB/Eurosystem committees in the assessment of the correct implementation of:
the Eurosystem common cost methodology in the context of T2S cost estimates and the calculation of annual T2S costs; and
Guideline ECB/2010/20 by the ECB and the 4CB in the context of T2S cost and asset recognition.
Article 12
Financial arrangements
The proposal shall also include:
type of offer;
payment schedule;
time period covered;
cost sharing mechanism;
the cost of capital.
Article 13
Payments
Article 14
The Eurosystem’s rights to T2S
SECTION IV
CENTRAL SECURITIES DEPOSITORIES
Article 15
CSD access criteria
CSDs shall be eligible for access to T2S services provided that they:
have been notified in accordance with Article 10 of Directive 98/26/EC or, in the case of a CSD from a non-EEA jurisdiction, they operate under a legal and regulatory framework that is equivalent to that in force in the Union;
have been positively assessed by the competent authorities against (i) Regulation (EU) No 909/2014 of the European Parliament and of the Council ( 4 ), for CSDs located in an EEA jurisdiction, or (ii) the Principles for Financial Market Infrastructures of the Committee on Payment and Market Infrastructures and the International Organisation of Securities Commissions dated April 2012 or a legal framework implementing those principles, for CSDs located in a non-EEA jurisdiction;
make each security/ISIN for which they are an issuer CSD (or technical issuer CSD) available to other CSDs in T2S upon request;
commit to offer to other CSDs in T2S basic custody service on a non-discriminatory basis;
commit towards other CSDs in T2S to carry out their central bank money settlement in T2S if the currency is available in T2S.
Article 16
Contractual relations with CSDs
Article 17
Compliance with regulatory requirements
SECTION V
CURRENCIES OTHER THAN THE EURO
Article 18
Eligibility conditions for inclusion in T2S
A currency other than an EEA currency shall be eligible for use in T2S provided that the Governing Council has approved the eligibility of such currency, if:
the legal, regulatory and oversight framework applicable to settlement in that currency provides substantially the same or a higher degree of legal certainty as that in force in the Union;
the inclusion of such currency in T2S would have a positive impact on the contribution of T2S to the Union securities settlement market;
the other central bank or other authority responsible for such currency enters into a mutually satisfactory currency participation agreement with the Eurosystem.
SECTION VI
T2S PROGRAMME DEVELOPMENT
Article 19
T2S Executive Summary Plan
SECTION VII
FINAL PROVISIONS
Article 20
Level 2-Level 3 agreement
Article 21
Dispute resolution
Article 22
Repeal
Article 23
Entry into force
This Guideline shall enter into force two days after its adoption.
Article 24
Addressees and implementing measures
This Guideline is addressed to all Eurosystem central banks.
ANNEX
NATIONAL USER GROUPS
MANDATE
1. Objectives
1.1. The National User Groups (NUGs) bring together providers and users of securities settlement services within their national markets in order to support the development, implementation and operation of TARGET2-Securities (T2S). They create fora for involving national market participants in the work of the Advisory group on Market Infrastructures for Securities and Collateral (hereinafter ‘AMI SeCo’) and establish the formal link between AMI SeCo and the national markets. They act both as a sounding board for the T2S Programme Office and as providers of input to AMI SeCo in relation to all matters considered by AMI SeCo. As such, they may also suggest issues for AMI SeCo's consideration.
1.2. The NUGs may be involved in the change and release management process and can play an important role in assessing such requests in the context of the operation of the national markets. The NUGs should adopt the T2S principle of seeking to avoid incorporating national specificities in T2S, and should actively promote harmonisation.
2. Responsibilities and Tasks
2.1. The NUGs in markets participating in T2S are responsible for:
assessing the impact of the T2S functionality, and in particular any changes in the T2S user requirements, on their national market. In this context, due consideration should be given to the concept of a ‘lean T2S’ that aims to avoid national specificities and to promote harmonisation;
contributing to the monitoring and implementation tasks associated with the T2S harmonisation activities supported by AMI SeCo;
bringing material concerns of the national market to the attention of AMI SeCo;
raising the awareness of T2S in all segments of the national securities community;
supporting AMI SeCo members representing the national community.
2.2. While fulfilling their responsibilities, the NUGs must adhere to the high standards of transparency that are a key element of T2S.
2.3. Although the focus of this mandate is on markets participating in T2S, markets not yet participating in T2S are also welcome to establish NUGs. Any such market that decides to establish an NUG must follow a similar mandate in order to prepare its market for participation in T2S.
3. Composition and Term
3.1. The NUGs comprise a Chairperson, Secretary and members.
3.2. The Chairperson of an NUG should preferably be a full member or observer of AMI SeCo. This role will typically be performed by a senior official of the relevant national central bank (NCB). If the relevant NCB does not provide or designate the chairperson of the NUG, the chairperson will be nominated by AMI SeCo's Chairperson who will look for consensus amongst the main participants in the relevant market. Should the NUG Chairperson not be a member of AMI SeCo, an AMI SeCo member should coordinate between AMI SeCo and the NUG Chairperson to ensure a close link between AMI SeCo and the NUG. Should no member of an NUG be represented in AMI SeCo, the NUG shall seek close cooperation with AMI SeCo's Secretary in order to be informed about T2S developments.
3.3. The secretary of an NUG is provided by the relevant NCB in euro area countries; in other countries the NUG Secretary is appointed by the NUG Chairperson and should ideally be provided by the respective NCB. The secretary is expected to attend regular briefings organised for NUG secretaries by the T2S Programme Office via the NUG experts network. The NUG secretaries of markets that do not participate in T2S may participate as guests in the NUG experts network.
3.4. The members of an NUG comprise the relevant AMI SeCo members and observers (or their nominated senior representatives, acceptable to the NUG Chairperson) and additional persons with the knowledge and standing to be broadly representative of all categories of users and providers in the national market, including experts on cash matters. NUG members may thus include central securities depositories (CSDs), brokers, banks, investment banks, custodians, issuers and/or their agents, central counterparties, exchanges and multilateral trading facilities, the relevant NCB, regulatory authorities and the relevant banking associations.
3.5. The NUGs' mandate expires at the same time as the mandate of AMI SeCo, i.e. when the Framework Agreement and the Currency Participation Agreement are replaced by a new contract and/or when the Framework Agreement and Currency Participation Agreement are terminated with all signing CSDs and non-euro area central banks.
4. Working Procedures
4.1. NUGs only deal with issues relevant to T2S. They are invited to actively seek briefing from the T2S Programme Office in relation to live issues, and provide national views in a timely fashion on matters as requested by the AMI SeCo Secretary or as raised by the NUG. The T2S Programme Office regularly provides information to the NUGs on markets participating in T2S and organises meetings with such NUG secretaries via the NUG experts network to foster the interaction between the NUGs and the T2S Programme Office.
4.2. The NUGs will endeavour to have regular meetings aligned with the schedule of AMI SeCo meetings, so that they can offer advice to national AMI SeCo members. However, no AMI SeCo member is bound by any such advice. NUGs may also make written submissions to the AMI SeCo via the AMI SeCo Secretary and invite an AMI SeCo member to present its view.
4.3. The NUG Secretary aims to circulate the agenda and relevant documents for discussion at NUG meetings at least 5 business days prior to the meeting. Summaries of NUG meetings will be published on the T2S website and, if deemed appropriate, on the website of the respective NCB. Publication should ideally be made in English and, if required, in the relevant national language within 3 weeks of each NUG meeting.
4.4. The members of the NUGs will be published on the T2S website. The NUGs will also publish an NUG-contact e-mail address on the T2S website, so that participants in national markets know whom to contact to express their views.
( 1 ) OJ L 166, 11.6.1998, p. 45.
( 2 ) Decision (EU) 2019/166 of the European Central Bank of 25 January 2019 on the Market Infrastructure Board and repealing Decision ECB/2012/6 on the establishment of the TARGET2-Securities Board (ECB/2019/3) (OJ L 32, 4.2.2019, p. 14).
( 3 ) OJ L 35, 9.2.2011, p. 31.
( 4 ) Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012 (OJ L 257, 28.8.2014, p. 1).
( 5 ) OJ L 319, 2.12.2011, p. 117.