Task Force on smooth cross-CSD settlement

1. Introduction

The T2S project was designed from the beginning to make cross-border settlement as efficient and inexpensive as domestic settlement. Several harmonisation initiatives have been launched in parallel to help achieve that. However, there still remain differences between the settlement processes at the different CSDs that will make use of T2S. Since some of these remaining issues can hamper smooth (safe and efficient) cross-CSD settlement in T2S it is important to identify them, investigate their impact on cross-CSD settlement and offer consistent practical solutions for addressing them in T2S, in order to promote safe and efficient inter-operability between CSDs. This is the scope of work to be done by the proposed Task Force of the AG on smooth cross-CSD settlement in T2S.

2. Mandate

The AG mandates the Task Force to:

1. Produce a detailed, concrete and exhaustive list of issues that would impede T2S Actors (including CSDs and CSD users) from being able to effect or to process cross-CSD settlement in T2S in a safe and efficient manner. The Task Force will in addition categorize the issues and assign priorities for their resolution.
2. Analyse for each issue on the list possible options, and then propose a practical solution to tackle it using existing functionalities of T2S as described in the URD and taking into account the standards and recommendations developed by other European bodies and initiatives.
3. For issues, for which no efficient practical solutions can be identified, make recommendation for harmonisation and identify the relevant stakeholders that need to tackle the issue. Any work on harmonisation should be dedicated to an already existing harmonisation initiative at European level.
4. Present to the AG final recommendations regarding all the issues identified no later than June 2011.

The outcome of the Task Force should represent the consensus of its members whereas the final validation of the proposals is the responsibility of the AG and where appropriate the PB. The Chairperson of the Task Force should report to the AG on the progress made and seek guidance where required.

The mandate of the Task Force on smooth cross-CSD settlement in T2S expires at the end of June 2011 but may be reviewed and renewed as required.

3. Composition

Participation in the Task Force on smooth cross-CSD settlement in T2S is open to all stakeholders from markets that have indicated their intention to use T2S when implemented. It is in the responsibility of the stakeholders to identify an individual of their organization who will be nominated to serve as a member of the Task Force. However, preference will be given to the participants in the two workshops on smooth cross-CSD settlement in T2S that already took place in 2010. In addition, the number of participants in the Task Force will be limited in order to facilitate expert discussions while seeking to have adequate representation of all markets involved. Participants in the Task Force will be expected to commit significant time in order to achieve progress within a short time period.

The Task Force will be composed of:

• The Chairperson, appointed by the AG

The Chairperson shall (1) decide on the frequency, format and agenda of the meetings; (2) conduct the Task Force meetings; (3) invite external experts from CSDs, NCBs, banks and any other relevant T2S stakeholder and/or ECB/4CB T2S Project Team members to the Task Force meetings on specific topic; (4) represent the Task Force in liaisons with other relevant European bodies and initiatives; (5) report to the AG.

• The Rapporteur

The Rapporteur shall be a member of the ECB T2S Programme Office and (1) co-ordinate the organisation of the meetings and relevant documents; (2) support the Chairperson in preparations for the Task Force’s meetings; (3) draft the outcome of the meetings; (4) support the Chairperson in liaisons with other relevant European bodies and initiatives; (5) support the Chairperson in preparations for reporting to the AG.

• Members, appointed after discussion between the AG Chairperson and the Task Force Chairperson

Members shall (1) represent expertise on functional aspects of securities settlement processes relevant to smooth cross-CSD settlement in T2S, (2) have very good knowledge of the T2S URD, (3) preferably participate also in other relevant European bodies and initiatives.

Participation to the Task Force is on a strictly personal basis. Should a member be unable to attend a meeting, he/she will not be able to designate an alternative unless the Chairperson allows it. In addition, regular attendance is a pre-requisite for membership in the Task Force and membership will cease should a member be absent for a total of more than two meetings.

If a member leaves the entity he/she represents, his/her membership will cease with immediate effect and his/her entity may propose a substitute member to the AG Chairman.

4. Working procedures

Meetings
The Task Force on smooth cross-CSD settlement in T2S should meet as regularly as required to fulfil its mandate and upon invitation of its Chairperson. The first meeting of the Task Force shall take place as soon as possible after its constitution. Ad-hoc meetings on issues of individual domestic markets could be organised. The use of ad-hoc workshops and small teams can also be envisaged. When considered feasible, written procedures may be applied.

Interactions with the AG
The Task Force on smooth cross-CSD settlement in T2S will present its outcome to the AG and will follow its guidance in its activities.

Mini-consultations
The Task Force on smooth cross-CSD settlement in T2S may decide to issue mini-consultations or questionnaires and involve NUGs on dedicated topics in order to better reflect the market needs in standardising T2S functionalities.

Transparency
All documents that are discussed by the Task Force on smooth cross-CSD settlement in T2S will be posted on the ECB website to ensure full transparency. In exceptional cases, the Chairperson may decide not to post individual documents on the ECB website if she/he considers such documents to be of confidential nature.

Planning
The proposals made and the decisions taken by the previous Workshops on smooth cross-CSD settlement will be the basis for the planning of activities of the Task Force on smooth cross-CSD settlement in T2S.