PRESS RELEASE

Second progress report in the TARGET project

16 September 1997

The European Monetary Institute (EMI) is today publishing a report entitled: Second progress report on the TARGET Project".

This report provides information on recent progress made in various organisational aspects and in the technical implementation of the TARGET system, the real-time gross settlement arrangement for large value cross-border euro payments in Stage Three of Economic and Monetary Union (EMU). The report expands on, and updates, material included in two previous reports, The TARGET system" (released in May 1995) and The First Progress Report on the TARGET Project" (released in August 1996).In particular the report provides additional information on issues concerning: 1) operating time; 2) pricing policies; and 3) provision of settlement services to net settlement systems. An updated version of certain technical annexes (Interlinking Specification, Data Dictionary and Minimum common performance features of RTGS systems within TARGET) and a technical annex concerning end-of-day procedures in TARGET will be available at the EMI and the national central banks (NCBs) at the request of interested parties.

The reference time for TARGET will be European Central Bank (ECB)" time, i.e. the time of the place where the ECB is located. The normal TARGET operating hours will be from 7 a.m. to 6 p.m. ECB time, but some flexibility could be left to the NCBs to open their domestic real-time gross-settlement (RTGS) systems earlier, for particular domestic reasons.

Apart from Saturdays and Sundays, there will be two common holidays for TARGET: Christmas Day and New Year's Day. On other days, the TARGET system will be open, although flexibility will be left to NCBs to close their domestic systems during national holidays when the law or the banking communities so require.

As regards pricing policy for TARGET, it has been agreed that a common transaction fee for cross-border TARGET transfers will be charged, based on the principle of full cost recovery and in line with EU competition policy. The fee will be set within the range of 1.50 to 3.00 euro. The exact fee will be decided by the ECB Governing Council. Settlement services to the EBA Clearing System will be provided by the ECB in Stage Three. NCBs may also open a settlement account for the EBA in their own books.

The test phase of TARGET started mid-June 1997, slightly ahead of schedule; the simulation phase will begin in July 1998.

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