Target2-Securities Framework Agreement

The two most important documents constituting the T2S framework of the T2S Treaty are the framework agreement for the DCT establishing its contractual rights and obligations with the Eurosystem and the monetary participation agreement that governs the relations between the Eurosystem and non-euro area central banks that wish to make their currency available in T2S. Today, only the Central Bank of Denmark has signed this agreement and it foresees the migration of the Danish krone to T2S in 2018. This is the cornerstone of the T2S legal framework. It defines the respective roles and responsibilities of T2S and 4CB, as well as the relationships between them and external stakeholders. In addition, the fundamental principles of the financial system, the rights of the Eurosystem with regard to the platform, the conditions of access for DTCs and the eligibility criteria for DTCs have not been defined in the euro monetary system. It was adopted by the Board of Governors on April 21, 2010. Currencies other than the euro can be used for T2S settlement if the central bank concerned is connected to the platform and is ready to add its currency. In addition to the euro, the Danish krone has been available in T2S since October 2018. The Currency Participation Agreement Monte Titoli was one of the first DCT to migrate to T2S in August 2015. In 2015, Banca d`Italia carefully examined the availability of the custodian and the Italian financial market and coordinated the preparation of an orderly migration. Other depots moved to T2S at different times between September 2016 and September 2017. TARGET2-Securities (T2S) is a unique pan-European platform owned by the Eurosystem that facilitates the centralised settlement of securities in central bank currency, denominated in euros or other currencies.

By grouping title and cash accounts on the same platform, T2S offers an integrated settlement service that works neutrally, borderless and with the most modern features. Market participants usually communicate with T2S via the technical interface of their DCT or central bank, but banks can also give direct instructions to T2S. Directly related participants still need an account with their central bank and a DCT to be able to trade in securities. The migration process from some national systems to T2S lasted about two years and was managed in five „waves“ from 22 June 2015. The Governing Council decided to launch the T2S project in 2008, after several consultations on the market, and to attribute the development and management of the Bundesbank, Banco de Espaa, the Bank of France and the Bank of Italy, which bear the name 4CB. Banca d`Italia is responsible for both the operational management of the platform and the provision of support and support to the national financial community, as well as for TARGET2.