TARGET2 Interconnection with T2S
Jan 20, 2016
TARGET2Interconnection with T2S
• 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
Overview
2
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)
3
• 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
Overview
4
ISO 20022
TARGET2 adaptations to T2SSystem to system connection
RTGS RTGS
RTGS
T2SI
Securities
Securities
DCA
DCA
• 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
5
• 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
Overview
6
• 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 4
CAMT 3
CAMT 4
CAMT 5
TARGET2 adaptations to T2SMandatory amendments to core services
7
Only for non-T2S related
business
For T2S and non-T2S related
business
TARGET2 adaptations to T2SMandatory amendments to core services
8
ISO 20022
RTGS RTGS
RTGS
Securities
Securities
DCA
DCARTGS
Bank
• 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)
Standing/current order liquidity transfer
(U2A or A2A camt5)
Credit notifications optional debit notifications (camt5)
• 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
Overview
9
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
ButThese 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.
TARGET2 adaptations to T2SValue added services
10
• Intraday balance of DCA (=> 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)
TARGET2 adaptations to T2SValue added services
11
ISO 20022
RTGS RTGS
RTGS
Securities
Securities
DCA
DCARTGS
Bank
Liquidity transfer (MT202)Liquidity transfer (U2A/A2A camt5)Access to T2S GUI via the ICM
Optional debit notifications (MT900)DCA intraday balance (U2A/A2A camt5)
DCA end of day statement (MT940/MT950 or camt5 without BAH)
Cash related information flows
Credit notifications (MT202)
• 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
Overview
12
Eurosystem’s offer for TARGET2 (cash side)
13
CentralBank
Money
TARGET2 adaptations to T2SInteractions between the banks and TARGET2 / T2S
RTGSDCA
ISO20022 compliant interface• Access to RTGS related features via
TARGET2 using a new ISO20022 compliant interface.
• Access to DCA related features via the regular T2S ISO20022 compliant interface.
Sta
nd
ard
off
er
Converted by TARGET2
Op
tion
al off
er
•Access to the main DCA features via TARGET2:
Intraday balance on the DCALiquidity shift (push and pull)End of day statement for the DCA
•Eased access to the T2S GUI for other features
Alternative interface (legacy standards)
ISO20022
Legacy sta
nd
ard
sConversion by TARGET2
14
RTGS RTGS
RTGS
Securities
Securities
DCA
DCAISO
RTGS
Bank
Securities related information flows
Cash related information flows
CSD
ISO
U2A/camt5/MT ISO
TARGET2 adaptations to T2SInteractions between the banks and TARGET2 / T2S