SETTLING WITHOUT BORDERS

A single securities engine in Europe T2S is a project implemented by the (the European and the national central banks of the euro area) with the aim of creating a single securities settlement engine in Europe. T2S will provide European central securities depositories (CSDs) with a centralised service for delivery-versus-payment (DvP) settlement of securities transactions in central bank money at low cost, irrespective of whether transactions are settled at the national level or across national borders.

Once T2S enters into operation in 2015, a single set of rules, standards and tariffs will be applied to all transactions across all T2S markets. T2S will thus help to overcome the complexity and fragmentation of the current European market infrastructure, composed of over 30 different securities settlement systems. T2S will be neutral with respect to all countries and market infrastructures and all business models adopted by CSDs and market participants.

T2S was conceived as a multicurrency system. It will extend beyond the euro area, enabling the interested non-euro area central banks to connect to T2S with their currencies. Securities will be settled against euro as well as against any available non-euro currencies.

T2S will integrate onto a single IT platform both the market participants’ securities accounts, held with either one or multiple CSDs, and their dedicated central bank cash accounts, held with the respective national central bank. To know more about how T2S will work in practice, watch the T2S Animation in the Videos section at www.t2s.eu Making Europe a better place to invest T2S constitutes the infrastructure necessary to set up a single European market for securities services. By making post-trading in Europe more secure and more efficient, T2S will contribute to making Europe a better place to invest.

T2S will reduce risk in the post-trade environment in Europe: • by delivering real-time gross settlement in central bank money in domestic markets as well as cross-border; • by integrating securities and cash accounts onto a single platform; • by incorporating several features that aim to help banks optimise their liquidity and collateral management; • by promoting greater diversification and sharing of risk. T2S will streamline the settlement process in Europe: • by enabling banks to streamline and potentially consolidate their back offices; • by fostering the harmonisation of services, rules and market practices in many crucial areas. T2S will enhance freedom of choice in the securities settlement industry in Europe: • by increasing transparency, openness and competition between European CSDs; • by separating the “infrastructure” from the “service”, giving customers in T2S more freedom of choice as regards where they want to trade and settle. T2S will reduce the cost of settling securities transactions in Europe: • by substantially reducing fees for settling across national borders; • by assisting CSDs in their adaptation plans; • by stimulating competition among CSDs; • by creating a multicurrency system capable of settling euro as well as non-euro currencies. SETTLING WITHOUT BORDERS

The T2S Community 23 European CSDs have already signed up for T2S, thus becoming part of the T2S Community. The T2S Community also includes the central banks of the Eurosystem and the Danish central bank, which has decided to allow settlement of the Danish krone in T2S as of 2018. The T2S Community remains open to other markets and currencies that may decide to join over time.

The governance of T2S is structured so as to ensure the successful launch of the platform in 2015 and its smooth operation thereafter. The Governing Council of the , the ultimate decision-making body for T2S, has entrusted the T2S Board with the task of delivering the system in line with market expectations, within budget, and in accordance with the foreseen time frame. All participating CSDs are members of the CSD Steering Group, which represents the “common voice” of all participating CSDs vis-à-vis the Eurosystem. Any non-euro area central banks whose currencies might be settled in T2S will retain control over their currencies through the Non-Euro Currencies Steering Group. Finally, a broad range of stakeholders, including CSDs, banks and central banks, contribute to the work of the T2S Advisory Group, whose objective is to ensure that T2S meets market needs.

T2S is being developed and will be operated by four Eurosystem central banks, referred to as the “4CB” (, Banque de France, Banco de España and Banca d’Italia). Connectivity to the T2S platform will be provided by SWIFT and a consortium composed of SIA and Colt. Users can choose to connect via one of these two providers or, alternatively, opt for a direct link connection, supplied via the Eurosystem’s existing communication network.

More information on the T2S project: The T2S project is fully transparent. All T2S-related documents are published on the T2S website at www.t2s.eu, where you can find any news about the project as well as all legal, functional and technical documents. The website also provides information on the project’s governance and the pricing of the services that will be offered by the T2S platform.

Should you have any specific questions related to T2S, please contact us via email on [email protected]. CSDs participating in T2S: • Eesti Väärtpaberikeskus AS (Estonia) • Bank of Greece Securities Settlement System – BOGS (Greece) • Centrálny depozitár cenných papierov SR, a. s. (Slovakia) • Clearstream Banking AG (Germany) • Cyprus Stock Exchange • Depozitarul Central S.A. (Romania) • Euroclear Belgium • Euroclear Finland Oy • Euroclear France • Euroclear Nederland • Iberclear – BME Group (Spain) • Interbolsa – Sociedade Gestora de Sistemas de Liquidação e de Sistemas Centralizados de Valores Mobiliários, S.A. (Portugal) • KDD – Centralna Klirinško Depotna Družba, d.d. (Slovenia) • Központi Elszámolóház és Értéktár Zrt. – KELER (Hungary) • Lietuvos centrinis vertybinių popierių depozitoriumas (Lithuania) • LuxCSD S.A. (Luxembourg) • Malta Stock Exchange • Monte Titoli S.p.A. (Italy) • National Bank of Belgium Securities Settlement System – NBB-SSS (Belgium) • Oesterreichische Kontrollbank Aktiengesellschaft (Austria) • SIX SIS Ltd (Switzerland) • VP LUX S.à.r.l. (Luxembourg) • VP Securities A/S (Denmark) © European Central Bank, October 2012 www.t2s.eu Website: http://www.ecb.europa.eu