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11.8.2012 Official
Journal
of
the
European
Union L
215/19
GUIDELINES
GUIDELINE OF THE EUROPEAN CENTRAL BANK
of 18 July 2012
on TARGET2-Securities
(recast)
(ECB/2012/13)
(2012/473/EU)
THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,
in central bank money avoids liquidity risks and is
therefore essential for sound post-trading of securities,
and for the financial market in general.
Having regard to the Treaty on the Functioning of the European
Union, and in particular the first indent of Article 127(2)
thereof,
(4) On
17
July
2008,
the
Governing
Council
decided
to
launch the T2S project and to provide the resources
required until its completion. On the basis of an offer
Having regard to the Statute of the European System of Central
made by the Deutsche Bundesbank, the Banco de Espaa,
Banks and of the European Central Bank and in particular
the Banque de France and the Banca d’Italia (hereinafter
Articles 3.1, 12.1, 17, 18 and 22 thereof,
the ‘4CB’), the Governing Council also decided that T2S
would be developed and operated by the 4CB.
Whereas:
(5) The
Governing
Council
adopted
Decision
ECB/2012/6
of
29 March 2012 on the establishment of the TARGET2-
Securities Board and repealing Decision ECB/2009/6 ( 2 ).
(1) A
number
of
changes
are
made
to
Guideline
ECB/2010/2
The T2S Board is a streamlined management body of the
of 21 April 2010 on TARGET2-Securities ( 1 ). In the
Eurosystem that will develop proposals for the Governing
interests of clarity that Guideline should be recast.
Council on key strategic issues and execute tasks of a
purely technical nature. The T2S Board’s mandate
contained in Annex I to Decision ECB/2012/6, represents
(2)
On 6 July 2006, the Governing Council of the European
one of the cornerstones of T2S governance. The T2S
Central Bank (ECB) decided to explore, in cooperation
Board was simultaneously entrusted with certain imple
with the central securities depositories (CSDs) and other
menting tasks by the Eurosystem central banks so that it
market participants, the possibility of setting up a new
can be fully operational and act on behalf of the whole
Eurosystem service for securities settlement in central
Eurosystem.
bank money, to be called TARGET2-Securities (T2S).
As part of the Eurosystem’s tasks in accordance with
Articles 17, 18 and 22 of the Statute of the ESCB, T2S
is aimed at facilitating post-trading integration by
(6) This
Guideline
lays
down
in
particular
the
basic
foun
offering core, neutral and borderless pan-European cash
dations of T2S in its specification, development and
and securities settlement in central bank money so that
operational phases. It is complemented by additional
CSDs can provide their customers with harmonised and
legal acts and contractual arrangements under the
commoditised delivery-versus-payment settlement
ultimate responsibility of the Governing Council as T2S
services in an integrated technical environment with
is further developed.
cross-border capabilities. As the provision of central
bank money is a core task of the Eurosystem, T2S has
the nature of a public service. The euro area national
central banks (NCBs) will provide collateral management
The internal governance of T2S is based on three levels.
services and settlement in central bank money in T2S.
On the first level of governance, ultimate decision-
making in relation to T2S vests in the Governing
Council, which assumes overall responsibility for T2S
and, under Article 8 of the Statute of the ESCB, is the
(3)
Article 22 of the Statute of the ESCB mandates the Euro
decision-maker for the whole Eurosystem. On the second
system to ‘ensure efficient and sound clearing and
level of governance, the T2S Board was established to
payment systems within the Union’. Moreover, settlement
assist the ECB decision-making bodies in ensuring
( 1 ) OJ L 118, 12.5.2010, p. 65.
( 2 ) OJ L 117, 1.5.2012, p. 13.

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the successful and timely completion of the T2S
(b) how access of CSDs to T2S and contractual relations with
Programme. Finally, the third level of governance is
CSDs shall be determined; (c) how currencies other than the
provided by the 4CB.
euro become eligible for use in T2S; (d) the development of
T2S.
(7) As
T2S
services
are
offered
to
CSDs,
non-euro
area
NCBs
Article 2
and other central banks on the basis of contractual
arrangements, it is important to structure the relationship
Definitions
with them throughout the development, migration and
subsequent operation of T2S. A CSD Steering Group and
For the purposes of this Guideline:
a Non-euro Currencies Steering Group have been set up
for that purpose. National User Groups are a forum for
(1) ‘central securities depository’ (CSD) means an entity that:
communication and interaction with providers and users
(a) enables securities to be established and settled in book
of securities settlement services within their national
entry form, and/or maintains and administers securities on
market. The T2S Advisory Group is a forum for
behalf of others through the provision or maintenance of
communication and interaction between the Eurosystem
securities accounts; (b) operates or provides for a securities
and external T2S stakeholders.
settlement system in accordance with Article 2(a) of
Directive 98/26/EC of the European Parliament and of
the Council of 19 May 1998 on settlement finality in
(8)
T2S is not a commercial venture and is not intended to
payment and securities settlement systems ( 1 ) or for
compete with CSDs or any other market participant.
entities not located in the European Economic Area
Thus, while the financial regime of T2S aims at full
(EEA) in accordance with the relevant national legislation
cost recovery, T2S services are not provided for profit.
equivalent to Directive 98/26/EC and/or is regulated by a
An internal decision has been taken on the total
central bank; and (c) is recognised as a CSD by national
investment in T2S for the Eurosystem, while the
regulations and/or legislation and/or is authorised or
decision on the pricing of T2S services aims at full
regulated as such by a competent authority;
cost recovery. Moreover, the Eurosystem should strictly
apply the principle of non-discrimination regarding
(2) ‘delivery-versus-payment’ means a securities settlement
CSDs, and aim to ensure a level playing field among
mechanism, which links a securities transfer and a funds
CSDs outsourcing their settlement platform to T2S.
transfer in such a way as to ensure that delivery occurs
only if the corresponding payment occurs;
(9) T2S
is
a
technical
device
that
will
not
only
be
available
(3) ‘euro area NCB’ means the NCB of a Member State whose
for settlement in euro, it will also be open to non-euro
currency is the euro;
area NCBs and other central banks that may wish to
participate by making their currency available for
central bank money settlement in T2S, as provided for
(4) ‘Eurosystem central bank’ means either a euro area NCB or
in this Guideline,
the ECB, as the case may be;
(5) ‘Framework Agreement’ means the contractual framework
HAS ADOPTED THIS GUIDELINE:
entered into by a CSD and the Eurosystem for the devel
opment and operational phase;
SECTION I
(6) ‘general functional specifications’ (GFS) means a general
GENERAL PROVISIONS
functional description of the T2S business application to
be developed to comply with the T2S user requirements. It
Article 1
will include elements such as the functional architecture
Subject matter and scope
(domains, modules and interactions), the conceptual
models, the data model or the data flow process;
1. T2S shall be based on a single technical platform inte
grated with central bank real-time gross settlement systems. It
(7) ‘Level 2-Level 3 agreement’ means the supply and
shall be a service provided by the Eurosystem to CSDs allowing
operation agreement that is negotiated between the T2S
for the core, neutral and borderless settlement of securities
Board and the 4CB, endorsed by the Governing Council
transactions on a delivery-versus-payment basis in central
and subsequently signed by the Eurosystem central banks
bank money.
and the 4CB, as amended when necessary. It contains the
additional details of the tasks and responsibilities of the
4CB, the T2S Board and the Eurosystem central banks;
2. This Guideline lays down the rules on the internal
governance of T2S. It also lays down the main features of
T2S, defining the respective roles and responsibilities of the
(8) ‘non-euro area NCB’ means the NCB of a Member State
T2S Board and the 4CB, and the relations between them
whose currency is not the euro;
during the specification, development and operational phases.
It also specifies the main decisions to be taken in relation to
(9) ‘operational phase’ means the time period starting once the
T2S by the Governing Council. Moreover, this Guideline
first CSD has migrated to T2S;
provides for the basic principles of all of the following in
relation to T2S: (a) the financial regime, rights and warranties;
( 1 ) OJ L 166, 11.6.1998, p. 45.

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11.8.2012 Official
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Union L
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(10) ‘other central bank’ means the central bank of a country
external data flows, from application to application. It will
that is outside the Union;
include the necessary information for the users to adjust or
to develop their internal information system in view of
(11) ‘payment schedule’ means a schedule indicating the
connecting it to T2S;
payment sequence for instalments of reimbursement to
the 4CB;
(23) ‘User Handbook’ means the document describing the way
in which T2S users can make use of a number of T2S
(12) ‘service level agreement’ means both the agreement
software functions that are available in a user to appli
defining the level of services to be provided by the 4CB
cation (screen-based) mode;
to the Eurosystem, and the agreement defining the level of
services to be provided by the Eurosystem to the CSDs, in
(24) ‘User requirements document’ (URD) means the document
relation to T2S;
setting out the user requirements for T2S as published by
the ECB on 3 July 2008 and as subsequently amended
(13) ‘specification and development phase’ means the time
through the T2S Change and Release Management
period beginning with the approval of the URD by the
Procedure.
Governing Council and ending with the start of the oper
ational phase;
SECTION II
(14) ‘T2S business application’ means the software developed
GOVERNANCE OF T2S
and operated by the 4CB on behalf of the Eurosystem with
a view to enabling the Eurosystem to provide the T2S
Article 3
services on the T2S platform;
Internal governance levels
(15) ‘T2S Change and Release Management Procedure’ means a
The internal governance of T2S shall be based on three levels.
set of rules and procedures that is applied whenever a
Level 1 shall consist of the Governing Council, Level 2 shall
change to T2S services is initiated;
consist of the T2S Board and Level 3 shall consist of the 4CB.
(16) ‘T2S platform’ means the hardware and all software
Article 4
components, i.e. all software used excluding the T2S
business application, required to run and operate the
The Governing Council
T2S business application;
1. The
Governing
Council
shall
be
responsible
for
the
(17) ‘T2S Programme’ means the set of related activities and
direction, overall management and control of T2S. It shall
deliverables needed to develop T2S until the full migration
also be responsible for ultimate decision-making in relation to
of all CSDs, which have signed the Framework Agreement
T2S and shall decide on the allocation of tasks not specifically
and all Eurosystem central banks, non-euro area NCBs and
attributed to Levels 2 and 3.
other central banks;
2. In
particular,
the
Governing
Council
shall
have
the
(18) ‘T2S Board’ means the Eurosystem management body
following competences:
established pursuant to Decision ECB/2012/6, which has
the task of developing proposals for the Governing
(a) responsibility for the governance of T2S through all of the
Council on key strategic issues and executing tasks of a
following activities:
purely technical nature in relation to T2S;
(i) deciding on any issue regarding T2S governance;
(19) ‘T2S project account’ means the T2S account used to
assuming responsibility for T2S overall and therefore
collect and distribute instalments, reimbursement and
being the final decision-maker if any dispute arises;
fees. The project account can have sub-accounts to
separate different kinds of cash flows. It does not have a
(ii) taking, on an ad hoc basis, decisions on tasks assigned
budgetary character;
to the T2S Board or to the 4CB;
(20) ‘T2S services’ means the services to be provided by the
(iii) allocating the performance of subsequent or additional
Eurosystem to CSDs and central banks on the basis of the
specific tasks relating to T2S to the T2S Board and/or
contractual arrangements entered into between the Euro
to the 4CB, while determining which decisions relating
system and CSDs, non-euro area NCBs or other central
thereto it reserves to itself;
banks;
(21) ‘T2S users’ means CSD participants, legal entities or indi
(iv) adopting any decision regarding the organisation of the
viduals having a contractual relationship with the CSD for
T2S Board;
the processing of their securities settlement-related
activities in T2S, or members of a central bank, whose
(b) dealing with requests from members of the T2S Advisory
currency is available for settlement-related processing in
Group, the Non-euro Currencies Steering Group (NECSG) or
T2S, having a contractual relationship with the central
the CSD Steering Group (CSG) presented in accordance with
bank for the processing of their securities-related cash-
the rules of the respective group;
processing activities in T2S;
(c) deciding on the basic financial regime for T2S, namely:
(22) ‘User detailed functional specifications (UDFS)’ means a
detailed description of the functions managing the T2S
(i) the pricing policy for T2S services;

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Official Journal of the European Union
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(ii) the cost methodology for T2S;
(b) developing and building T2S on behalf of the Eurosystem,
and providing the technical components of T2S in
(iii) the financial arrangements pursuant to Article 12;
accordance with the T2S Executive Summary Plan and
with the URD, the GFS and the UDFS and other specifi
(d) deciding on the CSD access criteria;
cations and service levels;
(e) validating and accepting the T2S Executive Summary Plan;
(c) making T2S available to the T2S Board in conformity with
monitoring progress of the T2S Programme and deciding
the approved timing, specifications and service levels;
on measures to reduce any delay in implementing T2S;
(d) submitting the following to the T2S Board for the purposes
(f) deciding on the basic operational aspects of T2S, namely:
of the T2S financial arrangements pursuant to Article 12:
(i) the T2S operational framework, including the incident
and crisis management strategy;
(i) an estimate, in a form that can be assessed and/or
audited by the relevant European System of Central
(ii) the T2S information security framework;
Banks (ESCB) or Eurosystem committee and/or
external auditors, of the costs they will incur in
(iii) the T2S Change and Release Management Procedure;
developing and operating T2S;
(iv) the strategy for testing T2S;
(ii) a financial offer, including the type, payment schedule as
well as the time period covered;
(v) the T2S migration strategy;
(e) obtaining all licences necessary to build and operate T2S
(vi) the T2S risk management framework;
and to enable the Eurosystem to be in a position to provide
T2S services to the CSDs;
(g) endorsing the basic contractual framework, namely:
(f) implementing changes to T2S in accordance with the T2S
(i) the agreements between Levels 2 and 3;
Change and Release Management Procedure;
(ii) the service level agreements that shall be negotiated
(g) providing answers in their field of competence to requests
between the T2S Board and the CSDs and Eurosystem
formulated by the Governing Council or the T2S Board;
central banks as well as with the 4CB;
(h) providing training, technical and operational support for
(iii) the contracts with the CSDs that shall be negotiated by
tests and for migration, under the coordination of the
the T2S Board jointly with the Eurosystem central
T2S Board;
banks and the CSDs;
(iv) the contracts with non-euro area NCBs, other central
(i) negotiating any amendments to the Level 2-Level 3
banks or other competent monetary authorities,
agreement with the T2S Board.
including respective service level agreements;
2. The
4CB
shall
be
jointly
and
severally
liable
vis-à-vis
the
(h) responsibility for taking appropriate measures to ensure
Eurosystem for the performance of their tasks. The liability shall
enforcement of oversight rules and principles;
cover fraud, wilful misconduct and gross negligence. The
liability regime shall be further specified in the Level 2-Level
(i) deciding on the date of the start of the first migration of
3 agreement.
CSDs to T2S.
3. Outsourcing
or
subcontracting
the
above
tasks
by
the
4CB
Article 5
to external providers shall be without prejudice to the 4CB’s
liability towards the Eurosystem and other stakeholders and
The T2S Board
shall be transparent to the T2S Board.
The composition and mandate of the T2S Board is laid down in
Decision ECB/2012/6. The T2S Board shall be in charge of the
Article 7
tasks assigned to Level 2 within the general framework defined
Relations with external stakeholders
by the Governing Council.
1. The
T2S
Advisory
Group
is
a
forum
for
communication
Article 6
and interaction between the Eurosystem and external T2S stake
holders. The T2S Advisory Group shall provide advice to the
The 4CB
T2S Board and may, in exceptional cases, bring matters to the
1. The 4CB shall develop and operate T2S and shall provide
Governing Council’s attention.
information on their internal organisation and allocation of
work to the T2S Board.
2. The
T2S
Advisory
Group
shall
be
chaired
by
the
chair
person of the T2S Board. The composition and mandate of the
The 4CB shall, in particular, perform all of the following tasks:
T2S Advisory Group are laid down in the Annex.
(a) preparing, on the basis of the URD and the guidance of the
3. The
T2S
Advisory
Group
shall
perform
its
function
T2S Board, the GFS, the UDFS and the User Handbooks in
according to the Rules of Procedure which are prepared by
accordance with the T2S Executive Summary Plan;
the T2S Advisory Group and endorsed by the T2S Board.

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4. The
CSG
is
the
T2S
governance
body
which,
with
respect 3. The
T2S
Board
shall
report
on
a
regular
basis
to
the
to a set of matters stipulated in the Framework Agreement, shall
Governing Council on the development of the T2S
make resolutions and deliver opinions on behalf of the CSDs
Programme and the operation of T2S. These reports shall be
having signed the Framework Agreement. The CSG’s mandate is
sent to the EISC, which may advise the ECB’s decision-making
annexed to the Framework Agreement.
bodies. The Payment and Settlement Systems Committee (PSSC)
shall receive the reports for information purposes.
5. The NECSG is the T2S governance body which, with
respect to a set of matters stipulated in the Currency Partici
4.
The T2S Board shall share the agendas, the summaries and
pation Agreement shall make resolutions and deliver opinions
the relevant documentation of its meetings with the members of
on behalf of the non-euro area NCBs and other central banks
the PSSC, to allow such members to provide input in case of
having signed the Currency Participation Agreement. The
need.
NECSG’s mandate is annexed to the Currency Participation
Agreement.
5. The T2S Board may consult, and may be consulted by,
any competent ESCB committees as necessary.
6. The
National
User
Groups
are
a
forum
for
communication
and interaction with providers and users of securities settlement
6. The
4CB
shall
provide
regular
reports
on
the
T2S
services within their national market, in order to support the
Programme and on the operation of T2S to the T2S Board.
development and implementation of T2S and assess the impact
of T2S on the national markets. As a rule, the National User
Groups shall be chaired by the respective NCBs. The
7. The
content
and
detailed
procedure
for
the
reporting
composition and mandate of the National User Groups are
obligations of the T2S Board and of the 4CB shall be detailed
laid down in the Annex.
in the Level 2-Level 3 agreement.
SECTION III
Article 8
FINANCIAL REGIME
Good governance
Article 10
1. In
order
to
avoid
conflicts
of
interest
between
the
provision of T2S services by the Eurosystem and the Euro
Pricing policy
system’s regulatory functions, the Eurosystem central banks
shall ensure that:
The pricing policy for T2S shall be guided by the basic prin
ciples of being not for profit, of full cost recovery and of non-
discrimination towards CSDs.
(a) T2S Board members shall not be directly involved in the
oversight of T2S or of CSDs that outsource settlement oper
Article 11
ations to T2S. They may not be part of a Eurosystem/ESCB
committee having any of these oversight responsibilities.
Cost and accounting methodology
They shall not be part of the Eurosystem IT Steering
Committee (EISC) or the Internal Auditors Committee; and
1. T2S
shall
be
subject
to
the
Eurosystem
common
cost
methodology and the Guideline ECB/2010/20 of 11 November
2010 on the legal framework for accounting and financial
(b) there shall be separation between T2S oversight and T2S
reporting in the European System of Central Banks ( 1 ) unless
operational activities.
the Governing Council decides otherwise.
2. The
T2S
Board
shall
be
subject
to
reporting
obligations, 2. The
T2S
Board
shall,
at
a
very
early
stage,
involve
the
controlling and audit, as defined in this Guideline. Audits
relevant ESCB/Eurosystem committees in the assessment of
relating to the development, operation and cost of T2S shall
the correct implementation of:
be initiated and conducted on the basis of the principles and
arrangements set out in the Governing Council’s ESCB audit
(a) the Eurosystem common cost methodology in the context
policy in force at the time when the relevant audit takes place.
of T2S cost estimates and the calculation of annual T2S
costs; and
Article 9
(b) Guideline ECB/2010/20 by the ECB and the 4CB in the
Cooperation and information exchange
context of T2S cost and asset recognition.
1. The
4CB
and
the
T2S
Board
shall
cooperate
with
each
other, exchange information and provide technical and other
Article 12
support to each other during the development and operation
of T2S.
Financial arrangements
1. The
T2S
Board
shall
submit
proposals
on
the
adjustment
2. The
4CB,
the
other
Eurosystem
central
banks
and
the
T2S of the T2S financial regime to the Governing Council, which
Board shall inform each other immediately of any issues that
shall include the T2S costs, i.e. the 4CB and ECB costs for
could materially affect the development or building and
developing, maintaining and operating T2S.
operation of T2S, and shall endeavour to mitigate any related
risk.
( 1 ) OJ L 35, 9.2.2011, p. 31.

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2. The
proposal
shall
also
include:
(c) make each security/ISIN for which they are an issuer CSD
(or technical issuer CSD) available to other CSDs in T2S
(a) type of offer;
upon request;
(b) payment schedule;
(d) commit to offer to other CSDs in T2S basic custody service
(c) time period covered;
on a non-discriminatory basis;
(d) cost sharing mechanism;
(e) commit towards other CSDs in T2S to carry out their
central bank money settlement in T2S if the currency is
(e) the cost of capital.
available in T2S.
3. The
Governing
Council
shall
decide
on
the
T2S
financial 2. The
rules
in
relation
to
the
access
criteria
for
CSDs
are
laid
regime.
down in Decision ECB/2011/20 of 16 November 2011
establishing detailed rules and procedures for implementing
Article 13
the eligibility criteria for central securities depositories to
Payments
access TARGET2-Securities services ( 1 ), and shall be imple
mented in the contractual agreements between the Eurosystem
1. There
shall
be
a
T2S
project
account
held
at
the
ECB
on central banks and the CSDs.
behalf of the Eurosystem. The T2S project account shall not
have a budgetary character but shall be used to collect and
3. The
ECB
shall
maintain
a
list
on
its
website
identifying
the
distribute all T2S cost-related pre-payments, instalments and
CSDs admitted to settle in T2S.
reimbursements as well as T2S usage fees.
Article 16
2. The
T2S
Board
shall
manage
the
T2S
project
account
on
the Eurosystem’s behalf. Subject to validation and acceptance of
Contractual relations with CSDs
the 4CB deliverables, the T2S Board shall approve the payment
of instalments to the 4CB, in accordance with an agreed
1. The
contracts
between
the
Eurosystem
central
banks
and
payment schedule approved by the Governing Council and set
CSDs, including the service level agreements, shall be fully
out in the Level 2-Level 3 agreement.
harmonised.
Article 14
2. The T2S Board, jointly with the Eurosystem central banks,
shall negotiate amendments to the contracts with CSDs.
The Eurosystem’s rights to T2S
1. The
T2S
business
application
shall
be
fully
owned
by
the 3. The
contracts
with
CSDs
and
amendments
thereto
shall
be
Eurosystem.
approved by the Governing Council and subsequently signed by
the Eurosystem central bank of the country where the seat of
2. To
this
end,
the
4CB
shall
grant
the
Eurosystem
licenses the CSD is located, or by the ECB for CSDs located outside the
regarding the intellectual property rights required to enable the
euro area, in either case acting in the name and on behalf of all
Eurosystem to provide the full range of T2S services to CSDs
Eurosystem central banks. In relation to Ireland, the contract
under the applicable rules and common service levels and on an
shall be signed by the Eurosystem central bank of the Member
equal basis. The 4CB shall indemnify the Eurosystem for any
State that has notified the securities settlement system in
infringement claims raised by third parties in relation to such
accordance with Article 10 of Directive 98/26/EC.
intellectual property rights.
Article 17
3. The
details
regarding
the
Eurosystem’s
rights
to
T2S
shall
be agreed between the 4CB and the T2S Board in the Level 2-
Compliance with regulatory requirements
Level 3 agreement. The rights of the authorities that have signed
1. The
T2S
Board
shall
aim
to
support
ongoing
compliance
a currency participation agreement as defined in Article 18 will
by CSDs with relevant legal, regulatory and oversight require
be laid down in such agreement.
ments.
SECTION IV
2. The T2S Board shall consider whether the ECB should
CENTRAL SECURITIES DEPOSITORIES
issue recommendations in order to foster legislative adaptations
to ensure equal access rights to the T2S services by CSDs, and
Article 15
make proposals relating thereto to the Governing Council.
CSD access criteria
SECTION V
1. CSDs
shall
be
eligible
for
access
to
T2S
services
provided
that they:
CURRENCIES OTHER THAN THE EURO
Article 18
(a) have been notified in accordance with Article 10 of
Directive 98/26/EC or, in the case of a CSD from a non-
Eligibility conditions for inclusion in T2S
EEA jurisdiction, they operate under a legal and regulatory
framework that is equivalent to that in force in the Union;
1. An
EEA
currency
other
than
the
euro
shall
be
eligible
for
use in T2S provided that the non-euro area NCB, other central
(b) have been positively assessed by the competent authorities
bank or other authority responsible for such currency enters
against the CESR/ESCB Recommendations for Securities
Settlement System;
( 1 ) OJ L 319, 2.12.2011, p. 117.

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into a currency participation agreement with the Eurosystem
SECTION VII
and that the Governing Council has approved the eligibility of
such currency.
FINAL PROVISIONS
Article 20
2. A
currency
other
than
an
EEA
currency
shall
be
eligible
Level 2-Level 3 agreement
for use in T2S provided that the Governing Council has
approved the eligibility of such currency, if:
1. Subject
to
this
Guideline,
a
Level
2-Level
3
agreement
shall provide for the additional details of the tasks and respon
sibilities of the 4CB, the T2S Board and the Eurosystem central
(a) the legal, regulatory and oversight framework applicable to
banks.
settlement in that currency provides substantially the same
2. The
Level
2-Level
3
agreement
and
draft
amendments
or a higher degree of legal certainty as that in force in the
thereto shall be submitted for endorsement by the Governing
Union;
Council and then signed by the Eurosystem and the 4CB.
Article 21
(b) the inclusion of such currency in T2S would have a positive
impact on the contribution of T2S to the Union securities
Dispute resolution
settlement market;
1. If
a
dispute
in
relation
to
a
matter
regulated
by
this
Guideline cannot be settled by agreement between the
affected parties, any affected party may submit the matter to
(c) the other central bank or other authority responsible for
the Governing Council for a decision.
such currency enters into a mutually satisfactory currency
participation agreement with the Eurosystem.
2. The
Level
2-Level
3
agreement
shall
provide
that
the
T2S
Board or the 4CB may bring any dispute arising out of the Level
2-Level 3 agreement to the Governing Council.
3. In accordance with the mandate of the T2S Board, non-
euro area NCBs and other central banks may be represented on
Article 22
the T2S Board.
Repeal
1. Guideline
ECB/2010/2
is
repealed.
SECTION VI
2. References
to
the
repealed
Guideline
shall
be
construed
as
T2S PROGRAMME DEVELOPMENT
references to this Guideline.
Article 19
Article 23
T2S Executive Summary Plan
Entry into force
1. On the basis of proposals made by the T2S Board, the
This Guideline shall enter into force two days after its adoption.
Governing Council shall assess, validate and accept amendments
to the T2S Executive Summary Plan.
Article 24
Addressees and implementing measures
2. The
T2S
Board
shall
establish
an
operational
plan
on
the This Guideline is addressed to all Eurosystem central banks.
basis of the T2S Executive Summary Plan. The operational plan
and updates thereto shall be published and communicated to
T2S stakeholders concerned.
Done at Frankfurt am Main, 18 July 2012.
3. If
there
is
a
serious
risk
that
a
milestone
in
the
T2S
For the Governing Council of the ECB
Executive Summary Plan will not be achieved, the T2S Board
shall promptly inform the Governing Council thereof, and
The President of the ECB
propose measures to reduce any delay in implementing T2S.
Mario DRAGHI

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ANNEX
T2S ADVISORY GROUP
MANDATE
1. Preamble and objectives
In line with the Treaty on the Functioning of the European Union and the Statute of the European System of Central
Banks and of the European Central Bank, the Eurosystem aims to offer its TARGET2- Securities (T2S) services to central
securities depositories (CSDs) and central banks in Europe. T2S services allow for the core, neutral and borderless
settlement of securities transactions on a delivery-versus-payment basis in central bank money. This is performed in a
single technical platform integrated with central banks’ real-time gross settlement systems for all participating currencies.
In view of the provision of T2S services, the Governing Council of the European Central Bank (ECB), as ultimate decision-
making body of the Eurosystem, established the T2S Advisory Group (AG) to ensure that T2S continues to meet the
needs of the market. The AG maintains its role as an advisory body to the Eurosystem for all T2S-related issues. It may
also advise the CSD Steering Group and the Non-euro Currencies Steering Group.
2. Responsibilities and tasks
The AG is responsible for:
— supporting the consistency of the T2S scope defining set of documents, in particular their full compliance with the
user requirements document,
— supporting the Eurosystem’s review and prioritisation of change requests to the T2S scope defining set of documents,
in line with the applicable procedures specified in the Schedules of the Framework Agreement (FA) on ‘Governance’
and ‘Change and Release Management’,
— supporting the Eurosystem in any adjustment to the pricing framework,
— continuing to foster the work on harmonisation in the field of securities settlement related to T2S and supporting
implementation efforts in the market,
— advising on decisions to be taken by the Governing Council, the T2S Board, the CSD Steering Group and the Non-
euro Currencies Steering Group which, in the view of the T2S Board, have implications for the T2S users,
— advising on practices and policies that contribute to an effective and cost efficient implementation of T2S in the post-
trading T2S environment,
— advising on operational issues,
— advising when disputes arise between the Eurosystem and one or more CSDs and/or between the Eurosystem and one
or more non-euro area national central banks (NCBs), in line with the dispute resolution procedures in the FA and the
Currency Participation Agreement (CPA).
Each individual full member of the AG may:
— propose advice on T2S-related issues,
— initiate a change request in line with the procedure in the FA Schedule on ‘Change and Release Management’.
3. Composition and term
The AG is composed of the Chairperson, the Secretary, full members and observers.
The AG is chaired by the T2S Board Chairperson. The AG Secretary is a highly experienced ECB staff member and is
appointed by the AG Chairperson. The ECB provides the AG Secretary with operational and secretarial support. The AG
Chairperson may designate an alternate to replace the AG Secretary in exceptional circumstances.
A representative of any of the following groups is eligible to be a full AG member:
(a) Central banks:
The ECB and each of the NCBs of the Member States whose currency is the euro are represented by one full member.
When a Member State adopts the euro, its NCB will participate as a full AG member from the date of adoption of the
euro. A central bank outside the euro area that has signed the CPA and participates with immediate effect in T2S will

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also be represented by one full member from the date of the signature. A central bank representative will be
nominated by the Governor or President of the central bank concerned pursuant to the applicable central bank
statute;
(b) CSDs:
All full members of the CSD Steering Group are full members of the AG. As an exception and reflecting their share of
settlement volume, the Euroclear Group has four members, the Clearstream Group four and Monte Titoli two ( 1 ). This
composition is frozen for one year from the start of operation of T2S, following which the Governing Council will
revise the additional members to reflect the actual settlement volume in T2S;
(c) Users:
Both the User stakeholder group and the CSD group have the same number of members in the AG, so that market
T2S stakeholder groups are equally represented. The Governing Council nominates user representatives on the basis of
a proposal from the T2S Board. The T2S Board’s proposal is based on applications received from the European
Banking Federation, the European Savings Bank Group, the European Association of Cooperative Banks, the
Association for Financial Markets in Europe, and the European Association of Clearing Houses with a view to
balancing the different user interests in T2S, including small and large institutions and markets, domestic and
international players, and different scopes of services provided by users, focusing on users that have a significant
securities business in T2S, in euro or other currencies that are eligible for settlement in T2S, irrespective of their place
of incorporation. Each of these institutions shall have at least one of their applicants selected. In addition, the
following parameters apply:
(i) at least 11 full members represent major commercial banks;
(ii) at least two full members represent international investment banks;
(iii) at least two full members represent banks active in the securities settlement industry and serving their local
customers;
(iv) at least one full member represents a central counterparty.
The heads of the following institutions and organisations are each entitled to nominate one observer to the AG:
— the Association for Financial Markets in Europe,
— the European Association of Cooperative Banks,
— the European Banking Federation,
— the European Association of Clearing Houses,
— the European Savings Bank Group,
— the Federation of European Securities Exchanges,
— the European Securities and Markets Authority,
— the European Commission,
— the Eurosystem oversight function,
— one representative of each of the 4CB (these representatives shall present their view to the AG in a uniform way).
In addition, T2S Board members are invited to the AG meetings as observers.
Each nominee shall have the appropriate level of seniority and relevant technical expertise. The nominating entities shall
ensure that a nominee has sufficient time available to be actively involved in the AG’s work.
To limit the size of the AG, no more than two full members or observers originating from a single central bank may
attend the AG at the same time. The AG Chairperson is exempted from this rule in order to allow for sufficient neutrality.
The full members and the observers are nominated for a renewable term of two years. Replacements of user members
who resign during a regular term can be nominated by the T2S Board based on applications received from the relevant
user organisation. The AG mandate starts in July 2012, replacing the mandate and the rules of procedure of the AG
initially drafted for the specification phase and extended until the FA enters into force. The new mandate expires with the
replacement of the FA and the CPA with a new agreement and/or with the termination of the FA and CPA by the
signatories.
( 1 ) This composition is specified under the assumption that the Euroclear Group participates with Euroclear Belgium, Euroclear Finland,
Euroclear France and Euroclear Nederland and the Clearstream Group participates with Clearstream Banking Frankfurt and with
LuxCSD in T2S.

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4. Reporting
The AG provides advice to the T2S Board. Upon request, the AG may also advise the CSD Steering Group or the Non-
euro Currencies Steering Group. In exceptional cases, the AG may provide advice directly to the Governing Council if the
AG considers that the General Principles of T2S or other core elements of T2S are at risk.
The Governing Council and the T2S Board (for issues delegated by the Governing Council to the T2S Board) may provide
general guidance to the AG, either on their own initiative or upon request.
5. Working procedures
Full members are entitled to take part in AG decision-making. Observers are entitled to participate in AG meetings, but
do not participate in its decision-making process.
Decisions of the AG take the form of advice or of resolutions concerning the organisation of the AG work or the work of
the sub-groups. The AG’s advice is sent directly to the T2S Board, the Governing Council, the CSD Steering Group or the
Non-euro Currencies Steering Group, as the case may be. The AG’s advice and resolutions should be adopted by way of
consensus. Where consensus cannot be reached, the AG Chairperson may decide to assess the degree of support for a
specific decision, in which case their advice or resolutions are adopted by simple majority of the full members of the AG.
The AG Chairperson and Secretary are not entitled to take part in the adoption of advice or resolutions.
The AG may establish sub-structures to support its work if considered necessary. It coordinates with the T2S Board who
organises the work so that all relevant governance bodies are properly involved without duplicating sub-structures on
similar topics.
As a rule, the AG meets at least twice a year. Additional meetings may be called by the AG Chairperson, the dates of
which are to be communicated sufficiently in advance to the AG. In principle, meetings take place at the ECB’s premises.
In addition, the AG Chairperson may invite the AG to provide its advice via other means, such as written procedures.
The AG works in an open and transparent manner and AG documentation is published on T2S’s website. Detailed
working procedures are to be specified in the ‘Rules of Procedure’ drafted by the AG and endorsed by the T2S Board.
NATIONAL USER GROUPS
MANDATE
1. Objectives
The National User Groups (NUGs) bring together providers and users of securities settlement services within their national
markets in order to support the development, implementation and operation of TARGET2-Securities (T2S). They create
fora for involving national market participants in the T2S Advisory Group’s (AG) work and establish the formal link
between the AG and the national markets. They act both as a sounding board for the T2S Programme Office and as
providers of input to the AG in relation to all matters considered by the AG. As such, they may also suggest issues for
AG consideration.
The NUGs may be involved in the change and release management process and can play an important role in assessing
such requests in the context of the operation of the national markets. The NUGs should adopt the T2S principle of
seeking to avoid incorporating national specificities in T2S, and should actively promote harmonisation.
2. Responsibilities and tasks
The NUGs in markets participating in T2S are responsible for:
— assessing the impact of the T2S functionality, and in particular any changes in the T2S user requirements, on their
national market; when doing so, due consideration should be given to the concept of a ‘lean T2S’ that aims at
avoiding national specificities and at promoting harmonisation,
— contributing to the monitoring and implementation tasks associated with the T2S harmonisation activities supported
by the AG,
— bringing material concerns of the national market to the attention of the AG,
— raising the awareness of T2S in all segments of the national securities community,
— supporting the AG members representing the national community.

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While fulfilling their responsibilities, the NUGs shall adhere to the high standards of transparency that are a key element
of T2S.
Although the focus of this mandate is on markets participating in T2S, also markets not yet participating in T2S are
welcome to establish NUGs. If such market decides to establish an NUG, it shall follow a similar mandate in order to
prepare its market for participation in T2S.
3. Composition and term
The NUGs comprise a Chairperson, Secretary and members.
The Chairperson of an NUG should preferably be a full member or observer of the AG. This role will typically be
performed by a senior official of the relevant national central bank. In the case where the relevant national central bank
does not provide or designate the chairperson of the NUG, the chairperson will be nominated by the AG Chairperson
who will look for consensus amongst the main participants in the relevant market. Should the Chairperson not be a
member of the AG, an AG member should coordinate between the AG and the NUG Chairperson to ensure a close link
between the AG and the NUG. Should no member of an NUG be represented in the AG, the NUG shall seek close
cooperation with the AG Secretary in order to be informed about T2S developments.
The secretary of an NUG is provided by the relevant national central bank in euro area countries; in other countries the
NUG Secretary is appointed by the NUG Chairperson and should ideally be provided by the respective national central
bank. The secretary is expected to attend regular briefings organised for NUG secretaries by the T2S Programme Office via
the NUG experts network. The NUG secretaries of markets that do not participate in T2S may participate as guests in the
NUG experts network.
The members of an NUG comprise the relevant AG members and observers (or their nominated senior representatives,
acceptable to the NUG Chairperson) and additional persons with the knowledge and standing to be broadly representative
of all categories of users and providers in the national market, including experts on cash matters. NUG members may
thus include CSDs, brokers, banks, investment banks, custodians, issuers and/or their agents, central counterparties,
exchanges and multilateral trading facilities, the relevant national central bank, regulatory authorities and the relevant
banking associations.
The NUGs’ mandate expires at the same time as the mandate of the AG, i.e. with the replacement of the Framework
Agreement and the Currency Participation Agreement with a new contract and/or with the termination of the Framework
Agreement and Currency Participation Agreement with all signing CSDs and non-euro area central banks.
4. Working procedures
NUGs only deal with issues relevant to T2S. They are invited to actively seek briefing from the T2S Programme Office in
relation to live issues, and provide national views in a timely fashion on matters requested by the AG Secretary or raised
by the NUG. The T2S Programme Office regularly provides information to the NUGs on markets participating in T2S and
organises meetings with such NUG secretaries via the NUG experts network to foster the interaction between the NUGs
and the T2S Programme Office.
The NUGs will endeavour to have regular meetings aligned with the schedule of AG meetings, so that they can offer
advice to national AG members. However, no AG member is bound by any such advice. NUGs may also make written
submissions to the AG via the AG Secretary and invite an AG member to present its view.
The NUG Secretary aims at circulating an agenda and relevant documents for discussion at an NUG meeting at least five
business days ahead of the meeting. A summary of an NUG’s meeting will be published on the T2S website and, if
deemed appropriate, on the website of the respective NCB. The publication should ideally be made in English and, if
required, in the relevant national language within three weeks after each NUG meeting.
The members of the NUGs will be published on the T2S website. The NUGs will also publish an NUG-contact e-mail
address on the T2S website, so that participants in national markets know whom to contact to express their views.

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