TARGET2-Securities, in shorthand T2S, is the

Eurosystem The Eurosystem is the monetary authority of the eurozone, the collective of European Union member states that have adopted the euro as their sole official currency. The European Central Bank (ECB) has, under Article 16 of its Statute,

's platform for

securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...

settlement in central bank money. T2S offers centralised delivery-versus-payment (DvP) settlement across several European securities markets, without being itself a

central securities depository A central securities depository (CSD) is a specialized financial market infrastructure organization holding securities such as shares or bonds, either in certificated or uncertificated ( dematerialized) form, allowing ownership to be easily tra ...

(CSD) since it does not offer CSD services such as custody or asset servicing. T2S is one of the Eurosystem's

TARGET Services TARGET Services (for Transeuropean Automated Real-time Gross-settlement Express Transfer) are payment services operated by the Eurosystem for the euro area and beyond on its proprietary financial market infrastructures. As of late 2024, TARGET Ser ...

, together with T2 and TARGET Instant Payment Settlement (TIPS) for cash payments.

Background

Historically, financial market infrastructures in Europe were created to meet the requirements of national financial markets. In most cases, there were one or two dominant players at each stage of the value chain: typically one

stock exchange A stock exchange, securities exchange, or bourse is an exchange where stockbrokers and traders can buy and sell securities, such as shares of stock, bonds and other financial instruments. Stock exchanges may also provide facilities for ...

for trading, one central counterparty (CCP) for clearing and at least one CSD for settlement. Furthermore, these national infrastructures were primarily designed to manage securities denominated in the national currency. Securities settlement across Europe thus remained costly and cumbersome. Despite the introduction of the euro in 1999, the provision of post-trading services (i.e., clearing and settlement) remained heavily fragmented along national lines. For example, there were still 19 CSDs operating in the euro area in 2009 and almost 40 in the 27 countries of the EU. This situation was viewed as encouraging each country's financial market to remain domestically oriented, thus being detrimental to the aim of market integration. Investors continued to invest mostly in domestic securities, and as a result, the euro-area financial market could not fully benefit from the risk diversification and

competition Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indi ...

benefits that arise from having a single currency. These barriers which provoke a considerable competitive disadvantage for European capital markets were identified in a report by the Giovannini Group led by Alberto Giovannini in 2003."Second Report on EU Clearing and Settlement Arrangements"
The Giovannini Group, June 2003."Payments, Securities and Derivatives, and the Role of the Eurosystem"
European Central Bank, 2010. Some initiatives by the

European Commission The European Commission (EC) is the primary Executive (government), executive arm of the European Union (EU). It operates as a cabinet government, with a number of European Commissioner, members of the Commission (directorial system, informall ...

to remove impediments to competition between national markets have included the

Markets in Financial Instruments Directive Markets in Financial Instruments Directive 20142014/65/EU commonly known as MiFID 2), is a directive of the European Union (EU). Together with Regulation No 600/2014 it provides a legal framework for securities markets, investment intermediari ...

(MiFID), the European Market Infrastructure Regulation (EMIR) and the Central Securities Depositories Regulation (CSDR). T2S as a pan-European platform was intended to complement these existing initiatives by boosting competition, increasing price transparency, and harmonising practices across Europe.

History

The ECB first announced it was "evaluating opportunities" for a TARGET2-Securities settlement services on . After market consultations and a decision by the Governing Council of the

European Central Bank The European Central Bank (ECB) is the central component of the Eurosystem and the European System of Central Banks (ESCB) as well as one of seven institutions of the European Union. It is one of the world's Big Four (banking)#International ...

(ECB), the project was launched in 2008 and the platform started operations on . The development and operation of T2S was assigned to four

central bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...

s of the

—those of

France France, officially the French Republic, is a country located primarily in Western Europe. Overseas France, Its overseas regions and territories include French Guiana in South America, Saint Pierre and Miquelon in the Atlantic Ocean#North Atlan ...

Germany Germany, officially the Federal Republic of Germany, is a country in Central Europe. It lies between the Baltic Sea and the North Sea to the north and the Alps to the south. Its sixteen States of Germany, constituent states have a total popu ...

Italy Italy, officially the Italian Republic, is a country in Southern Europe, Southern and Western Europe, Western Europe. It consists of Italian Peninsula, a peninsula that extends into the Mediterranean Sea, with the Alps on its northern land b ...

, and

Spain Spain, or the Kingdom of Spain, is a country in Southern Europe, Southern and Western Europe with territories in North Africa. Featuring the Punta de Tarifa, southernmost point of continental Europe, it is the largest country in Southern Eur ...

, with the ECB providing project coordination. The T2S Framework Agreement, negotiated between CSDs and the

, has been signed by 24 CSDs, of which 19 migrated to the T2S platform in four waves between June 2015 and February 2017. These were, in alphabetical order of countries: OeKB CSD (Austria),

Euroclear Belgium Euroclear Belgium is one of three central securities depositories (CSDs) in Belgium, together with Euroclear Bank and NBB-SSS. It is the main CSD for Belgian securities other than government bonds. Both Euroclear Belgium and Euroclear Bank are fu ...

and NBB-SSS (Belgium), VP Securities (Denmark), Nasdaq CSD (Estonia, Latvia, Lithuania), Euroclear France, Clearstream Banking AG (Germany),

BOGS A bog or bogland is a wetland that accumulates peat as a deposit of dead plant materials often mosses, typically sphagnum moss. It is one of the four main Wetland#Types, types of wetlands. Other names for bogs include mire, mosses, quagm ...

(Greece), KELER CSD (Hungary),

Monte Titoli Euronext Securities is the central securities depository (CSD) arm of Euronext. It has been formed from the successive acquisitions by Euronext of the national CSDs in Portugal, Norway, Denmark, and Italy. The change of the four entities' respectiv ...

(Italy), LuxCSD (Luxembourg), Malta Stock Exchange (Malta), Euroclear Nederland, Interbolsa (Portugal), Depozitarul Central (Romania), CDCP (Slovakia), KDD (Slovenia), Iberclear (Spain) as well as SIX SIS (Switzerland). In addition, the Danish RTGS Kronos2 was connected to T2S on , allowing T2S to settle the cash leg of a securities transaction in

Danish krone The krone (; plural: ''kroner''; sign: kr.; code: DKK) is the official currency of Denmark, Greenland, and the Faroe Islands, introduced on 1 January 1875. Both the ISO code "DKK" and currency sign "kr." are in common use; the former precedes ...

s. In October, 2020, T2S and the associated ECB payments system TARGET2 experienced an outage for nearly 11 hours. Not long before, Euronext NV had also experienced outages. On , five more CSDs connected to T2S, namely

Euroclear Bank Euroclear Bank is the international central securities depository (ICSD) of the Euroclear Group, based in Brussels, Belgium. It is one of the world's two main ICSDs, the other one being Clearstream Banking SA in Luxembourg. As of 2018, it was t ...

(Belgium), BNBGSSS and Central Depository AD (Bulgaria), SKDD (Croatia), and Euroclear Finland. By end-2023, there were 892 active Dedicated Cash Accounts (DCAs) for settlement in euro on the T2S platform.

Operations

Two types of accounts are located and maintained on the T2S platform: securities accounts provided by participating CSDs, and cash accounts in central bank money provided by participating central banks (i.e. National Central Banks of the Eurosystem and

Danmarks Nationalbank Danmarks Nationalbank (in Danish often simply ''Nationalbanken'') is the central bank of the Danish Realm, Kingdom of Denmark. It is a non-eurozone member of the European System of Central Banks (ESCB). Since its establishment in 1818, the objecti ...

). Thus, T2S embeds contractual relationships between central banks and individual CSDs, but not with the latter's clients who are the beneficial owners of the securities. As of 2024, industry participants estimated that some T2S account maintenance functionalities had been maintained in parallel by participating CSDs, generating redundancy of processes, risks and unnecessary costs. Even so, the same source assessed that T2S had significantly contributed to market practice harmonization.

Central Securities Depositories

As of late 2024, 24 CSDs were connected to T2S, of which 22 national CSDs (counting the three

Baltic countries The Baltic states or the Baltic countries is a geopolitical term encompassing Estonia, Latvia, and Lithuania. All three countries are members of NATO, the European Union, the Eurozone, and the OECD. The three sovereign states on the eastern co ...

as one CSD based in

Riga Riga ( ) is the capital, Primate city, primate, and List of cities and towns in Latvia, largest city of Latvia. Home to 591,882 inhabitants (as of 2025), the city accounts for a third of Latvia's total population. The population of Riga Planni ...

) and 2 international CSDs (ICSDs).

National CSDs

* OeKB CSD, fully-owned by Oesterreichische Kontrollbank *

, Euroclear Finland, Euroclear France and Euroclear Nederland, all fully-owned by Euroclear Group * NBB-SSS, part of the

National Bank of Belgium The National Bank of Belgium (NBB; , NBB; , BNB; , BNB) is the National central bank (Eurosystem), national central bank for Belgium within the Eurosystem. It was the Belgian central bank from 1850 until 1998, established by law of and issuin ...

* Bulgarian National Bank Government Securities Settlement System (BNBGSSS), part of the Bulgarian National Bank, and Central Depository AD (CDAD) * Central Depository & Clearing Company (SKDD) * Euronext Securities Copenhagen, Milan and Porto, fully-owned by Euronext Group * Nasdaq CSD, fully-owned by

Nasdaq, Inc. Nasdaq, Inc. is an American multinational financial services corporation that owns and operates three stock exchanges in the United States: the namesake Nasdaq stock exchange (on which it is also listed), the Philadelphia Stock Exchange, and ...

* Clearstream Banking AG, fully-owned by Deutsche Börse Group * Bank of Greece Securities Settlement System (BOGS), part of the

Bank of Greece The Bank of Greece ( , ) is the national central bank for Greece within the Eurosystem. It was the Greek central bank from 1927 to 2000, issuing the drachma. Since 2014, it has also been Greece's national competent authority within European ...

* KELER CSD, majority-owned by the

Hungarian National Bank The Hungarian National Bank ( , MNB) is the central bank of Hungary and as such part of the European System of Central Banks (ESCB). It was established in 1924 as a successor entity of the Austro-Hungarian Bank, under the economic assistance ...

* LuxCSD, fully-owned by Deutsche Börse Group * Malta Stock Exchange, fully state-owned * Depozitarul Central * CDCP SR, fully-owned by

Bratislava Stock Exchange Bratislava Stock Exchange ( Slovak: Burza cenných papierov v Bratislave, abbr. BSSE, BCPB) is a Stock Exchange in Bratislava, that began its existence on 15 March 1991 according to adjudication of Ministry of Finance of Slovakia in 1990. BSSE is ...

* KDD Central Securities Clearing Corporation * Iberclear, fully-owned by BME Group

International CSDs

* SIX SIS EU-based CSDs that were not connected to T2S as of early 2025 included the Cyprus Stock Exchange (CSE), CSD Prague (fully-owned by

Prague Stock Exchange Prague Stock Exchange (PSE; ) is the largest and oldest securities market organizer in the Czech Republic. It is a 99.54 percent-owned subsidiary of Wiener Börse AG. PSE and its subsidiaries comprise the PX group. In addition to the Stock Exch ...

), Hellenic Central Securities Depository (ATHEXCSD, part of Athens Stock Exchange), the Central Securities Depository of Poland (KDPW), and Euroclear Sweden. Uniquely in the EU, Ireland has no national CSD, and has been using Euroclear Bank for that purpose since 2021.

References

External links

T2S page on the ECB website

"T2S Framework Agreement
European Central Bank. 2011. Retrieved 24 June 2014.

Sources

* ttp://www.ecb.europa.eu/paym/t2s/progplan/history/html/index.en.html History of the T2S Projectbr>Fourth T2S Harmonisation Progress Report
European Central Bank. 19 March 2014. Retrieved 2 June 2014.
Financial Integration in Europe
European Central Bank. April 2014. Retrieved 2 June 2014.
T2S Benefits: Much More Than Fee Reductions
Ben Weller, European Central Bank. June 2012. Retrieved 17 June 2014.
Second Report on EU Clearing and Settlement Arrangements
The Giovannini Group. Brussels, April 2003. Retrieved 3 June 2014.
Payments, Securities and Derivatives, and the Role of the Eurosystem
European Central Bank. 2010. Retrieved 3 June 2014. {{DEFAULTSORT:T2s Banking European Union financial market policy Securities (finance) Stock market Central securities depositories of Europe Eurosystem