T2-T2S consolidation: Announcement regarding ECB project on future Eurosystem market infrastructure services

1. Introduction

With this circular, Eurex Clearing provides information on the new European Central Bank (ECB) initiative regarding the future Eurosystem market infrastructure for TARGET services, scheduled for November 2021. For this initiative, ECB foresees a “big bang” go-live approach.

Following the TARGET2-TARGET2-Securities (T2-T2S) consolidation, Eurex Clearing envisages to maintain its set-up and processes with only a minimum of changes. Nevertheless, some functional changes will be applied by Eurex Clearing, as summarised under no. 3 below.

With the consolidation, Eurex Clearing will redesign the payment process used to instruct the debiting of overnight payments in euro to align with the new opening hours of the future TARGET service. Consequently, Eurex Clearing plans to bring forward the timeline for euro overnight debit cash instructions.

The migration process for the participants' T2/Real-Time Gross Settlement (RTGS) accounts to the new cash account infrastructure of the Eurosystem will be defined by the respective central banks at a later stage. As is currently the case, Eurex Clearing will require direct debit authorisations (power of attorney/debit mandate for AS settlement) for all relevant T2 accounts set up in the Eurex Clearing system.

The timeline for the initiative is as follows:

Start of simulation:  March 2021¹ - September 2021
Start of production:  22 November 2021

¹ Subject to adjustment according to ECB milestone planning

2. Required action

Please check whether you have registered and/or updated your release contacts for T2-T2S via the Member Section on the Eurex Clearing website www.eurexclearing.com, under "Release Contacts".

In parallel, please subscribe to Eurex Clearing circulars and newsflashes on our new subscription website under the following link in order to remain updated, as any communication regarding T2-T2S will only be distributed via circulars and newsflashes:

Find > Subscriptions > Circular & Newsletter Subscription

3. Details

a.    Overview of functional changes

The T2-T2S consolidation will have the following impact on Eurex Clearing’s euro payment infrastructure and related processes:

• Eurex Clearing will bring forward the overnight debit cash instructions in euro from 07:00 CET/CEST to 02:00 CET/CEST, whereas the deadline for fulfilment of the payment obligation remains at 08:00 CET/CEST. 
• The potential closing and reopening of cash accounts by the T2 participants as part of the migration (detailed migration process to be defined by the respective central banks) might require the renewal of certain forms. To ensure a smooth cash processing between Eurex Clearing and their customers’ T2 cash accounts, a PoA/debit mandate for AS settlement will continue to be required for every T2/RTGS DCA account set up in the Eurex Clearing system. More details on new PoAs/forms will be provided in the second half of 2020.
• Eurex Clearing will continue to make use of the Ancillary System (AS) settlement procedures offered by the Eurosystem. Based on current planning, Eurex Clearing intends to settle AS transactions in RTGS using AS settlement procedure E.

b.    Reports

• No changes to reports are foreseen due to the T2-T2S consolidation.

c.    Technical connection

• There will be a change to the A2A connection to ESMIG. However, no customer impact is foreseen.

Further information on T2-T2S-related topics will be provided by Eurex Clearing in due time dependent on ECB project progress.

Unless the context requires otherwise, terms used and not otherwise defined in this circular shall have the meaning ascribed to them in the Clearing Conditions or FCM Clearing Conditions of Eurex Clearing AG, as applicable.

Further information