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the settlement model is integrated for fast, low-risk and efficient settlement.įor each transaction, settlement instructions from the CSD and the central bank are matched by T2S when they enter the system. These accounts live side by side on the common platform – i.e. If you are a market participant and you want to settle securities transactions using the T2S platform, you need a securities account with one of the central securities depositories (CSDs) connected to T2S and a dedicated cash account with one of the central banks connected to the platform. reducing settlement risk and increasing financial stability by using central bank money for transactions on the platform.pooling collateral and liquidity, meaning that banks no longer need to keep these in various locations and can quickly move them to where they are needed.clearing and settlement services) in Europe increasing competition among providers of post-trade services (i.e.reducing the cost of cross-border securities settlement.making it easier for investors to buy securities in other EU countries.T2S lays the foundations for a single market for securities settlement and thus contributes to achieving greater integration of Europe’s financial market. As a result, transaction risk is greatly reduced. Currently 20 European countries use T2S.īanks pay for securities on the platform using the account they have with their central bank, so the money used to settle transactions is central bank money. Instead with T2S we have a common platform on which securities and cash can be transferred between investors across Europe, using harmonised rules and practices. T2S revolutionised securities settlement in Europe because it brought an end to complex cross-border settlement procedures and the problems caused by different settlement practices among countries. Safer and more efficient securities settlement

where delivery versus payment is possible. TARGET2-Securities, or T2S, is a safe platform where the exchange can happen simultaneously, i.e. When investors buy and sell securities the security and payment need to change hands – a process called securities settlement.