T2 User Group11/03/2016

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T2 UG - Agenda

► TARGET2 Consultations● Release 11● Eurosystem vision for the future RTGS services● Website, MT900 and reports

► Migration T2S● Standing orders● ESES testing● Billing

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T2 UG - Agenda

► Miscellaneous● Monitoring of Banking Groups● SWIFT cold start● Contingency module● AOB

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TARGET2Consultations

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Release 11

► Go-live 20 November 2017► First user consultation on Change Requests

● Originally ISO20022● Limited resources due to T2S● Instant payments short term● Vision 2020

► Second user consultation● September 2016

► Communication on release content● 31 October 2016

► Start user testing● 21 Augustus 2017

► New CRs BE: deadline 16 March

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Eurosystem’s Vision 2020

► Three main pillars● Explore synergies between TARGET2 and T2S● Development of a pan-European instant payments

solution● Possibility of harmonising Eurosystem collateral

management arrangements and making themobilisation more efficient

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Eurosystem’s Vision 2020

• The Eurosystem ‘s vision• Analyses the benefits of further integrating and

harmonising cash and securities services• Assesses the future need for the current services• Identifies potential new services• Elaborates upon the modernisation of the market

infrastructure

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RTGS services - Consultative report

► Consultation only related to Synergies betweenT2 and T2S

► Audiance● TARGET2 particpants● Other Banks● Ancillary systems

► Deadline 4 April 2016● Mail to TARGET2 helpdesk

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RTGS services - Consultative reportTechnologic opportunities

► Migration to ISO20022● In cooperation with banking community

► Network agnostic● Multiple network providers● Internet access still under discussion

Cyber security requirements Access for small to medium-sized participants

► Security and cyber resilience

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RTGS services - Consultative reportTechnologic opportunities

► Single gateway● Technical layer between NSP and Market

infrastructure► Openness to new technologies

● Blockchain● Distributed ledger

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RTGS services - Consultative reportFunctional Opportunities

► Harmonised interfaces● ICM and T2S GUI

► Multi-currency services● NCBs that have not yet adopted the euro

► Remittance and other key payment data► Accounts management

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RTGS services - Consultative reportBusiness opportunities

► Assessment of the current services● Still needed

► Liquidity management tools► Opening hours

● 24/7/365● Daytime and night-time

► Data analysis► Regulatory compliance► Settlement of ancillary systems

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Website, MT900 and reports

► Website● A diversity of answers● Eurosystem will make a proposal

► MT900● DCA will be added for current and standing orders● In field 72

► Reports and statistics● No real interest● Service will not be developped

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Migration ToT2S

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Migration T2S wave 2 to production► Migrating system entities:

● NBB-SSS● Interbolsa● PT-CB● BE-CB

► Easter weekend 24-29/03/2016► Full migration NBB as CB:

● System entity● RTGS system owner● Collateral manager● Settlement agent

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Settlement Banks linked to NBB-SSS► NBB-SSS stops using the ancillary system

interface of T2:● After final EOD sweep Ramses dd 24/03 (16:20)● NBBEBEBBMAC may not be used anymore as

mirror account but remains active as fall back scenario No DLNS created Any payment or current order in favour of mirror account

will be re-transferred manually by NBB

● Standing orders should be set to zero DD 24/03

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Settlement Banks linked to NBB-SSS► DCA holders:

● Target2 VAS active as from Monday 21/03 Visibility via RTGS account on linked DCA’s Restriction on DCA’s NO standing orders to be defined yet

● Standing orders to be defined by RTGS account holders: on 24/03 during the business hours

● NBB to send out mail to all DCA holders: contact persons for information on standing orders Amounts (possibility ‘act on behalf’ by BE-CB) DCA holders to contact liquidity provider (SBA)

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Liquidity injection during migration WE ● Cut-off standing order setup in T2 : 18:00

● RTGS accounts debited in T2 : At start night time window T2: 19:30 Liquidity remains ‘in the cloud’ between T2 & T2S

● Restrictions on DCA lifted by 4CB: 22:00 Liquidity injected in T2S Monitoring by NBB on execution transfers

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Participation BE-CB in T2S wave 3► NBB will act as supporting CB► Mig2 environment:

● Static data added to Wave2 configuration: Additional DCA’s Modifications due to cash services offered by EBE Collateral receiving accounts BX in Euroclear France

● Migration weekend dress rehearsal 11-14/03/2016● Standing orders to be defined/modified in T2 Cust

► Migration weekend to set up pre-production:● Weekend 4-5/July 2016● BE-CB will communicate on the use of the LTU

► Production launch 10-11/ September 2016

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Billing

► As from 04/2016 NBB sends 2 monthlyinvoices to PM Account holders● INVOICE T2

Normal invoice T2+ VAS T2S (50eur (option A) or 625eur (option B))+ 250eur / linked DCA

● INVOICE T2Sfor liquidity transfers and queries in T2S(see next table)

► CSD sends invoice for transactions on T2S

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Billing

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Billing

► Amounts of both invoices (T2 and T2S) will bedirectly debited on the PM account

► In case of multiple DCAs : amounts on T2S invoice are globalised by PM account

If more details needed : ad-hoc report : has to be requested and tested

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Miscellaneous

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Monitoring Banking groups

► Banking group: definition of T2 Guideline

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Monitoring Banking groups

► New screen for liquidity monitoring● Third variant of the existing liquidity pooling

services (virtual and consolidated accounts)● Aggregated view on international banking groups● View on individual accounts group● Only available for NCBs● To be used in a crisis situation

► New static data forms● Form 1019 (mandatory for all T2 participants)● Form 1020 (optional)

► Go live in June 2016

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SWIFT Cold Start

► In the extreme situation when all operating centres(OPCs) are unavailable, SWIFT will restore its services from an empty or zeroised state (so-called cold start) in its disaster recovery infrastructure for all customers.

► SWIFT's messaging services will be unavailable for all customers until the global cold start recovery procedure is completed

► Annual tests are organised by SWIFT since march 2006 - This year : 23 - 24 / April 2016

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TARGET2 and SWIFT Cold Start

► TARGET2 participates in cold start exercises► Participants can send messages to TARGET2 during

the exercise► TARGET2 responds to messages received up until the

moment of the start of the Cold start exercise► Messages sent after the start of the Cold start should

be reconciled by the participant and unprocessed messages resent

► Y copy notification messages might be lost and it is not possible to “resend” them

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Participation to Cold Start► Benefits of participating

● SWIFT users familiarise themselves with the process ● Test can be used to practice reconciliation procedures● Communication procedures verified and tested

► Benefits for TARGET2 users● TARGET2 has features that might make the reconciliation

process superfluous: Messages status can be checked via ICM (U2A/A2A) Messages can be easily resent

- TARGET2 double entry check prevents double settlement

● Communication procedure among the banks , CBs and SSP might be tested

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Participation to Cold Start

► Participation to be confirmed via SWIFT E-ordering

► before 31/3/2016► NBB will participate

► Inform NBB about participation► Procedures, test scenario’s and contact

persons will be shared among participants

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Liquidity Contingency Module (CM)

► TARGET2 unavailable► No Liquidity and No Credit line► (Very)-critical payments► Currently liquidity from

● DLNS of NBB-SSS● Liquidty of ESES-BE● Freezing (not activated)

► Migration to T2S● DLNS and liquidity ESES-BE will no longer be

usable

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Freezing of Collateral

Permanent Freezing of Collateral at NBB. Collateral in the Monetary Policy pool can be used.

Freezings are changed on request of the Counterparty. Increase of Freezing is subject to sufficient Collateral. Decrease of the Freezing is done only after validation by T2-operators.

Revaluation of Collateral can cause Margin Calls.

Freezings can be consulted via WIROW.

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Short Term vs. Long Term Solution

Changes of the Freezing communicated …

… by fax → Short Term

… by SWIFT-message → Long Term

Messages (faxes and SWIFT) are treatedbetween 08u00 and 17u00

Contact: backoffice@nbb.be

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Liquidity Contingency Module (CM)

► Memorandum● No changes

► Annex Memorandum with procedures● New annex will follow● Test before go-live T2S