TARGET2-Securities (T2S) / VP Securities

TARGET2-Securities (T2S)

VP joined TARGET2-Securities (T2S) on 12 September 2016 which is a new pan-European securities clearing- & settlement system owned by the European Central Bank (ECB). Currently, VP has joined T2S for settlement in euro, however when the Central Bank of Denmark makes Danish kroner available in T2S, VP settles both euro and Danish kroner in T2S. VP has also joined T2S with its subsidiary VP LUX, which operates as a Central Securities Depository (CSD) in Luxemburg. CSD’s from 22 European countries have already signed up, and thus covers the majority of the European market.

The video is made by The European Central Bank (ECB).

Benefits for the market

  • Access to a pan-European investor market ensures efficient funding for the benefit of businesses and borrowers. 
  • Efficient and cheap settlement of European securities across national borders and infrastructures. 
  • Cheaper safekeeping of European securities at VP using the same infrastructure and service as is standard with Danish securities
  • Reduction of risk by settlement in Central Bank money. 
  • Reduced liquidity costs by netting across markets

Read more

VP has decided to connect to TARGET2-Securities (T2S) in two phases. Firstly, with securities settlements in EUR in 2016 and later in DKK from 29 October 2018. This two-tier approach is being used to give the market the time required to implement technical and operational adaptations.

The settlement of securities in DKK in 2018 assumes that the Danish National Bank chooses to make Danish kroner available for this, something the Danish National Bank has already indicated.

VP has, in partnership with the Danish National Bank and representatives of the banks, been actively involved in the preparations for T2S since its inception in 2006. VP has thus been represented in the ECB AMi-SeCo and a number of working groups under its auspices.

The technical solution itself is being developed by 4CB, which consist of the German, Italian, French and Spanish central banks. VP will handle the required technical adaptations in the Danish market. It is VP’s objective to limit the adaptation costs for the Danish market as much as possible.

Read more about the VP's reflections on T2S challenges and opportunities in T2S OnLine.