The nature of the TARGET T2/T2S Consolidation Project, mainly related to the need for a Big Bang Approach, means that the migration preparation process for all participants becomes essential. If participants are not ready to migrate on the Go Live of the T2-T2S Consolidation Project, they may, among other consequences, be unable to pay or be paid in central bank money, be cut-off from access via an Ancillary System or need to access Payment Services through another counterparty (become an indirect member rather than a direct member). Even indirect participants will need to adjust IT applications to new SWIFT format, as required by their custodian or SWIFT gateway vendor.

TARGET stands for Trans-European Automated Real-time Gross Settlement Express Transfer and covers all dealing with central bank money for EUR. The TARGET platform allows financial institutions to settle in central bank money and the European Central Bank to conduct monetary policy and includes additional services

• T2S – Securities Settlement System to settle the payment leg of a security trade against EUR or DKK
• TIPS – Instant Payment System in EUR

The aim of the T2/T2S Consolidation is to provide a more streamlined and technical updated solution across all services, which shall include shared functions to connect to all services, manage liquidity, maintain static data and provide shared admin services.

• New Real Time Gross Settlement (RTGS) system with direct liquidity transfer between Dedicated Cash Accounts for the different services including enhanced services and extendable to multiple currencies.
• Central Storage and Management for all reference data in TARGET systems to optimize and ease static data management by avoiding redundant data and inconsistencies across the different services and providing a single user interface to access and manage reference data and create queries.
• New single gateway to the all TARGET service to allow multi-vendor connectivity with standardized messaging (ISO20022) in compliance with updated Information Security and Cyber Resilience Requirements.
• Central Liquidity Management system for all TARGET services providing a consolidated overview of accounts for management and calculation of required liquidity reserve as well as functionality to allow automated liquidity transfers between accounts and reservation of liquidity to certain purposes.
• Shared administrative functions to manage system events, batch runs and query processing as well as billing service.
• New Data Warehouse for the new RTGS and T2S with access for participants to define and query reports on a T+1 base.

All services will change to use the new ISO20022 standard message format, which is currently used in T2S. In addition, all ancillary systems connecting to the TARGET platform must go through the new ESMIG gateway, which will be the single access point to TARGET for all services. Connectivity test to TARGET will start in September 2021. Deadline for internal development and connectivity is 31st August 2021.

The new TARGET platform has a central storage system for static data; Central Reference Data Management (CRDM) system. The CRDM system requires a full migration from all services. The account model changes from the consolidation as well as other static data changes will mean that the migration is not just a simple 1:1 movement of existing data. The setup will require adaption to the new concepts of the platform and must be re-defined. The final migration shall be completed over the same weekend for all participants. Hence, there will be 2-3 mandatory dress-rehearsals and the participants will be required to use a migration tool. Final deadline for migration readiness is 31st October 2022.

To allow participants to migrate to the new TARGET platform, they must pass mandatory TARGET User Certification tests covering all functions and services of the platform, consisting of 5 separate time boxed test phases with mandatory exit criteria. Final deadline for user test completion is 30st September 2022.

The Central Liquidity Management system for all TARGET services includes a bunch of new functionalities, which can automate and optimize liquidity management. This includes:

• Definition of Liquidity Transfer (LT) Groups across different bank entities and central banks
• Event triggered standing orders for automatic liquidity transfer within LT Groups
• Liquidity reservations for Central Bank operation or high priority payments
• multilateral or bilateral party payment limit setup
• consolidation of all overnight interest rate debits/credits

These functions can be leveraged through the CLM application or setup in CRDM.

The new Data Warehouse stores data from both the RTGS and T2S and will be accessible for TARGET participants. Users can query data through predefined reports with a data granularity as detailed as transaction/account/participant level. This will allow participants to use this data for internal analyses.

The shared reference data, connectivity, liquidity management, scheduler and billing for the TARGET services will make the use of further services much cheaper for participants. Furthermore, the LT Groups and ability to create user access groups can make the outsourcing of services possible to other participants or offering services on behalf of other financial institutions.