TARGET2-Securities (T2S) – SUMMARY OF THE PORTUGUESE NUG
MEETING
Place: Banco de Portugal (Room 0.2.3)
Date: 9th November 2012 - 10h30
Institutions:
Members:
Banco de Portugal:
Departamento de Sistemas de Pagamentos (DPG)
Jorge Egrejas Francisco
Pedro Marques
Fernando Chau
Nazaré Correia
Anabela Mendes
Ana Gomes
Lara Fernandes
João Sarilho
Fabio Michelli
Duarte Martins
Departamento de Mercados e Gestão de Reservas (DMR) –
SITEME
Comissão dos Mercados de Valores Mobiliários (CMVM)
Anabela Cardoso
INTERBOLSA
Marta Calado
Paula Pereira
Rui Matos
CGD
Ricardo Ribeiro
Banco Comercial Português
Luís Castanho Ferreira
Banco Santander Totta
Rita Roque
Banco Português de Investimento
Carlos Ferreira Machado
Banco Espírito Santo
Bruno Pinho
Deutsche Bank AG
Pedro Campos
Citibank International PLC, Sucursal em Portugal
Giselle Toloi
LCH.Clearnet SA
Ana Paula Carreira
SIBS FPS
Luís Sequeira
Miguel Maurício
Absent:
BNP Paribas
APB - Associação Portuguesa de Bancos
1. Current update of the T2S Programme by Banco de Portugal (cash issues):
presentation - Banco de Portugal
The meeting is part of the Portuguese market preparation in the development of the T2S
Programme.
In April and June of this year, 23 European CSD, representing almost all euro area
market, signed with the Eurosystem the T2S Framework Agreement. This is a major
achievement of the Programme since the last NUG-PT meeting. Hence, the T2S
Programme focus moved from specification and bargaining issues to implementation
phase, towards the go-live date set for 2015.
BdP emphasized the import of preparation work aimed at operationalizing connection to
the future T2S platform and the setting up of the appropriate “migration wave” for the
national market.
a. VAT regime on T2S services;
BdP informed the NUG-PT on the démarches undertaken in March 2011 (and a further
note in March 2012) to Tax authorities to consider T2S services in Portugal as “out of
scope” of VAT Directive (nº 1 of artº 13). The Ministry of Finance has not responded to
this proposal yet; according to information from Eurosystem, Tax authorities in several
European countries have replied, accepting that interpretation on demand from their
National Central Bank.
b. Synchronization Points 2 and 3 and preparation to connect to T2S;
Major developments of T2S technical working groups were presented: the Project
Managers Group (PMG), the Operations Managers Group (OMG) and the Change
Review Group (CRG). The work on Migration and Testing in T2S (under the
responsibility of two sub-groups of PMG) was updated and users testing are planned to
begin: 3º Quarter of 2014 for the 1st wave of migration participants; and 2nd Quarter of
2015 for those in the 2nd wave of migration. The tests will be coordinated with
TARGET2 as well as with CSD. Some issues related to the organization of tests and
their duration are being finalized and could be object, for some specific issues, of
market consultation with users.
i.
Directly connected participants, cash and securities;
The concepts of directly and indirectly connected participants to the T2S platform were
presented, for cash as well for securities. Physical connection to T2S can be through
Value Added Network (VAN), with 2 selected providers for these services (SWIFT and
SIA/Colt), or via Dedicated Link (DL), through the future CoreNet3 of Eurosystem.
ii.
Connection between TARGET2 - T2S;
TARGET2 is planning to provide 2 options for RTGS account cash management to be
implemented in release 7.0. In the first one, called Standard Offer, users messages are
compatible with ISO 20022 messages, so that they can instruct cash transfer from their
RTGS accounts to DCA accounts (associated with RTGS accounts) via XML messages.
In the second option, called Optional Offer, banks will be able to send MTxxx messages
to TARGET2, which will convert them to ISO 20022 format and resend them to T2S –
in this option, users can initiate cash transfer from their RTGS account to their DCA
account and vice-versa.
iii.
Autocolateralization from Central Bank.
This new T2S service/functionality aims at reducing trade failures due to participants
lack of cash. Main concepts and parameters of autocollateralization of Central Bank or
Payment Bank were provided, as well as autocolaterlization on flow e on stock. Two
examples were presented for autocolateralization: Central bank on flow and payment
bank on flow and on stock. In the former case, credit should be reimbursed by 15H30
(Portuguese time); if not, this credit will be, exceptionally, converted into intraday
credit and transferred to TARGET2 (in the respective RTGS account).
2. Current update of the T2S Programme Interbolsa: presentation – Interbolsa
a. Information on Migration Plan to T2S - Interbolsa
Interbolsa will present shortly the adaptation plan to T2S in the T2S Portuguese Market
Forum. Two scenarios of possible migration date of Interbolsa were presented; in any
scenario, Interbolsa would migrate in the same wave as ESES markets of Euroclear.
Concerning the connection to T2S platform, Interbolsa mentioned that it will use
SWIFT services (that is, aVAN).
b. Implications from tax changes
Participants considered important that tax changes on financial transactions (Financial
Transactions Tax) should reduce their negative impacts, namely through; i) preserving a
“level playing field” in european markets; ii) allowing time for the necessary adaptation
in institutions’ information systems; iii) easy to interpret (specially, on the tax incidence
– whether it is the financial intermediary or the final client that bears the tax burden).
Participants mentioned that there were not known research on the impact of financial
transaction tax on markets.
c. Synchronization Points 2 and 3; adaptation calendar
It is expected that the SP3 will be postponed to the 1º Quarter of 2013 as a result of the
need to; i) analyze the Change Requests considered as “showstoppers”; ii) the final
decision on migration were not adopted. It is necessary to research the impact of an
eventual delay of SP3 in T2S Plan.
d. Information on Gap Analysis of T2S Standards for Corporate Actions on
Flow
Interbolsa presented the results of the recent Gap Analysis of Corporate Actions
SubGroup (CASG). The results from this evaluation on the Portuguese market are
positive.
3. Activities of CSD Steering Group (CSG): presentation – Interbolsa
With the signing of the T2S Framework Agreement, the T2S governance changed as
agreed in the T2S FA. The Chair of CSG became to be elected from CSD. The current
Chair is Jésus Benito from Iberclear. CSG will meet again in 12 and 13 November to
find a consensos on the composition of migration waves as well as testing issues in T2S.
4. Activities of Project Managers Group (PMG): presentation - Banco de Portugal e
Interbolsa
The activities of this group were mentioned above.
5. Other business
The Chair thanked the participation and contribution of members, especially from
Interbolsa. The NUG-PT was informed that na informal group was set up between BdP
and Interbolsa for the operational issues associated with the implementation of T2S in
the Portuguese market.