Decision of the European Central Bank of 24 July 2007 concerning the terms and conditions of TARGET2-ECB (ECB/2007/7) (2007/601/EC)

[F1 TITLE I U.K. GENERAL PROVISIONS

Article 1 U.K. Definitions

For the purposes of these Terms and Conditions (hereinafter the ‘ Conditions ’ ), the following definitions apply:

• ‘ancillary system’ means a system managed by an entity that is subject to supervision and/or oversight by a competent authority and complies with the oversight requirements for the location of infrastructures offering services in euro, as amended from time to time and published on the ECB's website (1) , in which payments and/or financial instruments are exchanged and/or cleared or recorded with (a) the monetary obligations settled in TARGET2; and/or (b) funds held in TARGET2, in accordance with Guideline ECB/2012/27 (2) and a bilateral arrangement between the ancillary system and the relevant Eurosystem CB,

• ‘ authorised account user ’ means an entity which: (a) holds a Business Identifier Code (BIC); (b) is registered as such by a TIPS DCA holder; and (c) is addressable through the TIPS Platform for the settlement of instant payments,

• ‘ Business Identifier Code (BIC) ’ means a code as defined by ISO Standard No 9362,

• ‘ branch ’ means a branch within the meaning of point (17) of Article 4(1) of Regulation (EU) No 575/2013,

• ‘ business day ’ or ‘ TARGET2 business day ’ means any day on which TARGET2 is open for the settlement of payment orders, as set out in Appendix III,

• ‘ capacity opinion ’ means a participant-specific opinion that contains an assessment of a participant's legal capacity to enter into and carry out its obligations under these Conditions,

• ‘ central banks (CBs) ’ means the Eurosystem CBs and the connected NCBs,

• ‘ credit memorandum balance (CMB) ’ means a limit set by the TIPS DCA holder for the use of liquidity on the TIPS DCA by a specific reachable party,

• ‘ connected NCB ’ means a national central bank (NCB), other than a Eurosystem CB, which is connected to TARGET2 pursuant to a specific agreement,

• ‘ credit institution ’ means either: (a) a credit institution within the meaning of point (1) of Article 4(1) of Regulation (EU) No 575/2013 and Section 2(1) No 2 and Section 2(6) No 2 of the KWG that is subject to supervision by a competent authority; or (b) another credit institution within the meaning of Article 123(2) of the Treaty that is subject to scrutiny of a standard comparable to supervision by a competent authority,

• ‘ deposit facility ’ means a Eurosystem standing facility which counterparties may use to make overnight deposits with an NCB at a pre-specified deposit rate,

• ‘ deposit facility rate ’ means the interest rate applicable to the deposit facility,

• ‘ TIPS Dedicated Cash Account (TIPS DCA) ’ means an account held by a TIPS DCA holder, opened in TARGET2-ECB, and used for the provision of instant payment services to its customers,

• ‘ T2S Dedicated Cash Account (T2S DCA) ’ means an account held by a T2S DCA holder, opened in TARGET2-ECB, and used for cash payments in relation to securities settlement in T2S,

• ‘ euro area NCB ’ means the NCB of a Member State whose currency is the euro,

• ‘ Eurosystem CB ’ means the ECB or a euro area NCB,

• ‘ event of default ’ means any impending or existing event, the occurrence of which may threaten the performance by a participant of its obligations under these Conditions or any other rules applying to the relationship between that participant and the ECB or any other CB, including:

  (a)

  where the participant no longer meets the access criteria laid down in Article 5 or the requirements laid down in Article 6(1)(a)(i) or Article 6(1)(b)(iii);

  (b)

  the opening of insolvency proceedings in relation to the participant;

  (c)

  the submission of an application relating to the proceedings referred to in point (b);

  (d)

  the issue by the participant of a written declaration of its inability to pay all or any part of its debts or to meet its obligations arising in relation to intraday credit;

  (e)

  the entry of the participant into a voluntary general agreement or arrangement with its creditors;

  (f)

  where the participant is, or is deemed by its CB to be, insolvent or unable to pay its debts;

  (g)

  where the participant's credit balance on its TIPS DCA, PM account, or T2S DCA, or all or a substantial part of the participant's assets are subject to a freezing order, attachment, seizure or any other procedure that is intended to protect the public interest or the rights of the participant's creditors;

  (h)

  where participation of the participant in another TARGET2 component system and/or in an ancillary system has been suspended or terminated;

  (i)

  where any material representation or pre-contractual statement made by the participant or which is implied to have been made by the participant under the applicable law is incorrect or untrue;

  (j)

  the assignment of all or a substantial part of the participant's assets,

• ‘ Information and Control Module (ICM) ’ means the SSP module that allows TIPS DCA holders that also hold a Linked PM account to obtain online information and gives them the possibility to submit PM to TIPS DCA liquidity transfer orders and TIPS DCA to PM liquidity transfer orders, and to manage liquidity,

• ‘ TIPS GUI ’ means the module on the TIPS Platform which allows TIPS DCA holders to obtain online information and gives them the possibility to submit TIPS DCA to PM liquidity transfer orders,

• ‘ ICM broadcast message ’ means information made simultaneously available to all or a selected group of PM account holders via the ICM,

• ‘ reachable party ’ means an entity which: (a) holds a BIC; (b) is designated as such by a TIPS DCA holder; (c) is a correspondent, customer or branch of a TIPS DCA holder; and (d) is addressable through the TIPS Platform and is able to submit payment orders and receive payment orders either via the TIPS DCA holder or, if so authorised by the TIPS DCA holder, directly,

• ‘ instructing party ’ means an entity which has been designated as such by a TIPS DCA holder and which is allowed to send payment orders to the TIPS Platform and/or receive payment orders from the TIPS Platform on behalf of that TIPS DCA holder or a reachable party of that TIPS DCA holder,

• ‘insolvency proceedings’ means insolvency proceedings within the meaning of Article 2(j) of Directive 98/26/EC of the European Parliament and of the Council (3) ,

• ‘ PM to TIPS DCA liquidity transfer order ’ means the instruction to transfer a specified amount of funds from a PM account to a TIPS DCA,

• ‘ TIPS DCA to PM liquidity transfer order ’ means the instruction to transfer a specified amount of funds from a TIPS DCA to a PM account,

• ‘ marginal lending facility ’ means a Eurosystem standing facility which counterparties may use to receive overnight credit from a Eurosystem CB at the pre-specified marginal lending rate,

• ‘ Linked PM account ’ means the PM account with which a TIPS DCA is associated for the purpose of liquidity management and payment of TIPS fees,

• ‘ TIPS network service provider ’ means an undertaking which has: (a) met all of the necessary conditions to connect to, and established a technical connection to, the TIPS Platform in accordance with the rules and procedures set out and referred to in Appendix V; and (b) signed the TIPS connectivity hosting terms and conditions which are available on the ECB's website,

• ‘ participant ’ [or ‘ direct participant ’ ] means an entity that holds at least one TIPS DCA (TIPS DCA holder) and/or one PM account (PM account holder) and/or one T2S DCA (T2S DCA holder) with a Eurosystem CB,

• ‘ payee ’ , except where used in Article 30 of this Annex, means a TIPS DCA holder whose TIPS DCA will be credited as a result of a payment order being settled,

• ‘ payer ’ , except where used in Article 30 of this Annex, means a TIPS DCA holder whose TIPS DCA will be debited as a result of a payment order being settled,

• ‘ payment order ’ , except where used in Articles 16 to 18 of this Annex, means an instant payment order, a positive recall answer, a PM to TIPS DCA liquidity transfer order or a TIPS DCA to PM liquidity transfer order,

• ‘ instant payment order ’ means, in line with the European Payments Council's SEPA Instant Credit Transfer (SCT Inst) scheme, a payment instruction which can be executed 24 hours a day any calendar day of the year, with immediate or close to immediate processing and notification to the payer,

• ‘ recall request ’ means, in line with the SCT Inst scheme, a message from a TIPS DCA holder requesting reimbursement of a settled instant payment order,

• ‘ positive recall answer ’ means, in line with the SCT Inst scheme, a payment order initiated by the receiver of a recall request, in response to a recall request, for the benefit of the sender of that recall request,

• ‘ Single Shared Platform (SSP) ’ means the single technical platform infrastructure provided by the SSP-providing NCBs,

• ‘ TIPS Platform ’ means the single technical platform infrastructure provided by the TIPS Platform-providing NCBs,

• ‘ SSP-providing NCBs ’ means the Deutsche Bundesbank, the Banque de France and the Banca d'Italia in their capacity as the CBs building and operating the SSP for the Eurosystem's benefit,

• ‘ TIPS Platform-providing NCBs ’ means the Deutsche Bundesbank, the Banco de España, the Banque de France and the Banca d'Italia in their capacity as the CBs building and operating the TIPS Platform for the Eurosystem's benefit,

• ‘ TARGET Instant Payment Settlement (TIPS) service ’ means the settlement in central bank money of instant payment orders on the TIPS Platform,

• ‘ static data collection form ’ means a form developed by the ECB for the purpose of registering applicant TIPS DCA holders for TARGET2-ECB services and registering any changes in relation to the provision of such services,

• ‘ suspension ’ means the temporary freezing of the rights and obligations of a participant for a period of time to be determined by the ECB,

• ‘ TARGET2-ECB ’ means the TARGET2 component system of the ECB,

• ‘ TARGET2 ’ means the entirety resulting from all TARGET2 component systems of the CBs,

• ‘ TARGET2 component system ’ means any of the CBs' real-time gross settlement (RTGS) systems that form part of TARGET2,

• ‘ TARGET2 participant ’ means any participant in any TARGET2 component system,

• ‘ technical malfunction of TARGET2 ’ means any difficulty, defect or failure in the technical infrastructure and/or the computer systems used by TARGET2-ECB, or any other event that makes it impossible to execute payments in TARGET2-ECB,

• ‘ TIPS Distinguished Name (TIPS DN) ’ means the network address for the TIPS Platform which must be included in all messages intended for the system,

• ‘ User Detailed Functional Specifications (UDFS) ’ means the most up-to-date version of the UDFS, which is the technical documentation that details how a TIPS DCA holder interacts with TARGET2.

Article 2 U.K. Scope

The present Conditions govern the relationship between the ECB and its TIPS DCA holder as far as the opening and the operation of the TIPS DCA is concerned.

Article 3 U.K. Appendices

1. The following Appendices form an integral part of these Conditions:

• Appendix I: Parameters of the TIPS DCA — Technical specifications

• Appendix II: Terms of reference for capacity and country opinions

• Appendix III: Operating schedule

• Appendix IV: Fee schedule

• Appendix V: TIPS connectivity technical requirements

2. In the event of any conflict or inconsistency between the content of any appendix and the content of any other provision in these Conditions, the latter shall prevail.

Article 4 U.K. General description of TARGET2

1. TARGET2 provides real-time gross settlement for payments in euro, with settlement in central bank money across PM accounts, T2S DCAs for the purpose of securities transactions and TIPS DCAs for the purpose of instant payments.

2. The following transactions are processed in TARGET2-ECB:

(a) transactions directly resulting from or made in connection with Eurosystem monetary policy operations;

(b) settlement of the euro leg of foreign exchange operations involving the Eurosystem;

(c) settlement of euro transfers resulting from transactions in cross-border large-value netting systems;

(d) settlement of euro transfers resulting from transactions in euro retail payment systems of systemic importance;

(e) settlement of the cash leg of securities transactions;

(f) T2S DCA to T2S DCA liquidity transfer orders, T2S DCA to PM liquidity transfer orders and PM to T2S DCA liquidity transfer orders;

(g) instant payment orders;

(h) positive recall answers;

(i) TIPS DCA to PM liquidity transfer orders and PM to TIPS DCA liquidity transfer orders; and

(j) any other transactions in euro addressed to TARGET2 participants.

3. TARGET2 provides real-time gross settlement for payments in euro, with settlement in central bank money across PM accounts, T2S DCAs and TIPS DCAs. TARGET2 is established and functions on the basis of the SSP through which payment orders are submitted and processed and through which payments are ultimately received in the same technical manner. As far as the technical operation of the TIPS DCAs is concerned, TARGET2 is technically established and functions on the basis of the TIPS Platform. As far as the technical operation of the T2S DCAs is concerned, TARGET2 is technically established and functions on the basis of the T2S Platform.

4. The ECB is the provider of services under these Conditions. Acts and omissions of the TIPS Platform-providing NCBs shall be considered acts and omissions of ECB, for which it shall assume liability in accordance with Article 23 of this Annex. Participation pursuant to these Conditions shall not create a contractual relationship between TIPS DCA holders and the TIPS Platform-providing NCBs when any of the latter acts in that capacity. Instructions, messages or information which a TIPS DCA holder receives from, or sends to, the SSP or TIPS Platform in relation to the services provided under these Conditions are deemed to be received from, or sent to, the ECB.

5. TARGET2 is legally structured as a multiplicity of payment systems composed of all the TARGET2 component systems, which are designated as ‘ systems ’ under the national laws implementing Directive 98/26/EC. TARGET2-ECB is designated as a ‘ system ’ under Section 1(16) of the KWG.

6. Participation in TARGET2 takes effect via participation in a TARGET2 component system. These Conditions describe the mutual rights and obligations of TIPS DCA holders in TARGET2-ECB and the ECB. The rules on the processing of payment orders under these Conditions (Title IV and Appendix I) refer to all payment orders submitted or payments received by any TIPS DCA holder.]

Textual Amendments

F1 Inserted by Decision (EU) 2018/1625 of the European Central Bank of 8 October 2018 amending Decision ECB/2007/7 concerning the terms and conditions of TARGET2-ECB (ECB/2018/24).

(1)

[F1 The Eurosystem's current policy for the location of infrastructure is set out in the following statements, which are available on the ECB's website at www.ecb.europa.eu: (a) the policy statement on euro payment and settlement systems located outside the euro area of 3 November 1998 ; (b) the Eurosystem's policy line with regard to consolidation in central counterparty clearing of 27 September 2001 ; (c) the Eurosystem policy principles on the location and operation of infrastructures settling euro-denominated payment transactions of 19 July 2007 ; (d) the Eurosystem policy principles on the location and operation of infrastructures settling euro-denominated payment transactions: specification of ‘ legally and operationally located in the euro area ’ of 20 November 2008 ; (e) the Eurosystem oversight policy framework, revised version of July 2016.]

(2)

[F1 Guideline ECB/2012/27 of 5 December 2012 on a Trans-European Automated Real-time Gross settlement Express Transfer system (TARGET2) ( OJ L 30, 30.1.2013, p. 1 ).]

(3)

[F1 Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems ( OJ L 166, 11.6.1998, p. 45 ).]

Textual Amendments

F1 Inserted by Decision (EU) 2018/1625 of the European Central Bank of 8 October 2018 amending Decision ECB/2007/7 concerning the terms and conditions of TARGET2-ECB (ECB/2018/24).