The European Central Bank has published a public information document for Eurosystem counterparties explaining the benefits, eligibility conditions and operational mechanics of TARGET2-Securities auto-collateralisation (T2SAC), an automated intraday credit feature used to support euro securities settlement when a participant’s T2S dedicated cash account lacks sufficient funds. T2SAC provides fully collateralised, interest-free intraday credit on T2 business days, triggered during delivery-versus-payment settlement and secured either by the securities being purchased (on-flow) or by pre-held eligible securities (on-stock). Eligible counterparties must participate in TARGET with a main cash account and dedicated cash account, hold at least one T2S securities account, and be eligible for general TARGET intraday credit, while entities subject to certain EU restrictive measures are excluded. Eligible collateral mirrors marketable assets eligible for Eurosystem monetary policy operations, subject to Eurosystem valuation and risk controls, with national central banks able to apply additional exclusions (including close-link related restrictions). Intraday reimbursement can be initiated by counterparties and is also supported via automatic substitution, while outstanding credit is subject to end-of-day processing with automatic reimbursement by 16:30 CET; where reimbursement fails, collateral is relocated into the regular collateral framework and a EUR 1,000 fine applies per occurrence. The note also describes how T2SAC can be set up and used across domestic and linked CSD arrangements, the Correspondent Central Banking Model (available for T2SAC use as of June 2025 with the Eurosystem Collateral Management System go-live), and direct access, including the required static data configuration and the role of the Credit Memorandum Balance. Looking ahead, it highlights an already approved TARGET2-Securities change (T2S-0784-SYS) planned for implementation in November 2027 to allow multiple receiving and regular securities accounts to be configured so counterparties can use multiple collateral mobilisation channels in parallel from a single dedicated cash account.
European Central Bank 2025-12-12
European Central Bank publishes guide to TARGET2-Securities auto-collateralisation and details approved November 2027 configuration change
The European Central Bank released a document on TARGET2-Securities auto-collateralisation (T2SAC), an automated intraday credit feature for euro securities settlement. T2SAC offers fully collateralised, interest-free intraday credit, requiring participation in TARGET and compliance with specific conditions. A future change, T2S-0784-SYS, is set for November 2027 to enable multiple collateral mobilisation channels from a single cash account.