02022O0912 — EN — 21.11.2022 — 001.001

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Amended by:









▼B

GUIDELINE (EU) 2022/912 OF THE EUROPEAN CENTRAL BANK

of 24 February 2022

on a new-generation Trans-European Automated Real-time Gross Settlement Express Transfer system (TARGET) and repealing Guideline 2013/47/EU (ECB/2012/27) (ECB/2022/8)







SECTION I

GENERAL PROVISIONS

Article 1

Subject matter and scope

TARGET provides the following accounts for settlement in euro in central bank money,

(a) Main cash accounts (MCAs) for the settlement of operations with central banks;

(b) Real-time gross settlement dedicated cash accounts (RTGS DCAs) and sub-accounts for real-time interbank and customer payments, and settlement of transactions with ancillary systems (AS);

(c) Real-time gross settlement ancillary system technical accounts (RTGS AS technical accounts), TARGET Instant Payment Settlement (TIPS) ancillary system technical accounts (TIPS AS technical accounts) and ancillary systems guarantee funds accounts (AS guarantee funds accounts) for the settlement of transactions with AS;

(d) TARGET2-Securities dedicated cash accounts (T2S DCAs) for cash payments in relation to securities transactions; and

(e) TARGET instant payment settlement dedicated cash accounts (TIPS DCAs) for the settlement of instant payments.

Article 2

Definitions

For the purposes of this Guideline each of the following terms shall have the meaning ascribed to it in Annex III:

(1) ‘account monitoring group’;

(2) ‘addressable BIC holder’;

(3) ‘ancillary system’ (AS);

(4) ‘ancillary system guarantee funds account’ (AS guarantee funds account);

(5) ‘ancillary system settlement procedure’ (AS settlement procedure);

(6) ‘ancillary system transfer order’ (AS transfer order);

(7) ‘auto-collateralisation’;

(8) ‘automated liquidity transfer order’;

(9) ‘available liquidity’;

(10) ‘banking group’;

(11) ‘branch’;

(12) ‘broadcast message’;

(13) ‘business day’ or ‘TARGET business day’;

(14) ‘Business Identifier Code’;

(15) ‘capacity opinion’;

(16) ‘cash transfer order’;

(17) ‘central bank’ (CB);

(18) ‘central bank operation’;

(19) ‘connected NCB’;

(20) ‘Contingency Solution’;

(21) ‘credit institution’;

(22) ‘credit memorandum balance’ (CMB);

(23) ‘cross-system settlement’;

(24) ‘dedicated cash account’ (DCA);

(25) ‘deposit facility rate’;

(26) ‘deposit facility’;

(27) ‘euro area NCB’;

(28) ‘European Payments Council’s SEPA Instant Credit Transfer (SCT Inst) scheme’ or ‘SCT Inst Scheme’;

(29) ‘Eurosystem CB’;

(30) ‘event of default’;

(31) ‘guarantee funds’;

(32) ‘insolvency proceedings’;

(33) ‘instant payment order’;

(34) ‘instructing party’;

(35) ‘intraday credit’;

(36) ‘investment firm’;

(37) ‘Level 3 NCBs’;

(38) ‘liquidity transfer order’;

(39) ‘marginal lending facility rate’

(40) ‘marginal lending facility’;

(41) ‘mobile proxy look-up (MPL) service’;

(42) ‘near instant payment’;

(43) ‘network service provider’;

(44) ‘non-settled cash transfer order’;

(45) ‘participant’;

(46) ‘payee’;

(47) ‘payer’;

(48) ‘payment order’;

(49) ‘positive recall answer’;

(50) ‘public sector body’;

(51) ‘reachable party’;

(52) ‘Real-time gross settlement ancillary system settlement procedure’ (RTGS AS settlement procedure);

(53) ‘Real-time gross settlement ancillary system technical account’;

(54) ‘recall request’;

(55) ‘rule-based liquidity transfer order’;

(56) ‘settlement bank account group’;

(57) ‘settlement bank’;

(58) ‘suspension’;

(59) ‘TARGET account’;

(60) ‘TARGET component system’;

(61) ‘TARGET coordinator’;

(62) ‘TARGET Instant Payment Settlement (TIPS) ancillary system settlement procedure’ (TIPS AS settlement procedure);

(63) ‘TARGET Instant Payment Settlement (TIPS) ancillary system technical account’ (TIPS AS technical account);

(64) ‘TARGET settlement manager’;

(65) ‘TARGET2-Securities’ (T2S);

(66) ‘technical malfunction of TARGET’.

Article 3

TARGET component systems

1. TARGET is legally structured as a multiplicity of payment systems which make up the component systems of TARGET.

2. Each Eurosystem CB shall operate its own TARGET component system.

3. Each TARGET component system shall be a system designated as such under the relevant national legislation implementing Directive 98/26/EC of the European Parleament and of the Council ( 1 ).

4. The names of the TARGET component systems shall only include ‘TARGET’ and the name or abbreviation of the relevant Eurosystem CB or of the Member State of such Eurosystem CB. The ECB’s TARGET component system shall be called TARGET-ECB.

Article 4

Connection of NCBs of Member States whose currency is not the euro

The NCBs of Member States whose currency is not the euro may only connect to TARGET if they conclude an agreement with the Eurosystem CBs. Such agreement shall specify that the connected NCBs will comply with this Guideline, subject to any mutually agreed appropriate specifications and modifications.

Article 5

Intra-ESCB transactions

Intra-European System of Central Banks (ESCB) transactions denominated in euro shall be processed through TARGET, with the exception of payments that the CBs bilaterally agree to process through correspondent accounts, where appropriate.

Article 6

Intra-Eurosystem obligations and claims

1. Any settlement of cash transfer orders between participants in different TARGET component systems shall automatically be aggregated and adjusted to form part of a single obligation or claim of each euro area NCB vis-à-vis the ECB as set out in an agreement between the Eurosystem CBs. Any obligation or claim of each euro area NCB vis-à-vis the ECB shall be adjusted for book-keeping purposes on a daily basis, using the delta of the end-of-day balances of all the TARGET accounts in the books of the respective euro area NCB.

2. For accounting and reporting purposes, each euro area NCB shall maintain an account to record its obligation or claim towards the ECB, resulting from the settlement of cash transfer orders between its own and other TARGET component systems.7

3. The ECB shall open on its books an account for each euro area NCB in order to mirror at the end of the day such euro area NCB’s obligation or claim towards the ECB.







SECTION II

GOVERNANCE

Article 7

Governance levels

1. Without prejudice to Article 8 of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’), the management of TARGET shall be based on a three-level governance scheme. The tasks assigned to the Governing Council (Level 1), the Level 2 technical and operational management body and the Level 3 NCBs are laid down in Annex II.

2. The Governing Council shall be responsible for the direction, management and control of TARGET. The tasks assigned to Level 1 fall within the exclusive competence of the Governing Council.

3. In accordance with the third subparagraph of Article 12.1 of the Statute of the ESCB, the Eurosystem CBs shall be responsible for the tasks assigned to Level 2, within the general framework defined by the Governing Council. A Level 2 body has been established by the Governing Council and entrusted by the Eurosystem CBs with certain technical and operational management tasks related to TARGET.

4. The Eurosystem CBs shall organise themselves through the conclusion of appropriate agreements.

5. In accordance with the third subparagraph of Article 12.1 of the Statute of the ESCB, the Level 3 NCBs shall be responsible for the tasks assigned to Level 3, within the general framework defined by the Governing Council.

6. The Level 3 NCBs shall conclude agreements with the Eurosystem CBs governing the provision of the services to be provided by the Level 3 NCBs. Such agreements shall also include, where appropriate, the connected NCBs.

7. The Eurosystem, as provider of T2S services, and the Eurosystem CBs, as operators of their respective national TARGET component systems, shall conclude an agreement governing the services to be provided by the former to the latter in respect of the operation of the T2S DCAs. Such agreements shall also be entered into, where appropriate, by the connected NCBs.







SECTION III

OPERATION OF TARGET

Article 8

System support desk

Each Eurosystem CB shall establish and maintain a system support desk providing support to the participants of its respective national TARGET component system. The support desk shall be provided at a minimum between the hours of 07:00 CET and 18:15 CET. This will be extended to 18:30 CET on the last day of the Eurosystem reserve maintenance period.

Article 9

Harmonised Conditions for participation in TARGET

1. Each euro area NCB shall adopt arrangements implementing the Harmonised Conditions for participation in TARGET as laid down in Annex I and so that terms used therein that are listed in Annex III shall have the meaning ascribed to them in Annex III. These arrangements shall exclusively govern the relationship between the relevant euro area NCB and its participants in respect of the opening and operation of TARGET accounts.

2. With effect from 20 November 2023, Eurosystem CBs shall not open accounts other than TARGET accounts for participants eligible to participate in TARGET for the purpose of providing services falling within the scope of this Guideline, subject to the following exceptions: (a) accounts for those participants listed under Annex I, Part I, Article 4(2), points (a) and (b) of the Harmonised Conditions for participation in TARGET; (b) accounts where funds are held intraday for the sole purpose of carrying out cash lodgements and withdrawals; (c) accounts used to hold seized funds or funds pledged to a third-party creditor or funds referred to in Article 3(1)(d) of Regulation (EU) 2021/378 of the European Central Bank (ECB/2021/1) ( 2 ); (d) accounts used by participants in systems operated by an NCB and used to clear instant payments complying with the SCT Inst scheme.

3. The ECB shall adopt the Terms and Conditions of TARGET-ECB by implementing the Harmonised Conditions for participation in TARGET as laid down in Annex I except that: (a) TARGET-ECB shall only provide clearing and settlement services to clearing and settlement organisations, including entities established outside the European Economic Area (EEA), if they are subject to oversight by a competent authority and their access to TARGET-ECB has been approved by the Governing Council; (b) TARGET-ECB shall not provide intraday credit or auto-collateralisation.

4. The standard arrangements adopted by the Eurosystem CBs implementing the Harmonised Conditions for participation in TARGET shall be made public.

5. The Eurosystem CBs may request derogations from the Harmonised Conditions for participation in TARGET on the basis of national law constraints. The Governing Council shall consider such requests on a case-by-case basis and shall grant derogations where appropriate.

6. Subject to the relevant monetary agreement, the ECB may determine appropriate conditions for participation in TARGET by entities referred to in Annex I, Part I, Article 4(2), point (e).

7. The Eurosystem CBs shall not allow any entity to be an addressable BIC holder or reachable party in their TARGET component system if this entity acts via a TARGET account holder that is an NCB of a Member State but is neither a Eurosystem CB nor a connected NCB.

8. The Eurosystem CBs shall not register addressable BIC holders which are eligible to participate in TARGET as set out in Annex I, Part I, Article 4, with the exception of their own branches and those entities listed under Annex I, Part I, Article 4(2), points (a) and (b).

9. With the exception of rules in connection with AS, the Eurosystem CBs shall implement no additional rules in connection with participation in TARGET other than those set out in the Harmonised Conditions for participation in TARGET. No fees shall be charged for the use of or in connection with TARGET, other than those set out in Annex I, Appendix VI, with the exception of fees charged for services related to an NCB co-managing an MCA (as set out in Annex I, Part II, Article 2) if these services are offered by the Eurosystem CB. A Eurosystem CB offering co-management of an MCA shall observe the principle of full cost recovery in setting its fees for these services and pass on, as a minimum, the full costs arising from these services.

10. By way of derogation from paragraph 9, the Eurosystem CBs may set additional rules with respect to TARGET accounts opened to hold funds provided as cash collateral or forming part of a cover pool.

Article 10

Intraday credit — auto-collateralisation

1. The euro area NCBs may grant intraday credit to a participant. Intraday credit may only be granted on its primary MCA and only in accordance with the arrangements implementing the rules on the provision of intraday credit laid down in Annex I, Part II. No intraday credit shall be granted to a participant whose eligibility as a counterparty for Eurosystem monetary policy operations has been suspended or terminated.

2. Further to a request from a participant with access to intraday credit, the euro area NCBs shall offer an auto-collateralisation facility on T2S DCAs, provided that this is done in accordance with the conditions for Auto-collateralisation Operations laid down in Annex I, Part IV.

3. Participants which are subject to restrictive measures adopted by the Council of the European Union or Member States pursuant to Article 65(1), point (b), Article 75 or Article 215 of the Treaty, the implementation of which, in the view of relevant euro area NCB and after informing the ECB, is incompatible with the smooth functioning of TARGET, shall not be eligible for intraday credit or auto-collateralisation.

4. The euro area NCBs may grant intraday credit to AS as set out in Annex I, Part II, Article 10(2), point (d) provided that the arrangements have been submitted to the Governing Council in advance and have been approved by the Governing Council.

5. The euro area NCBs may provide overnight credit to certain eligible central counterparties (CCPs), under the conditions set out in Annex I, Part II, Article 10(5), provided that the request has been submitted to the Governing Council in advance and has been approved by the Governing Council.

6. The Governing Council may, upon a proposal by the relevant euro area NCB, exempt the treasury departments referred to in Annex I, Part II, Article 10(2), point (b) from the requirement to provide adequate collateral before obtaining intraday credit.

7. Where a euro area NCB decides to suspend, limit or terminate a participant’s access to intraday credit or auto-collateralisation, on grounds of prudence as set out in Annex I, Part II, Article 13(1), point (c) or Annex I, Part IV, Article 11, respectively, it shall immediately notify the ECB and other euro area NCBs and connected NCBs thereof in writing. Where appropriate, the Governing Council shall decide upon uniform implementation of the measures taken in all TARGET component systems.

8. If a counterparty’s access to monetary policy instruments is suspended, limited or excluded on the grounds of prudence or otherwise in accordance with the national provisions implementing Article 158 of Guideline (EU) 2015/510 of the European Central Bank (ECB/2014/60) ( 3 ), the relevant euro area NCB shall, in respect of access to intraday credit, implement that decision pursuant to provisions in the contractual or regulatory arrangements applied by the relevant euro area NCB.

9. Where a euro area NCB decides to suspend, limit or terminate a Eurosystem monetary policy counterparty’s access to intraday credit or auto-collateralisation facilities in accordance with Annex I, Part II, Article 13(3) or Annex I, Part IV, Article 11, respectively, such decision shall not take effect until the Governing Council of the ECB has approved it.

10. By derogation from paragraph 9, in urgent circumstances a euro area NCB may suspend a Eurosystem monetary policy counterparty’s access to intraday credit and/or auto-collateralisation facilities with immediate effect. In such cases the euro area NCB concerned shall immediately notify the Governing Council of the ECB thereof in writing. The Governing Council of the ECB shall have the power to reverse the euro area NCB’s action. However, if the Governing Council of the ECB does not send the euro area NCB notice of such reversal within 10 business days of the ECB’s receipt of notification, the Governing Council of the ECB shall be deemed to have approved the euro area NCB’s action.

11. The Governing Council of the ECB may decide to waive or reduce the penalties set out in Annex I, Part II, Article 12(4) if the end-of-day debit balance of the entity in question is attributable to force majeure and/or technical malfunction of TARGET, the latter phrase as defined in Annex III.

Article 11

Additional conditions for AS

1. In addition to the provisions of Article 9(1) to (9), the following shall apply to the relationship between the relevant Eurosystem CB and the AS including ASs operated by Eurosystem CBs.

2. The Eurosystem CBs shall provide fund transfer services in central bank money to AS acting in that capacity. These services shall be offered via either: (a) the TIPS AS Settlement procedure only to support the settlement of instant payments pursuant to the SCT Inst scheme or near instant payments in the books of the AS; or (b) the RTGS AS Settlement Procedures for all other business cases.

3. The Eurosystem CBs may, exceptionally and following approval of the Level 2 body as referred to in Annex II, approve the use of an RTGS DCA by an AS except in relation to the settlement of instant payments pursuant to the SCT Inst scheme. An application for permission shall include a reasoned request of the AS. If the request is granted the pricing set out in Annex I, Appendix VI, paragraph 4 will apply.

4. Each Eurosystem CB shall open a sub-account on request for any settlement bank for which it holds an RTGS DCA when the AS of the settlement bank participates either in the TARGET component system of that Eurosystem NCB or in a different TARGET component system.

5. The Eurosystem CBs may, in addition to those conditions in Annex I, set conditions in connection with participation of AS in TARGET that are related to: (a) business continuity and contingency procedures; (b) the nature of the entitlement to funds held on a TARGET account where the funds held do not form part of the estate of the AS; (c) the CBs’ rights of pledge and set off on TARGET accounts held by or on behalf of AS; (d) collection and distribution of accrued interest; (e) regulatory requirements (including oversight) on AS or AS settlement banks (including those applied by foreign regulators); (f) information exchange to verify compliance with a Eurosystem policy.

6. Eurosystem CBs shall exchange information regarding any significant event during the settlement process of AS.

Article 12

Financing and cost methodology

1. The Governing Council shall determine the rules applicable to the financing of TARGET.

2. The Governing Council shall determine the pricing structure for TARGET using a common Eurosystem cost methodology.

Article 13

Security provisions

The Eurosystem CBs shall comply with measures specified by the Governing Council setting out the security policy and security requirements and controls applicable to TARGET, including in relation to cyber resilience and information security.

Article 14

Audit rules

Audit assessments shall be performed in accordance with the principles and arrangements set out in the Governing Council’s ESCB Audit Policy.

Article 15

Obligations in the event of suspension or termination

1. Eurosystem CBs shall immediately terminate without prior notice or suspend a participant’s participation in the relevant TARGET component system if: (a) insolvency proceedings are opened in relation to a participant; or (b) a participant no longer meets the access criteria for the participation in the relevant TARGET component system.

2. If a Eurosystem CB suspends or terminates a participant’s participation in TARGET in accordance with paragraph 1 or on the grounds of prudence in accordance with Article 17, it shall immediately notify all other Eurosystem CBs thereof, providing all of the following: (a) the participant’s name and BIC; (b) the information upon which the euro area NCB based its decision, including any information or opinion obtained from the relevant supervisory authority; (c) the measure taken and a proposed time frame for its application. Each Eurosystem CB shall, if so requested by another Eurosystem CB, exchange information in relation to such participant, including information in relation to cash transfer orders addressed to it.

3. A Eurosystem CB that has terminated or suspended the participation of a participant in its TARGET component system in accordance with paragraph 1 shall assume liability in relation to the other Eurosystem CBs if it either: (a) subsequently authorises the settlement of cash transfer orders addressed to participants whose participation it has suspended or terminated; or (b) does not comply with the obligations in paragraphs 1 and 2.

4. A Eurosystem CB that has suspended the participation of a participant in its TARGET component system pursuant to paragraph 1(a) shall only process cash transfer orders from that participant on the instructions of its representatives, including those appointed by a competent authority or a court, such as the participant's insolvency administrator, or pursuant to an enforceable decision of a competent authority or a court providing instructions as to how the payments are to be processed. A Eurosystem CB shall reject all outgoing cash transfer orders from the TIPS DCA(s) of a suspended participant.

Article 16

Procedures for the rejection on the grounds of prudence of an application for participation in TARGET

Where, pursuant to Annex I, Part I, Article 5(5), point (c), a Eurosystem CB rejects on the grounds of prudence an application to join TARGET, that Eurosystem CB shall promptly inform the other Eurosystem CBs of such rejection.

Article 17

Procedures for the suspension, limitation or termination on the grounds of prudence of participation in TARGET, and access to intraday credit and to auto-collateralisation

1. Where on the grounds of prudence, a euro area NCB suspends, limits or terminates a participant's access to intraday credit pursuant to Annex I, Part II, Article 13(1), point (c) or to auto-collateralisation pursuant to Annex I, Part IV, Article 11 or a Eurosystem CB suspends or terminates a participant's participation in TARGET pursuant to Annex I, Part I, Article 25(2), point (e), the decision shall, to the extent possible, take effect at the same time in all TARGET component systems.

2. The euro area NCB shall provide the information of Article 15(2) promptly to the relevant supervisory authorities in the euro area NCB’s Member State, with the request that the supervisory authorities share information with the supervisory authorities of other Member States in which the participant has a subsidiary or branch. Taking into account the decision pursuant to paragraph 1, other euro area NCBs shall take appropriate action and provide information thereof promptly to the ECB.

3. The ECB’s Executive Board may propose to the Governing Council to take any decisions in order to ensure uniform implementation of the measures taken pursuant to paragraphs 1 and 2.

4. The euro area NCBs of the Member States in which the decision is to be implemented shall inform the participant about the decision, and shall take all necessary implementation measures.

Article 18

Procedures for cooperation by Eurosystem CBs in connection with administrative or restrictive measures

In connection with the implementation of Annex I, Part I, Article 29(3):

1. any Eurosystem CB shall promptly share with all potentially affected CBs all information that it receives in connection with a proposed cash transfer order, with the exception of liquidity transfer orders between different accounts of the same participant;

2. any Eurosystem CB that receives from a participant evidence of notification having been made to, or consent having been received from, any competent authority shall promptly transmit such evidence to any other CB acting as the payment service provider of the payer or payee as appropriate;

3. the Eurosystem CB acting as payment service provider of the payer shall then promptly inform the payer that it can enter a relevant cash transfer order into TARGET.

Article 19

Business continuity and contingency procedures

1. If an event affecting the normal operation of TARGET occurs, the Eurosystem CB concerned shall immediately notify the TARGET coordinator, who together with the TARGET settlement manager of the Eurosystem CB concerned shall decide on the further steps to be taken.

2. The Eurosystem CBs shall report a failure linked to a participant as referred to in Annex I, Appendix IV, paragraph 2.4, 3.3 or 4.2 to the TARGET coordinator no more than 30 minutes after the start of the failure or at the first opportunity after detecting the failure if such failure might affect the operation of TARGET or create systemic risk or if the participant has been designated as a critical participant by the Eurosystem CBs on the basis of criteria periodically updated and published on the ECB’s website.

3. In exceptional circumstances, the Eurosystem CBs may decide to change TARGET’s operating schedule for reasons including but not limited to a failure affecting an AS. Such decision shall be taken collectively by the Eurosystem CBs.

4. In the cases of any other events which have the potential to affect the normal functioning of TARGET, the Eurosystem CB concerned shall monitor and manage such events in order to prevent any spillover to the smooth functioning of TARGET.

5. The Eurosystem CBs shall maintain a connection to the Contingency Solution.

Article 20

Treatment of claims under the TARGET compensation scheme

1. Unless otherwise decided by the Governing Council, the compensation procedure set out in Annex I, Appendix II shall be managed in accordance with this Article.

2. The CB of the participant submitting the claim for compensation shall assess the compensation claim on a preliminary basis and communicate with the participant in relation to that assessment. Where necessary for the assessment of claims, such CB shall be assisted by other CBs concerned. The relevant CB shall inform the ECB and all other CBs concerned as soon as it becomes aware of pending claims.

3. Within nine weeks following a technical malfunction of TARGET, the CB of the participant submitting the claim shall prepare a preliminary assessment report containing the CB’s assessment of the claims received and submit it to the ECB and all other CBs concerned.

4. Within five weeks following receipt of the preliminary assessment report, the Governing Council shall carry out the final assessment of all claims received, and shall decide on the compensation offers to be made to the participants concerned. Within five business days following the completion of the final assessment, the ECB shall communicate the outcome of the final assessment to the CBs concerned. Those CBs shall promptly inform their participants of the outcome of the final assessment and, where applicable, details of the compensation offer, together with the form constituting the letter of acceptance.

5. Within two weeks following expiry of the period referred to in the final sentence of Annex I, Appendix II, paragraph 4(d), the CB shall inform the ECB and all other CBs concerned about which compensation offers have been accepted and which compensation offers have been rejected.

6. The CBs shall inform the ECB of any claims submitted to them by their participants outside the scope of the TARGET compensation scheme, but relating to a technical malfunction of TARGET.

Article 21

Treatment of losses caused by a technical malfunction of TARGET

1. In the event of a technical malfunction of TARGET: (a) On the payer’s side, any CB with which a payer has placed a deposit benefits from certain financial gains which amount to the difference between the Eurosystem’s main refinancing operations rate and the deposit rate applied to the marginal increase in the use of the Eurosystem’s deposit facility for the period of the technical malfunction of TARGET and up to the amount of the non-settled cash transfer orders. Where the payer is left with non-remunerated surplus funds, the financial gains amount to the Eurosystem’s main refinancing operations rate, applied to the amount of the non-interest-bearing surplus funds for the period of the technical malfunction of TARGET and up to the amount of the non-settled cash transfer orders. (b) On the payee’s side, the CB from whom the payee has borrowed by using the marginal lending facility benefits from certain financial gains which amount to the difference between the marginal lending facility rate and the Eurosystem’s main refinancing operations rate, applied to the marginal increase in the use of the marginal lending facility for the period of the technical malfunction of TARGET and up to the amount of the non-settled cash transfer orders.

2. The ECB’s financial gains amount to: (a) the earnings in relation to the connected NCBs arising from the different remuneration of end-of-day balances of those connected NCBs in relation to the ECB; and (b) the amount of penalty interest the ECB receives from connected NCBs whenever one of those connected NCBs imposes a penalty on a participant for a failure to reimburse intraday credit on time, as provided for in the agreement between the Eurosystem CBs and the connected NCBs.

3. The financial gains referred to in paragraphs 1 and 2 shall be pooled by the CBs and the resulting pooled amount shall be used to reimburse those CBs that incur the costs of compensating their participants. Any remaining financial gains or costs incurred by the CBs in compensating their participants shall be shared among the Eurosystem CBs in accordance with the key for subscription to the ECB’s capital.

Article 22

Security rights in relation to funds on sub-accounts and intra-Eurosystem guarantee

1. For the purpose of the settlement of AS transfer orders related to RTGS AS settlement procedure C, any Eurosystem CB that has opened sub-accounts for its RTGS DCA holders shall ensure that the balances on such sub-accounts (including increases or reductions of that balance resulting from crediting or debiting cross system settlement payments to or from the sub-account or from crediting liquidity transfers to the sub-account) at the moment the AS starts a settlement cycle can only be used for the settlement of AS transfer orders related to that RTGS AS settlement procedure C. This is notwithstanding any insolvency proceedings with respect to the relevant RTGS DCA holder and notwithstanding any individual enforcement measure relating to such RTGS DCA holder’s sub-account.

2. Each time liquidity is transferred to a RTGS DCA holder’s sub-account and where the Eurosystem CB is not the AS’s CB, such Eurosystem CB shall, upon communication by the AS (via a ‘start-of-cycle’ message), confirm the balance on the sub-account to the relevant AS and, in doing so, guarantee to the AS’s CB payment up to the amount of this particular balance. The confirmation of the balance to the AS shall also entail a legally binding declaration of will by the AS’s CB that the latter guarantees to the AS payment up to the amount of the confirmed balance. By confirming the increase or reduction of that balance upon crediting or debiting cross-system settlement AS transfer orders to or from the sub-account or crediting liquidity transfers to the sub-account, both the Eurosystem CB that is not the AS’s CB and the AS’s CB declare an increase or a reduction of the guarantee in the amount of the payment. Both guarantees shall be irrevocable, unconditional and payable on first demand. Both guarantees shall expire upon communication by the AS that the settlement has been completed (via an ‘end-of-cycle’ message).







SECTION IV

TRANSITIONAL AND FINAL PROVISIONS

Article 23

Dispute resolution and applicable law

1. In the event of a dispute between Eurosystem CBs in relation to this Guideline, the affected parties shall seek to settle the dispute in accordance with the Memorandum of Understanding on an Intra-ESCB Dispute Settlement Procedure.

2. By derogation from paragraph 1, if a dispute relating to the division of the tasks between Level 2 and Level 3 cannot be settled by agreement between the affected parties, the Governing Council shall resolve the dispute.

3. In the event of a dispute of the type referred to in paragraph 1, the parties’ respective rights and obligations shall primarily be determined by the rules and procedures laid down in this Guideline. In disputes concerning cash transfer orders between TARGET component systems, the law of the Member State where the seat of the Eurosystem CB of the payee is located shall apply in a supplementary manner, provided that it does not conflict with this Guideline.

Article 24

Repeal of Guideline 2013/47/EU (ECB/2012/27)

▼M1

1. Guideline ECB/2012/27 is repealed with effect from 20 March 2023.

▼B

2. References to the repealed Guideline shall be construed as references to this Guideline.

Article 25

Taking effect and implementation

1. This Guideline shall take effect on the day of its notification to the national central banks of the Member States whose currency is the euro.

▼M1

2. The Eurosystem central banks shall comply with this Guideline from 20 March 2023.

▼B

3. ►M1 ◄ They shall notify the ECB of the texts and means relating to those measures by 19 April 2022, at the latest. The national central banks of the Member States whose currency is the euro shall take the necessary measures to comply with this Guideline and apply them from 20 March 2023.They shall notify the ECB of the texts and means relating to those measures by 19 April 2022, at the latest.

Article 26

Miscellaneous and transitional provisions

1. Upon the date specified in Article 25(2), a participant’s: (a) balances on TARGET2 PM accounts shall be transferred in the relevant MCAs as specified by the participant; (b) TARGET2 TIPS DCAs shall become TIPS DCAs; (c) TARGET2 T2S DCAs shall become T2S DCAs; (d) TARGET2 technical accounts, TARGET2 TIPS AS technical accounts and TARGET2 guarantee fund accounts for AS settlement procedures shall become RTGS AS technical accounts, TIPS AS technical accounts and AS guarantee fund accounts respectively; (e) balances on Home Accounts shall be transferred in the relevant MCAs as specified by the participant.

2. Participants shall suffer no loss and gain no profit as a result of the transfer of balances pursuant to paragraph 1.

3. The intra-Eurosystem obligations arising from settlement of payments between participants in different TARGET2 component systems pursuant to Article 6 of Guideline 2013/47/EU (ECB/2012/27) shall continue to be recorded in TARGET in accordance with Article 6 of this Guideline.

4. Notwithstanding Annex I, Part I, Article 5(1), points (d) and (e), capacity and country opinions requested by Eurosystem CBs pursuant to Article 13 of Guideline 2013/47/EU (ECB/2012/27) or pursuant to Annex II, Article 8(2), Annex IIA, Article 6(2), and Annex IIB, Article 6(2) to Guideline 2013/47/EU (ECB/2012/27), respectively, shall remain valid for the purposes of this Guideline.

5. Notwithstanding Annex I, Part II, Article 10(2), point (d), access to intraday credit granted by the Governing Council under the terms of Annex III, paragraph (2)(e) to Guideline 2013/47/EU (ECB/2012/27) shall remain valid.

6. Groups recognised by the Governing Council in accordance with the definition of ‘group’ in Annex II, Article 1 of Guideline 2013/47/EU (ECB/2012/27) shall continue to be recognised and considered as banking groups for the purposes of this Guideline.

Article 27

Addressees, implementing measures and reporting to level 1

1. This Guideline is addressed to all Eurosystem central banks.

2. The Governing Council shall receive a report on an annual basis from Level 2 containing the information required by the Governing Council in order to fulfil its responsibilities as Level 1.









ANNEX I

HARMONISED CONDITIONS FOR PARTICIPATION IN TARGET

PART I

General terms and conditions

Article 1

Scope

The terms and conditions set out in this Part I govern the relationship between [insert name of CB] and its participants in TARGET-[insert CB/country reference]. The terms and conditions set out in the following Parts II, III, IV, V, VI and VII apply as far as participants opt for and are granted one or more accounts described in such Parts. The terms and conditions set out in Parts I to VII of this Annex are referred to in this Guideline collectively as the ‘Harmonised Conditions’ or the ‘Conditions’.

Article 2

Appendices

1. The following Appendices form an integral part of these Conditions: Appendix I: Technical specifications for the processing of cash transfer orders Appendix II: TARGET compensation scheme Appendix III: Terms of reference for capacity and country opinions Appendix IV: Business continuity and contingency procedures Appendix V: TARGET operating schedule Appendix VI: Fee schedule Appendix VII: Requirements regarding information security management and business continuity management [Appendix VIII: Insert if required: List of definitions set out in Annex III to the Guideline]

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 3

General description of TARGET

1. TARGET is legally structured as a multiplicity of payment systems composed of all TARGET component systems, each of which is designated as a ‘system’ under the relevant national law implementing Directive 98/26/EC.

2. TARGET comprises payment systems in euro that settle in central bank money and provide central liquidity management services, real-time gross settlement for payments and services for AS settlement, and enable cash payments in relation to securities settlement and the settlement of instant payments.

3. TARGET provides: (a) MCAs for the settlement of central bank operations; (b) RTGS DCAs for large value real-time gross settlement of payments and sub-accounts if required for AS settlement; (c) T2S DCAs for cash payments in relation to securities settlement; (d) TIPS DCAs for the settlement of instant payments; and (e) the following accounts for AS settlement: (i) RTGS AS technical accounts; (ii) AS guarantee fund accounts; and (iii) TIPS AS technical accounts.

Each account in TARGET-[insert name of CB] shall be identified by means of a unique account number made up of the elements described in Appendix I, paragraph 2.

Article 4

Access criteria

1. The following types of entities are eligible to become participants in TARGET-[insert CB/country reference] upon request: (a) credit institutions established in the Union or the EEA, including when they act through a branch established in the Union or the EEA; (b) credit institutions established outside the EEA, provided that they act through a branch established in the Union or the EEA; (c) NCBs of Member States and the ECB;

provided that the entities referred to in points (a) and (b) are not subject to restrictive measures adopted by the Council of the European Union or Member States pursuant to Article 65(1)(b), Article 75 or Article 215 of the Treaty, the implementation of which, in the view of [insert name of CB] after informing the ECB, is incompatible with the smooth functioning of TARGET.

2. The [insert name of CB] may, at its discretion, also admit the following entities as participants: (a) treasury departments of central or regional governments of Member States; (b) public sector bodies of Member States authorised to hold accounts for customers; (c) (i) investment firms established in the Union or the EEA, including when they act through a branch established in the Union or the EEA; and (ii) investment firms established outside the EEA, provided that they act through a branch established in the Union or the EEA; (d) entities managing AS, and acting in that capacity; and (e) credit institutions or any of the entities of the types listed in points (a) to (d), in both cases where these are established in a country with which the Union has entered into a monetary agreement allowing access by any of such entities to payment systems in the Union subject to the conditions set out in the monetary agreement and provided that the relevant legal regime applying in the country is equivalent to the relevant Union legislation.

Article 5

Application procedure

1. In order to become a participant in TARGET-[insert name of CB/country reference] an eligible entity as described in Article 4(1) or an entity that may be admitted by [insert name of CB] under Article 4(2) shall fulfil the following requirements: (a) install, manage, operate, monitor and ensure the security of the necessary IT infrastructure to connect to TARGET-[insert CB/country reference] and be able to submit cash transfer orders to it. In doing so, applicant participants may involve third parties but retain sole liability; (b) have passed the tests required by the [insert name of CB]; (c) if it is an applicant for an a RTGS DCA, a T2S DCA or a TIPS DCA it shall also hold or open an MCA with [insert name of CB]; (d) provide a capacity opinion in the form specified in Appendix III, unless the information and representations to be provided in such capacity opinion have already been obtained by the [insert name of CB] in another context; (e) for the entities referred to in Article 4(1), point (b) and in Article 4(2), point (c)(ii), provide a country opinion in the form specified in Appendix III, unless the information and representations to be provided in such country opinion have already been obtained by the [insert name of CB] in another context; (f) if it is an applicant for a TIPS DCA, has adhered to the SCT Inst scheme by signing the SEPA Instant Credit Transfer Adherence Agreement; (g) if it is an applicant for a TIPS AS technical account, has provided evidence that the disclosure letter showing their intent to be an SCT Inst compliant Clearing and Settlement Mechanism (CSM) has been provided to the European Payments Council (EPC).

2. Applicants shall apply to the [insert name of CB], as a minimum enclosing the following documents/information: (a) completed reference data collection forms as provided by [insert name of CB]; (b) the capacity opinion, if required by the [insert name of CB], and the country opinion, if required by the [insert name of CB]; (c) if it is an applicant for a TIPS DCA, evidence of their adherence to the SCT Inst scheme; (d) if the applicant is applying to use the TIPS AS settlement procedure, evidence that they have provided the EPC with the disclosure letter showing their intent to be an SCT Inst compliant CSM; (e) if the applicant designates a paying agent, the evidence that the paying agent has agreed to act in that role.

3. Applicants which are already TARGET participants and apply for a new account as described in: (i) Part III (RTGS-DCA); (ii) Part IV (T2S DCA); (iii) Part V (TIPS DCA); (iv) Part VI (RTGS AS technical account); and/or (v) Part VII (TIPS AS technical account), shall comply with the provisions of paragraphs 1 and 2 to the extent relevant for the new account applied for.

4. The [insert name of CB] may also request any additional information it deems necessary to decide on an application to open a TARGET account.

5. The [insert name of CB] shall reject the application to participate if: (a) the applicant is not an eligible entity as described in Article 4(1) or an entity that may be admitted by [insert name of CB] under Article 4(2); (b) one or more of the participation requirements referred to in paragraph 1 are not met; and/or (c) according to the [insert name of CB]’s assessment, such participation would endanger the overall stability, soundness and safety of TARGET-[insert CB/country reference] or of any other TARGET component system, or would jeopardise the [insert name of CB]’s performance of its tasks as described in [refer to relevant national law] and the Statute of the European System of Central Banks and of the European Central Bank, or poses risks on the grounds of prudence.

6. The [insert name of CB] shall communicate its decision on the application to become a participant in TARGET-[insert name of CB/country reference] to the applicant participant within one month of the [insert name of CB]’s receipt of the application. Where the [insert name of CB] requests additional information pursuant to paragraph 4, the decision shall be communicated within one month of the [insert name of CB]’s receipt of this information from the applicant. Any rejection decision shall contain reasons for the rejection.

Article 6

Participants

1. Participants which are not AS shall hold at least one MCA with the [insert name of CB] and may also hold one or more RTGS DCAs, T2S DCAs and/or TIPS DCAs with the [insert name of CB].

2. AS which use the RTGS AS settlement procedures or the TIPS AS settlement procedure shall be subject to the terms and conditions set out in this Part as well as in Part VI or Part VII, respectively. They may hold one or more MCAs, T2S DCAs and, exceptionally and if approved by [insert name of CB], one or more RTGS DCAs except in relation to the clearing of instant payments pursuant to the SCT Inst scheme. If an AS holds an RTGS DCA or a T2S DCA it shall also hold at least one MCA with the [insert name of CB]. In the event that an AS holds one or more MCAs or RTGS DCAs or T2S DCAs, the respective Parts of these Conditions shall also apply.

Article 7

Access to a participant’s account by entities other than the participant

1. To the extent technically possible, a participant may give access to its TARGET accounts to one or more entities it designates, for the purposes of submitting cash transfer orders and performing other actions.

2. Cash transfer orders submitted or funds received by the entities designated by a participant as referred to in paragraph 1 shall be deemed to have been submitted or received by that participant itself.

3. The participant shall be bound by such cash transfer orders and any other action taken by the entity or entities referred to in paragraph 1, regardless of the content of, or any non-compliance with, the contractual or other arrangements between that participant and such entity.

Article 8

Billing

1. The [insert name of CB] shall identify billable items according to Appendix VI and shall allocate each of them to the participant from which that billable item originates.

2. Any fee payable in relation to a cash transfer order submitted by or cash transfer received by an AS, irrespective of whether it uses the RTGS AS settlement procedures or an RTGS DCA, shall be exclusively charged to that AS.

3. Billable items generated by actions taken by the designated entities referred in Article 7, as well as by central banks acting on behalf of a participant, shall be allocated to the participant.

4. The [insert name of CB] shall issue separate invoices to the participant for the relevant services described in: (i) Part III (RTGS-DCA); (ii) Part IV (T2S DCA); (iii) Part V (TIPS DCA); (iv) Part VI (RTGS AS settlement procedures); and (v) Part VII (TIPS AS settlement procedure).

5. The [insert name of CB] shall settle each invoice by means of a direct debit of an MCA held by the participant, unless the participant has designated another participant in TARGET (which may be in TARGET- [insert name of CB/country reference] or another component system) as a paying agent and instructed the [insert name of CB] to debit the MCA of that paying agent. Such an instruction shall not release the participant from its obligation to pay each invoice.

6. Where a paying agent has been designated, the participant will provide the [insert name of CB] with evidence that the paying agent has agreed to act in that role.

7. For the purposes of this Article, each AS shall be treated separately, even if two or more of them are operated by the same legal entity, and irrespective of whether or not the AS has been designated under Directive 98/26/EC. In the case of an AS that has not been designated under Directive 98/26/EC, it shall be identified as an AS by reference to the following criteria: (a) it is a formal arrangement, based on a contractual or legislative instrument, e.g. an agreement among the participants and the system operator; (b) it has multiple membership; (c) it has common rules and standardised arrangements; and (d) is for the purpose of clearing, netting and/or settlement of payments and/or securities between the participants.

Article 9

Billing Groups

1. Upon the request of the participant the [insert name of CB] shall create a billing group to allow its members to benefit from the degressive pricing applicable to RTGS DCAs. The billing group may only include RTGS DCA holders belonging to the same banking group, from one or more TARGET component systems.

2. Upon the request of an RTGS DCA holder the [insert name of CB] shall add that RTGS DCA holder to or delete it from a billing group which may be in TARGET-[insert name of CB/country reference] or in any other TARGET component system. The RTGS DCA holder shall inform all other members of the billing group of such a request prior to making it.

3. RTGS DCA holders included in a billing group shall be invoiced individually as set out in Article 8.

Article 10

Obligations of the [insert name of CB] and the participant

1. The [insert name of CB] shall offer the services described in Parts II, III, IV, V, VI and VII of these Conditions where a participant has opted for and been granted an account as referred to therein. Save where otherwise provided in these Conditions or required by law, the [insert name of CB] shall use all reasonable means within its power to perform its obligations under these Conditions, without guaranteeing a result.

2. The [insert name of CB] is the provider of services pursuant to these Conditions. Acts and omissions of the Level 3 NCBs shall be considered as acts and omissions of [insert name of CB], for which it shall assume liability in accordance with Article 22. Participation pursuant to these Conditions shall not create a contractual relationship between participants and the Level 3 NCBs when any of the latter acts in its capacity as a Level 3 NCB. Instructions, messages or information which a participant receives from, or sends to, TARGET in relation to the services provided under these Conditions shall be deemed to be received from, or sent to, [insert name of CB].

3. The participant shall pay to [insert name of CB] fees in accordance with Article 8.

4. The participant shall ensure that it is technically connected to TARGET-[insert CB/country reference] in accordance with TARGET operating schedule set out in Appendix V. This obligation may be fulfilled through a designated entity referred to in Article 7.

5. The participant shall represent and warrant to the [insert name of CB] that the performance of its obligations under these Conditions does not breach any law, regulation or by-law applicable to it or any agreement by which it is bound.

6. The participant shall pay any applicable stamp duties or other documentary taxes or duties, if applicable, as well as any other costs the participant incurs in opening, maintaining or closing its TARGET account.

Article 11

Cooperation and information exchange

1. In performing their obligations and exercising their rights under these Conditions, the [insert name of CB] and participants shall cooperate closely to ensure the stability, soundness and safety of TARGET-[insert CB/country reference]. They shall provide each other with any information or documents relevant for the performance of their respective obligations and the exercise of their respective rights under these Conditions, without prejudice to any banking secrecy obligations.

2. The [insert name of CB] shall establish and maintain a system support desk to assist participants in relation to difficulties arising in connection with system operations.

3. Up-to-date information on the operational status of each service shall be available on a TARGET Information System (TIS) on a dedicated webpage on the ECB’s website.

4. The [insert name of CB] may communicate system relevant messages to participants by means of a broadcast message or, if this means is not available, by any other appropriate means of communication.

5. Participants shall update in a timely manner existing reference data collection forms and submit new reference data collection forms to the [insert name of CB]. Participants shall verify the accuracy of information relating to them that is entered into TARGET-[insert CB/country reference] by the [insert name of CB].

6. The participant hereby authorises [insert name of CB] to communicate to the Level 3 NCBs any information relating to participants which the Level 3 NCBs may need, in accordance with the agreements between the Level 3 NCBs and the Eurosystem CBs governing the provision of the services to be provided by the Level 3 NCBs.

7. Participants shall inform the [insert name of CB] without undue delay about any change in their legal capacity and relevant legislative changes affecting issues covered by the country opinion as set out in the terms of reference given in Appendix III.

8. [insert name of CB] may at any time request an update or renewal of the country or capacity opinions referred to in Article 5(1), points (d) and (e).

9. Participants shall immediately inform the [insert name of CB] if an event of default occurs in relation to themselves or if they are subject to crisis prevention measures or crisis management measures within the meaning of Directive 2014/59/EU of the European Parliament and of the Council ( 4 ) or any other equivalent applicable legislation.

Article 12

Remuneration of Accounts

1. MCAs, DCAs and sub-accounts shall either be remunerated at zero per cent or at the deposit facility rate, whichever is lower, unless they are used to hold any of the following: (a) minimum reserves; (b) excess reserves; (c) government deposits as defined in Article 2, point (5) of Guideline (EU) 2019/671 of the European Central Bank (ECB/2019/7) ( 5 ).

In the case of minimum reserves, the calculation and payment of remuneration of holdings shall be governed by Council Regulation (EC) No 2531/98 ( 6 ) and Regulation (EU) 2021/378 (ECB/2021/1).

In the case of excess reserves, the calculation and payment of remuneration of holdings shall be governed by Decision (EU) 2019/1743 of the European Central Bank (ECB/2019/31) ( 7 ).

In the case of government deposits, the remuneration of holdings shall be governed by the provisions relating to those government deposits as set out in Article 4 of Guideline (EU) 2019/671 (ECB/2019/7).

2. Overnight balances held on a TIPS AS technical account or on an RTGS AS technical account for AS settlement procedure D, and guarantee funds, including those held on an AS guarantee fund account, shall be remunerated at the deposit facility rate.

Article 13

Management of Accounts

1. Participants shall monitor and manage the liquidity on their accounts in line with the TARGET operating schedule as set out in Appendix V and perform transaction-level reconciliation at least once a day. This obligation may be fulfilled through a designated entity referred to in Article 7.

2. The participant shall make use of the tools provided by [insert name of CB] for the purpose of account reconciliation, in particular the daily statement of account which is made available to each participant. This obligation may be fulfilled through a designated entity referred to in Article 7.

3. Participants shall immediately inform the [insert name of CB] in the event that a mismatch occurs in relation to any of their accounts.

Article 14

Minimum reserves

1. Upon request of a participant subject to a minimum reserve requirement, the [insert name of CB] shall mark one or more MCAs or DCAs belonging to that participant in TARGET-[insert CB/country reference] as held for the purpose of fulfilling minimum reserve requirements.

2. For the purpose of fulfilment of minimum reserve requirements, where applicable to the participant, the sum of the end-of-day balances of all accounts held by that participant with [insert name of CB] and marked for that purpose, shall be taken into account.

Article 15

Floor and ceiling amounts

1. The participant may set floor and ceiling amounts on its MCA or DCAs.

2. The participant may choose to receive a notification if the floor or ceiling amount is breached. In addition, for MCAs or RTGS DCAs the participant may opt for the breach to trigger a rule-based liquidity transfer order.

3. The settlement of a liquidity transfer order shall not trigger a check of whether the floor or ceiling amount has been breached.

Article 16

Account monitoring group

1. An MCA holder may create one or more account monitoring groups for the purpose of monitoring liquidity on several MCAs or DCAs and will become the leader party for any account monitoring group that it creates.

2. A participant may add any of its MCAs or DCAs opened within TARGET-[insert CB/country reference] or any other TARGET component system to one or more account monitoring groups and thereby become a member of that account monitoring group. A member of an account monitoring group may initiate the removal of its account from that account monitoring group at any time. A participant shall inform the leader party of an account monitoring group prior to adding an account to or removing an account from that account monitoring group.

3. Only the leader party for an account monitoring group shall be able to view the balances of all accounts included in that account monitoring group.

4. The leader party may delete the account monitoring group and shall inform the other members of the account monitoring group prior to such deletion.

Article 17

Acceptance and rejection of cash transfer orders

1. Cash transfer orders submitted by participants shall be deemed accepted by the [insert name of CB] if: (a) The transfer message complies with the technical requirements of TARGET described in Appendix I; (b) the message complies with the formatting rules and conditions described in Appendix I; (c) the message passes the double-entry check described in Appendix I; (d) in cases where a payer has been suspended with regard to debiting its account(s) or a payee has been suspended with regard to crediting its account(s), the suspended participant’s CB’s explicit consent has been obtained; (e) in cases where the cash transfer order is made as part of an RTGS AS settlement procedure, the participant’s account is included in the settlement bank account group requested by that AS as set out in Part VI, Article 1(7); and (f) in the case of cross-system settlement as part of RTGS AS settlement procedures, the AS concerned is part of a cross-system settlement arrangement as set out in Article 9 of Part VI.

2. The [insert name of CB] shall immediately reject any cash transfer order that does not fulfil the conditions laid down in paragraph 1. The [insert name of CB] shall inform the participant of any rejection of a cash transfer order, as specified in Appendix I.

Article 18

Entry of cash transfer orders into the system and their irrevocability

1. For the purposes of the first sentence of Articles 3(1) and 5 of Directive 98/26/EC and [insert national law provisions implementing these Articles of Directive 98/26/EC]: (a) all cash transfer orders, except as provided for in points b), c) and d) of this paragraph, shall be deemed entered into TARGET-[insert CB/country reference] and irrevocable at the moment that the relevant participant’s TARGET account is debited; (b) instant payment orders shall be deemed entered into TARGET-[insert CB/country reference] and irrevocable at the moment that the relevant funds on the TIPS DCA of the participant or on its TIPS AS technical account are reserved; (c) in the case of transactions that are settled on T2S DCAs and that are subject to matching of two separate transfer orders: (i) such transfer orders, except as provided for in point (ii) of this subparagraph, shall be deemed entered into TARGET-[Insert CB/country reference] at the moment at which they have been declared compliant with the technical rules of T2S by the T2S Platform and irrevocable at the moment the transaction has been given the status ‘matched’ on the T2S Platform; (ii) in the case of transactions involving one participating CSD that has a separate matching component where transfer orders are sent directly to that participating CSD to be matched in its separate matching component, such transfer orders shall be deemed entered into TARGET-[Insert CB/country reference] at the moment at which they have been declared compliant with the technical rules of T2S by that participating CSD and irrevocable from the moment the transaction has been given the status ‘matched’ on the T2S Platform. A list of participating CSDs referred to in this point (ii) is available on the ECB’s website; (d) cash transfer orders in connection with RTGS AS settlement procedures shall be deemed entered in the TARGET component system of the account to be debited at the moment at which they are accepted by that TARGET component system and irrevocable at that moment.

2. The provisions of paragraph 1 shall not affect any rules of AS that stipulate a moment of entry into the AS and/or irrevocability of transfer orders submitted to it at a point in time earlier than the moment of entry of the respective AS transfer orders in the relevant TARGET component system.

3. Cash transfer orders included in an algorithm may not be revoked during the period that the algorithm is running.

Article 19

Business continuity and contingency procedures

1. In the event of an abnormal external event or any other event which affects transactions on the TARGET accounts, the business continuity and contingency procedures described in Appendix IV shall apply.

2. In exceptional circumstances the TARGET operating schedule may be changed, in which case participants will be informed by [insert name of CB].

3. In exceptional circumstances an AS may make a request to [insert name of CB] to modify the TARGET operating schedule.

4. The Eurosystem provides a Contingency Solution for use if the events described in paragraph 1 occur. Connection to and use of the Contingency Solution shall be mandatory for participants considered by [insert name of CB] to be critical and for participants that settle very critical transactions as set out in Appendix IV. Other participants may, on request, connect to the Contingency Solution.

Article 20

Security requirements

1. Participants shall implement adequate security controls to protect their systems from unauthorised access and use. Participants shall be exclusively responsible for the adequate protection of the confidentiality, integrity and availability of their systems.

2. Participants shall immediately inform the [insert name of CB] of any security-related incidents in their technical infrastructure and, where appropriate, security-related incidents that occur in the technical infrastructure of the third-party providers. The [insert name of CB] may request further information about the incident and, if necessary, request that the participant take appropriate measures to prevent a recurrence of such an event.

3. The [insert name of CB] may impose additional security requirements, in particular with regard to cybersecurity or the prevention of fraud, on all participants and/or on participants that are considered critical by the [insert name of CB].

4. Participants shall provide the [insert name of CB] with: (i) permanent access to their attestation of adherence to their chosen NSP’s endpoint security requirements; and (ii) on an annual basis the TARGET self-certification statement as required for the types of accounts that they hold and as published on the [insert name of CB]’s website and on the ECB’s website in English.

5. The [insert name of CB] shall assess the participant’s self-certification statement(s) on the participant’s level of compliance with each of the requirements set out in the TARGET self-certification requirements. These requirements are listed in Appendix VII.

6. The participant’s level of compliance with the requirements of the TARGET self-certification shall be categorised as follows, in increasing order of severity: ‘full compliance’; ‘minor non-compliance’; or, ‘major non-compliance’. The following criteria apply: full compliance is reached where participants satisfy 100 % of the requirements; minor non-compliance is where a participant satisfies less than 100 % but at least 66 % of the requirements and major non-compliance where a participant satisfies less than 66 % of the requirements. If a participant demonstrates that a specific requirement is not applicable to it, it shall be considered as compliant with the respective requirement for the purposes of the categorisation. A participant which fails to reach ‘full compliance’ shall submit an action plan demonstrating how it intends to reach full compliance. The [insert name of CB] shall inform the relevant supervisory authorities of the status of such participant’s compliance.

7. If the participant refuses to grant permanent access to its attestation of adherence to its chosen NSPs endpoint security requirements or does not provide the TARGET self-certification, the participant’s level of compliance shall be categorised as ‘major non-compliance’.

8. The [insert name of CB] shall re-assess compliance of participants on an annual basis.

9. The [insert name of CB] may impose the following measures of redress on participants whose level of compliance was assessed as minor or major non-compliance, in increasing order of severity: (a) enhanced monitoring: the participant shall provide the [insert name of CB] with a monthly report, signed by a senior executive, on its progress in addressing the non-compliance. The participant shall additionally incur a monthly penalty charge for each affected account of EUR 1 000 . This measure of redress may be imposed in the event the participant receives a second consecutive assessment of minor non-compliance or an assessment of major non-compliance; (b) suspension: participation in TARGET-[insert CB/country reference] may be suspended in the circumstances described in Article 25(2), points (b) and/or (c). By way of derogation from Article 25, the participant shall be given three months’ notice of such suspension. The participant shall incur a monthly penalty charge for each suspended account of EUR 2 000 . This measure of redress may be imposed in the event the participant receives a second consecutive assessment of major non-compliance; (c) termination: participation in TARGET-[insert CB/country reference] may be terminated in the circumstances described in Article 25(2), points (b) and/or (c). By way of derogation from Article 25, the participant shall be given three months’ notice. The participant shall incur an additional penalty charge of EUR 1 000 for each terminated account. This measure of redress may be imposed if the participant has not addressed the major non-compliance to the satisfaction of [insert name of CB] following three months of suspension.

10. Participants allowing access to their TARGET account by third parties as set out in Article 7 and participants having registered addressable BIC holders as set out in Part III, Article 2, shall address the risk stemming from allowing such access in accordance with the security requirements set out in paragraphs 1 to 9.

Article 21

Compensation Scheme

If a cash transfer order cannot be settled on the same business day on which it was accepted due to a technical malfunction of TARGET, the [insert name of CB] shall offer to compensate the participant concerned in accordance with the special procedure laid down in Appendix II.

Article 22

Liability regime

1. In performing their obligations pursuant to these Conditions, the [insert name of CB] and the participants shall be bound by a general duty of reasonable care in relation to each other.

2. The [insert name of CB] shall be liable to its participants in cases of fraud (including but not limited to wilful misconduct) or gross negligence, for any loss arising out of the operation of TARGET-[insert CB/country reference]. In cases of ordinary negligence, the [insert name of CB]’s liability shall be limited to the participant’s direct loss, i.e. the amount of the transaction in question and/or the loss of interest thereon, excluding any consequential loss.

3. The [insert name of CB] shall not be liable for any loss that results from any malfunction or failure in the technical infrastructure (including but not limited to the [insert name of CB]’s computer infrastructure, programmes, data, applications or networks), if such malfunction or failure arises in spite of the [insert name of CB] having adopted those measures that are reasonably necessary to protect such infrastructure against malfunction or failure, and to resolve the consequences of such malfunction or failure (the latter including but not limited to initiating and completing the business continuity and contingency procedures referred to in Appendix IV).

4. The [insert name of CB] shall not be liable: (a) to the extent that the loss is caused by the participant; or (b) if the loss arises out of external events beyond the [insert name of CB]’s reasonable control (force majeure).

5. Notwithstanding the [insert applicable national law provisions] paragraphs 1 to 4 shall apply to the extent that the [insert name of CB]’s liability can be excluded.

6. The [insert name of CB] and the participants shall take all reasonable and practicable steps to mitigate any damage or loss referred to in this Article.

7. In performing some or all of its obligations under these Conditions, the [insert name of CB] may commission third parties in its own name, particularly telecommunications or other network providers or other entities, if this is necessary to meet the [insert name of CB]’s obligations or is standard market practice. The [insert name of CB]’s obligation shall be limited to the due selection and commissioning of any such third parties and the [insert name of CB]’s liability shall be limited accordingly. For the purposes of this paragraph, the Level 3 NCBs shall not be considered as third parties.

Article 23

Evidence

1. Unless otherwise provided in these Conditions, all cash transfer orders and related messages, such as confirmations of debits or credits, or statement messages, between the [insert name of CB] and participants shall be made through the relevant NSP.

2. Electronic or written records of the messages retained by the [insert name of CB] or by the relevant NSP shall be accepted as a means of evidence of the payments processed through the [insert name of CB]. The saved or printed version of the original message of the relevant NSP shall be accepted as a means of evidence, regardless of the form of the original message.

3. If a participant’s connection to the NSP fails, the participant shall use the alternative means of transmission of messages as agreed with [insert name of CB]. In such cases, the saved or printed version of the message produced by the [insert name of CB] shall have the same evidential value as the original message, regardless of its form.

4. The [insert name of CB] shall keep complete records of cash transfer orders submitted and payments received by participants for a period of [insert period required by relevant national law] from the time at which such cash transfer orders are submitted and payments are received, provided that such complete records shall cover a minimum of five years for any participant in TARGET that is subject to continuous vigilance pursuant to restrictive measures adopted by the Council of the European Union or Member States, or longer if required by specific regulations.

5. The [insert name of CB]’s own books and records shall be accepted as a means of evidence of any obligations of the participants and of any facts and events that the parties rely on.

Article 24

Duration and ordinary termination of participation and closure of accounts

1. Without prejudice to Article 25, participation in TARGET-[insert CB/country reference] shall be for an indefinite period of time.

2. A participant may terminate any of the following at any time giving 14 business days’ notice thereof, unless it agrees a shorter notice period with the [insert name of CB]: (a) its entire participation in TARGET-[insert CB/country reference]; (b) one or more of its DCAs, RTGS AS technical accounts and/or TIPS AS technical accounts; (c) one or more of its MCAs, provided that it continues to comply with Article 5.

3. The [insert name of CB] may terminate any of the following at any time giving three months’ notice thereof, unless it agrees a different notice period with the relevant participant: (a) a participant’s entire participation in TARGET-[insert CB/country reference]; (b) one or more of a participant’s DCAs, RTGS AS technical accounts or TIPS AS technical accounts; (c) one or more of a participant’s MCAs, provided that the participant continues to hold at least one MCA.

4. On termination of participation, the confidentiality duties laid down in Article 28 shall remain in force for a period of five years starting on the date of termination.

5. On termination of participation, the [insert name of CB] shall close all TARGET accounts of the participant concerned in accordance with Article 26.

Article 25

Suspension and extraordinary termination of participation

1. A participant’s participation in TARGET-[insert CB/country reference] shall be immediately terminated without prior notice or suspended if one of the following events of default occurs: (a) the opening of insolvency proceedings; and/or (b) the participant no longer meets the access criteria laid down in Article 4.

For the purposes of this paragraph, the taking of crisis prevention measures or crisis management measures within the meaning of Directive 2014/59/EU against a participant shall not automatically qualify as the opening of insolvency proceedings.

2. The [insert name of CB] may terminate without prior notice or suspend the participant’s participation in TARGET-[insert CB/country reference] if: (a) one or more events of default (other than those referred to in paragraph 1) occur; (b) the participant is in material breach of any of these Conditions; (c) the participant fails to carry out any material obligation to the [insert name of CB]; (d) the participant ceases to have a valid agreement with an NSP to provide the necessary connection to TARGET; (e) any other participant-related event occurs which, in the [insert name of CB]’s assessment, would threaten the overall stability, soundness and safety of TARGET-[insert CB/country reference] or of any other TARGET component system, or which would jeopardise the [insert name of CB]’s performance of its tasks as described in [refer to relevant national law] and the Statute of the European System of Central Banks and of the European Central Bank, or poses risks on the grounds of prudence; (f) an NCB suspends or terminates the participant’s access to intraday credit, including auto-collateralisation, pursuant to Part II, Article 13; and/or (g) the participant is excluded from or otherwise ceases to be a member of one of the NSP Closed Group of Users.

3. In exercising its discretion under paragraph 2, the [insert name of CB] shall take into account, inter alia, the seriousness of the event of default or events mentioned in points (a) to (c) of paragraph 2.

4. In the event that the [insert name of CB] suspends or terminates a participant’s participation in TARGET-[insert CB/country reference] under paragraphs 1 or 2, the [insert name of CB] shall without undue delay inform – by means of a broadcast message or, if that is not available, by any other appropriate means of communication – the respective participant, other CBs and participants in all of the TARGET component systems of such suspension or termination. Such message shall be deemed to have been issued by the home CB of the respective participant.

5. Once a message issued under paragraph 4 has been received by the participants, they shall be deemed informed of the termination/suspension of a participant’s participation in TARGET-[insert CB/country reference] or another TARGET component system. The participants shall bear any losses arising from the submission of a cash transfer order to participants whose participation has been suspended or terminated if such cash transfer order was entered into TARGET-[insert CB/country reference] after receipt of the message.

Article 26

Closure of TARGET accounts by [insert name of CB] on termination of participation

On termination of a participant’s participation in TARGET-[insert CB/country reference] pursuant to either Article 24 or 25, the [insert name of CB] shall close the TARGET accounts of the participant concerned, after havingsettled or rejected any queued cash transfer orders, and made use of its rights of pledge and set-off under Article 27.

Article 27

The [insert name of CB]’s rights of pledge and set-off

1. [Insert if applicable: The [insert name of CB] shall have a pledge over the participant’s existing and future credit balances on its TARGET accounts, thereby collateralising any current and future claims arising out of the legal relationship between the parties.] (a) [Insert if applicable: A participant’s current and future claims towards the [insert name of the CB] arising from a credit balance on the TARGET accounts shall be transferred to the [insert name of the CB] as collateral, i.e. as a fiduciary transfer, for any current or future claim of the [insert name of the CB] towards the participant arising out of the [insert reference to the arrangement implementing these Conditions]. Such collateral shall be established by the mere fact that the funds have been credited to the participant’s TARGET accounts.] (b) [Insert if applicable: The [insert name of CB] shall have a floating charge over the participant’s existing and future credit balances on their TARGET accounts, thereby collateralising any current and future claims arising out of the legal relationship between the parties.]

2. [Insert if applicable: The [insert name of CB] shall have the right referred to in paragraph 1 even if its claims are only contingent or not yet due.]

3. [Insert if applicable: The participant, acting in its capacity as a TARGET account holder, hereby acknowledges the creation of a pledge in favour of [insert name of CB], with whom that account has been opened; this acknowledgement shall constitute the provision of pledged assets to the [insert name of CB] referred to under [insert relevant national adjective] law. Any amounts paid into the TARGET accounts whose balance is pledged shall, by the mere fact of being paid in, be irrevocably pledged, without any limitation whatsoever, as collateral security for the full performance of the secured obligations.]

4. On the occurrence of: (a) an event of default, referred to in Article 25(1); or (b) any other event of default or event referred to in Article 25(2) that has led to the termination or suspension of the participant’s participation, notwithstanding the commencement of any insolvency proceedings in respect of a participant and notwithstanding any assignment, judicial or other attachment or other disposition of or in respect of the participant’s rights,

all obligations of the participant shall be automatically and immediately accelerated, without prior notice and without the need for any prior approval of any authority, so as to be immediately due. In addition, the mutual obligations of the participant and the [insert name of CB] shall automatically be set off against each other, and the party owing the higher amount shall pay to the other the difference.

5. The [insert name of CB] shall promptly give the participant notice of any set-off pursuant to paragraph 4 after such set-off has taken place.

6. The [insert name of CB] may without prior notice debit any participant’s TARGET accounts by any amount which the participant owes the [insert name of CB] resulting from the legal relationship between the participant and the [insert name of CB].

7. The provisions of this Article shall not create any right, pledge, charge or claim or set-off in respect of the following TARGET accounts used by AS: (a) TARGET accounts used in accordance with the AS settlement procedures under Part VI or Part VII; (b) TARGET accounts held by AS under Parts II to V, where funds held on such accounts do not belong to the AS but are held on behalf of their customers or are used to settle cash transfer orders on behalf of their customers.

Article 28

Confidentiality

1. The [insert name of CB] shall keep confidential all sensitive or secret information, including when such information relates to payment, technical or organisational information belonging to the participant, participants from the same group or the participant's customers, unless the participant or its customer has given its written consent to disclose [insert the following phrase if applicable under national law] or such disclosure is permitted or required under [insert adjective relating to country name] law].

2. By derogation from paragraph 1, the participant agrees that information on any action taken under Article 25 shall not be considered as confidential.

3. By derogation from paragraph 1, the participant agrees that the [insert name of CB] may disclose payment, technical or organisational information regarding the participant, participants from the same banking group or the participant's customers, obtained in the course of the operation of TARGET-[insert CB/country reference] to: (a) other CBs or third parties that are involved in the operation of TARGET-[insert CB/country reference], to the extent that this is necessary for the efficient functioning of TARGET or the monitoring of the participant's or its banking group's exposure; (b) other CBs in order to carry out the analyses necessary for market operations, monetary policy functions, financial stability or financial integration; or (c) supervisory, resolution and oversight authorities of Member States and the Union, including CBs, to the extent that this is necessary for the performance of their public tasks, and provided that in all such cases the disclosure is not in conflict with applicable law.

4. The [insert name of CB] shall not be liable for the financial and commercial consequences of disclosure made in accordance with paragraph 3.

5. By derogation from paragraph 1 and provided that this does not make it possible, whether directly or indirectly, to identify the participant or the participant's customers, the [insert name of CB] may use, disclose or publish payment information regarding the participant or the participant's customers for statistical, historical, scientific or other purposes in the exercise of its public functions or of functions of other public entities to which the information is disclosed.

6. Information relating to the operation of TARGET-[insert CB/country reference] to which participants have had access may only be used for the purposes laid down in these Conditions. Participants shall keep such information confidential, unless the [insert name of CB] has explicitly given its written consent to disclose. Participants shall ensure that any third parties to whom they outsource, delegate or subcontract tasks which have or may have an impact on the performance of their obligations under these Conditions are bound by the confidentiality requirements in this Article.

7. The [insert name of CB] shall be authorised, in order to settle cash transfer orders, to process and transfer the necessary data to the NSP.

Article 29

Data protection, prevention of money laundering, administrative or restrictive measures and related issues

1. Participants shall be deemed to be aware of, shall comply with, and shall be able to demonstrate that compliance to the relevant competent authorities with all obligations on them relating to legislation on data protection. They shall be deemed to be aware of, and shall comply with all obligations on them relating to legislation on prevention of money laundering and the financing of terrorism, proliferation-sensitive nuclear activities and the development of nuclear weapons delivery systems, in particular in terms of implementing appropriate measures concerning any payments debited or credited on their TARGET accounts. Participants shall ensure that they are informed about their chosen NSP’s data retrieval policy prior to entering into the contractual relationship with the NSP.

2. Participants authorise the [insert name of CB] to obtain any information relating to them from any financial or supervisory authority or trade body, whether national or foreign, if such information is necessary for the participant’s participation in TARGET-[insert CB/country reference].

3. Participants, when acting as the payment service provider of a payer or payee, shall comply with all requirements resulting from administrative or restrictive measures imposed pursuant to Article 75 or 215 of the Treaty to which they are subject, including with respect to notification and/or the obtaining of consent from a competent authority in relation to the processing of transactions. In addition: (a) when the [insert name of CB] is the payment service provider of a participant that is a payer: (i) the participant shall make the required notification or obtain consent on behalf of the central bank that is primarily required to make notification or obtain consent, and shall provide the [insert name of CB] with evidence of having made a notification or having received consent; (ii) the participant shall not enter any cash transfer order for the transfer of funds to an account held by an entity different than the participant, into TARGET until it has obtained confirmation from the [insert name of CB] that the required notification has been made or the consent has been obtained by or on behalf of the payment service provider of the payee; (b) when the [insert name of CB] is a payment service provider of a participant that is a payee, the participant shall make the required notification or obtain consent on behalf of the central bank that is primarily required to make notification or obtain consent, and shall provide the [insert name of CB] with evidence of having made a notification or having received consent.

For the purposes of this paragraph, the terms ‘payment service provider’, ‘payer’ and ‘payee’ shall have the meanings ascribed to them in the applicable administrative or restrictive measures.

Article 30

Notices

1. Except where otherwise provided for in these Conditions, all notices required or permitted pursuant to these Conditions shall be sent by registered post, [if relevant – facsimile] or other electronic means if agreed bilaterally, or otherwise in writing. Notices to the [insert name of CB] shall be submitted to the head of the [insert payment systems department or relevant CB unit] of [insert name of CB], [include relevant address of CB] or to the [insert BIC address of the CB] or to [insert if relevant other electronic means that are bilaterally agreed]. Notices to the participant shall be sent to it at the address, [if relevant - facsimile number] or [insert relevant information if other electronic means are bilaterally agreed] or its BIC address as the participant may from time to time notify to the [insert name of CB].

2. To prove that a notice has been sent, it shall be sufficient to prove that the notice was sent either physically or by electronic means to the relevant addressee.

3. All notices shall be given in [insert relevant national language and/or ‘English’].

4. Participants shall be bound by all forms and documents of the [insert name of CB] that the participants have filled in and/or signed, including but not limited to reference data collection forms, as referred to in Article 5(2), point (a), and information provided under Article 11(5), which were submitted in compliance with paragraphs 1 and 2 and which the [insert name of CB] reasonably believes to have been received from the participants, their employees or agents.

Article 31

Contractual relationship with an NSP

1. In order to send to or receive from TARGET instructions and messages, participants shall: (a) conclude a contract with an NSP within the framework of the concession contract with that NSP in order to establish a technical connection to TARGET-[insert CB/country reference]; or (b) connect via another entity which has itself concluded a contract with an NSP within the framework of the concession contract with that NSP.

2. The legal relationship between a participant and the NSP shall be exclusively governed by the terms and conditions of the contract concluded between them.

3. The services to be provided by the NSP shall not form part of the services to be performed by the [insert name of CB] in respect of TARGET.

4. The [insert name of CB] shall not be liable for any acts, errors or omissions of the NSP (including its directors, staff and subcontractors), or for any acts, errors or omissions of third parties selected by participants to gain access to the NSP’s network.

Article 32

Amendment procedure

The [insert name of CB] may at any time unilaterally amend these Conditions, including the Appendices. Amendments to these Conditions, including the Appendices, shall be announced by means of [insert relevant means of announcement]. Amendments shall be deemed to have been accepted unless the participant expressly objects within 14 days of being informed of such amendments. In the event that a participant objects to the amendment, the [insert name of CB] is entitled immediately to terminate that participant’s participation in TARGET-[insert CB/country reference] and close any of its TARGET accounts.

Article 33

Third party rights

1. Participants shall not transfer, pledge or assign any rights, interests, obligations, responsibilities or claims arising from or relating to these Conditions to any third party without the [insert name of CB]’s written consent.

2. These Conditions do not create any rights in favour of or obligations in relation to any entity other than the [insert name of CB] and participants in TARGET-[insert CB/country reference].

Article 34

Governing law, jurisdiction and place of performance

1. The bilateral relationship between the [insert name of CB] and participants in TARGET-[insert CB/country reference] shall be governed by [insert adjective relating to country name] law.

2. Without prejudice to the competence of the Court of Justice of the European Union, any dispute arising from a matter relating to the relationship referred to in paragraph 1 falls under the exclusive competence of the competent courts of [insert place of the seat of the CB].

3. The place of performance concerning the legal relationship between the [insert reference to CB] and the participants shall be [insert place of the seat of the CB].

Article 35

Severability

If any provision in these Conditions is or becomes invalid, this shall not prejudice the applicability of all the other provisions of these Conditions.

Article 36

Entry into force and binding nature

1. These Conditions become effective from [insert relevant date].

2. [Insert if appropriate under relevant national law: By requesting to participate in TARGET-[insert CB/country reference], applicant participants automatically agree to these Conditions between themselves and in relation to the [insert name of CB].]

PART II

Special terms and conditions for main cash accounts (MCAS)

Article 1

Opening and management of an MCA

1. The [insert name of CB] shall open and operate at least one MCA for each participant, except where the participant is an AS that only uses RTGS or TIPS AS settlement procedures, in which case the use of an MCA shall be at the discretion of the AS

2. For the purpose of the settlement of monetary policy operations as set out in [insert reference to the General documentation], and the settlement of interest from such operations, the participant shall designate a primary MCA held with [insert name of CB].

3. The primary MCA designated in accordance with paragraph 2 shall also be used for the following purposes: (a) remuneration as set out in Part I, Article 12, unless the participant has designated another participant in TARGET-[insert CB/country reference] for that purpose; (b) the granting of intraday credit, where applicable.

4. Any negative balance on a primary MCA shall not be lower than the credit line (if granted). There shall be no debit balance on an MCA that is not a primary MCA.

Article 2

Co-management of an MCA

1. On the request of an MCA holder the [insert name of CB] shall allow an MCA held by that MCA holder to be co-managed by one of the following: (a) another MCA holder in TARGET-[insert CB/country reference]; (b) an MCA holder in another TARGET component system; (c) [[insert name of CB] if applicable].

If the MCA holder holds more than one MCA, each MCA held may be co-managed by a different co-manager.

The co-manager shall have the same rights and privileges in relation to an MCA that it co-manages as it has in relation to its own MCA.

2. The MCA holder shall provide the [insert name of CB] with evidence of the consent of the co-manager to act in that capacity. [ to be included if 1(c) is used - ] Such evidence of consent to act shall not be required where the co-manager is [insert name of CB.]

3. An MCA holder acting as co-manager shall fulfil the obligations of the MCA holder of the co-managed MCA under Part I, Article 5(1), point (a), Part I, Article 10(4), and Part I, Article 31(1).

4. The MCA holder of a co-managed MCA shall fulfil the obligations of a participant under Part I and Part II in respect of the co-managed MCA. In the event that the MCA holder does not have a direct technical connection to TARGET, Part I, Article 5(1), point (a), Part I, Article 10(4), and Part I Article 31(1) shall not apply.

5. Part I, Article 7 shall apply to an MCA holder that designates an entity to act as co-manager of an MCA holder’s MCA pursuant to this Article.

6. The MCA holder shall [immediately] notify the [insert name of CB] if the co-manager ceases to act or the co-management arrangement between the MCA holder and the co-manager is terminated.

Article 3

MCA liquidity transfer group

1. On the request of an MCA holder the [insert name of CB] shall create an MCA liquidity transfer group, for the purpose of enabling the processing of MCA-to-MCA liquidity transfer orders.

2. On the request of an MCA holder the [insert name of CB] shall add one of the MCA holder’s MCAs to or delete it from an existing MCA liquidity transfer group created in TARGET-[insert CB/country reference] or another TARGET component system. The MCA holder shall inform all other MCA holders in that MCA liquidity transfer group before making such a request.

Article 4

Transactions processed via an MCA

1. The following transactions shall be processed via an MCA in TARGET-[insert CB/country reference]: (a) central bank operations; (b) liquidity transfer orders to and from overnight deposit accounts opened by [insert name of CB] in the name of the participant; (c) liquidity transfer orders to another MCA within the same MCA liquidity transfer group; (d) liquidity transfer orders to a T2S DCA, TIPS DCA or RTGS DCA, or to a sub-account thereof.

2. The following transaction may be processed via an MCA in TARGET-[insert CB/country reference]: (a) [insert if required [cash transfer orders resulting from lodgements and withdrawals.]]

Article 5

Liquidity transfer orders

1. An MCA holder may submit a liquidity transfer order as one of the following: (a) an immediate liquidity transfer order, which shall be an instruction for execution immediately; (b) a standing liquidity transfer order, which shall be an instruction for the recurring execution of the transfer of a specified amount on the occurrence of a predefined event each business day.

Article 6

Rule-based liquidity transfer orders

1. An MCA holder may specify a floor and/or a ceiling amount for its MCA.

2. By setting a ceiling and opting for a rule-based liquidity transfer order, if, following the settlement of a payment order, the ceiling is breached, the MCA holder instructs [insert name of CB] to execute a rule-based liquidity transfer order that credits an RTGS DCA or another MCA within the same MCA liquidity transfer group designated by that MCA holder. The credited RTGS DCA or MCA may be in TARGET-[insert CB/country reference] or another TARGET component system.

3. By setting a floor and opting for a rule-based liquidity transfer order, if, following the settlement of a payment order, the floor is breached, a rule-based liquidity transfer order is initiated which debits an RTGS DCA or another MCA within the same MCA liquidity transfer group designated by that MCA holder. The debited RTGS DCA or MCA may be in TARGET-[insert CB/country reference] or another TARGET component system. The holder of the RTGS DCA or MCA to be debited must authorise its account to be debited in this manner.

4. An MCA holder may authorise its MCA to be debited in the event that a floor is breached in one or more specified RTGS DCAs or MCAs within the same liquidity transfer group in TARGET-[insert CB/country reference] or another TARGET component system. By authorising its account to be debited, the MCA holder instructs [insert name of CB] to execute a rule-based liquidity transfer order that credits the RTGS DCA(s) or MCA(s) whenever the floor is breached.

5. An MCA holder may authorise its MCA to be debited in the event that there is insufficient liquidity on an RTGS DCA designated for the purpose of automated liquidity transfer orders under Part III, Article 1(5) and (6) to settle urgent payment orders, AS transfer orders or high priority payment orders. By authorising its account to be debited, the MCA holder instructs [insert name of CB] to execute a rule-based liquidity transfer order that credits its RTGS DCA.

Article 7

Processing of cash transfer orders

1. Cash transfer orders, once accepted, shall settle immediately provided that ther