2005/88/EC:Guideline of the European Central Bank of 21 January 2005 amending Guideline ECB/2001/3 on a trans-European automated real-time gross settlement express transfer system (Target) (ECB/2005/1)
Date: 2005-01-21
Institutions: European Central Bank
Subjects: European Central Bank, capital transfer, central bank, electronic banking, intra-EU payment, trans-European network

3.2.2005

EN

Official Journal of the European Union

L 30/21

EUROPEAN CENTRAL BANK

GUIDELINE OF THE EUROPEAN CENTRAL BANK

of 21 January 2005

amending Guideline ECB/2001/3 on a trans-European automated real-time gross settlement express
transfer system (Target)

(ECB/2005/1)

(2005/88/EC)

THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,

HAS ADOPTED THIS GUIDELINE:

Having regard to the Treaty
establishing the European
Community, and in particular the first and fourth indents of
Article 105(2) thereof,

Article 1

Guideline ECB/2001/3 is amended as follows:

Having regard to the Statute of the European System of Central
Banks and of the European Central Bank, and in particular
Articles 3.1, 12.1, 14.3, 17, 18 and 22 thereof,

1. Article 1 is amended as follows:

On 24 October 2002 the Governing Council of
the
European Central Bank (ECB) took note of a number
of different options permitting central banks to connect
it was
to Target other than via interlinking. Further,
decided that following the accession to the EU of the
10 new Member States on 1 May 2004, the central
banks of such Member States would be given the same
rights and obligations regarding connection to Target as
other central banks pursuant to one of these options.
This has necessitated the amendment of Guideline
ECB/2001/3 on a trans-European automated real-time
gross settlement express transfer system (Target) (1).

(a)

the following definitions are inserted, having regard to
alphabetical order:

‘ “connected NCB” shall mean an NCB real-time gross
(RTGS) system of which is connected to
settlement
TARGET via a service-providing NCB,

“non-participating Member States”
shall mean the
Member States which have not adopted the single
currency in accordance with the Treaty,

“service-providing NCB” shall mean an NCB: (i) the RTGS
system of which is connected to Target via interlinking;
and (ii) which provides services to a connected NCB for
payments within
cross-border
the
TARGET, thereby establishing a bilateral link,’;

processing

of

A further minor amendment of Guideline ECB/2001/3 is
required to reflect current practice regarding access of
participants to Target.

(b) the definition of ‘EEA’ is replaced by the following:

In accordance with Article 12.1 and Article 14.3 of the
Statute, ECB guidelines
form an integral part of
Community law,

(1) OJ L 140, 24.5.2001, p. 72. Guideline as last amended by Guideline

ECB/2004/4 (OJ L 205, 9.6.2004, p. 1).

‘ “EEA” shall mean the European Economic Area as
defined in the Agreement on the European Economic
Area concluded on 2 May 1992 between the European
Community and its Member States and the Member
States of
the European Free Trade Association, as
amended,’;

Whereas:

(1)

(2)

(3)

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(c)

the definition of ‘finality’ or ‘final’
following:

is replaced by the

‘Article 2

Description of Target

‘ “finality” or “final” shall mean that the settlement of a
payment order cannot be revoked, reversed or made void
by the connected NCB, by the sending NCB/ECB, by the
sending participant or by any third party, or even in the
event of
insolvency proceedings against a participant,
except in cases of imperfections in the underlying trans-
action(s) or payment order(s) arising from criminal
fraudulent acts (whereby fraudulent acts
offences or
shall
at
also include preferences
under-value during suspect periods
in the case of
insolvency) provided that such has been decided on a
case-by-case basis by a court of competent jurisdiction
or another competent dispute resolution body, or arising
from error,’;

and transactions

(d) the definition of ‘inter-NCB accounts’ is replaced by the

following:

‘ “inter-NCB accounts” shall mean the accounts that,
without prejudice to Article 4a of this Guideline, each
NCB and the ECB shall open for each other on their
the operation of cross-border
respective books
Target payments; each such inter-NCB account is held
for the benefit of the ECB or the NCB in whose name
the account is opened,’;

for

The

trans-European
transfer

1.
automated
gross
system is a real-time gross
settlement express
settlement system for the euro. Target is composed of the
national RTGS systems, the ECB payment mechanism and
interlinking. RTGS systems may connect to Target via inter-
linking or through a bilateral link.

real-time

2.
The RTGS systems of non-participating Member States
may connect to Target in so far as such RTGS systems
in
comply with the minimum common features set out
Article 3 and are able to process the euro alongside their
respective national currency. Any connection to Target of an
RTGS system of a non-participating Member State is subject
to an agreement whereby the national
central banks
concerned agree to adhere to the rules and procedures for
Target referred to in this Guideline (with specifications and
modifications, where appropriate, as referred to in such an
agreement).’

3. Article 3 is amended as follows:

(a)

the following point (a)(1)(v) is added:

‘(v) central banks established in the EU,

the RTGS
systems of which are not connected to TARGET.’;

(e)

‘malfunctioning of a national RTGS
the definition of
system’ or ‘malfunctioning of Target’ or ‘malfunctioning’
is replaced by the following:

(b) paragraph (b) is replaced by the following:

‘(b) Currency unit

“malfunctioning”

a national RTGS system” or
‘ “malfunctioning of
“malfunctioning of Target” or
shall
mean technical difficulties, defects or failures in the
technical infrastructure and/or the computer systems of
any national RTGS system or
the ECB payment
mechanism or the computerised network connections
link, or any other event
for interlinking or a bilateral
related to any national RTGS system or
the ECB
link,
payment mechanism,
that makes it impossible to execute and complete the
same day processing of payment orders within Target;
the definition shall also cover cases where a malfunc-
than one
tioning occurs
simultaneously
national RTGS
a
instance,
system (due
breakdown related to the network service provider),’;

interlinking or any bilateral

in more
to,

for

(f)

the definition of ‘standing facilities’
following:

is replaced by the

‘ “standing facilities” shall mean the marginal
lending
facility and the deposit facility provided by the Euro-
system.’

2. Article 2 is replaced by the following:

All cross-border payments shall be in euro.’;

(c) paragraph (c)(3) is replaced by the following:

‘3. Any cross-border payments effected within TARGET
shall be subject to a common price established by the
the ECB and specified in
Governing Council of
Annex III.’;

(d) paragraph (f)(3) is replaced by the following:

‘3.

rules as

Intraday credit shall be based on adequate collateral.
Eligible collateral
shall be the same assets and
instruments and be subject to the same valuation
those prescribed for
and risk control
eligible collateral
for monetary policy operations.
Except for treasury departments and public sector
bodies referred to respectively in Article 3(a)(1)(i)
and (ii), an NCB shall not accept as underlying
assets debt instruments issued or guaranteed by the
participant, or by any other entity with which the
counterparty has close links, as defined in Article
1(26) of Directive 2000/12/EC and as applied for
monetary policy operations.

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Each of the national central banks of the non-parti-
cipating Member States the RTGS systems of which
are connected to Target pursuant to Article 2(2) is
allowed to establish and maintain a list of eligible
assets which can be used by institutions participating
in their relevant national RTGS system connected to
Target to collateralise euro credits granted by such
national central banks, provided that the assets on
such list meet the same quality standards and are
subject to the same valuation and risk control rules
as
for
monetary policy operations. The national central
bank in question shall submit such list of eligible
assets for prior approval by the ECB.’

those prescribed for

collateral

eligible

4. Article 4 is amended as follows:

(a)

the title is replaced by the following:

‘Arrangements for cross-border payments effected
via interlinking’;

(b) the introductory paragraph is replaced by the following:

‘The provisions of
this Article shall apply to the
arrangements for cross-border payments effected or to
be effected via interlinking.’;

(c) paragraph (b)(3) is replaced by the following:

crediting/debiting of
cipant’s RTGS account.

the

receiving/sending parti-

(b) Opening and operation of an account for the connected

NCB.

1. The service-providing NCB shall open an account in

euro on its books for the connected NCB.

2. The service-providing NCB shall grant an unlimited
and uncollateralised credit facility to the connected
NCB.

in the connected NCB’s RTGS system,

3. To effect cross-border payments initiated by a parti-
the
cipant
the connected
service-providing NCB shall debit
NCB’s account and credit an RTGS account of the
service-providing NCB’s participant or credit
the
receiving NCB/ECB’s inter-NCB account held with
the service-providing NCB. To effect cross-border
payments to a participant in the connected NCB’s
RTGS system, the service-providing NCB shall debit
the sending NCB/ECB’s inter-NCB account or debit an
RTGS account of the service-providing NCB’s parti-
cipant and credit the connected NCB’s account.

(c) Obligations and liabilities of the service-providing NCB

and the connected NCB

‘3. All inter-NCB accounts shall be maintained in euro.’

1. Verification

5. The following Article 4a is inserted:

‘Article 4a

for
Arrangements
through a service-providing NCB

cross-border payments

effected

The provisions of this Article shall apply to the arrangements
for cross-border payments effected or to be effected through
a bilateral link.

(a) Description of the connection

When effecting a cross-border payment
bilateral link:

through a

— the service-providing NCB shall be regarded as the
receiving or sending NCB, as the case may be, as
regards the obligations and liabilities relating to the
the cross-border payment via inter-
processing of
linking vis-à-vis either
receiving
the sending or
NCB/ECB,

— the connected NCB shall be regarded as the receiving
NCB or the sending NCB, as the case may be, as
regards the obligations and liabilities relating to the

(a) Both the

connected NCB and the
responsible

service-
the
for
providing NCB shall be
accuracy and syntax of
the data which they
provide to each other, and they shall agree
standards to be applied to such data.

(b) On receipt of a payment order submitted by the
connected NCB, the service-providing NCB shall
check without delay all the details contained in
the payment order which are necessary for its
the service-providing
If
appropriate processing.
NCB detects syntactical errors or other grounds
for rejecting a payment order, it shall not process
such a payment order and shall handle the data
in accordance with
and the payment order
specific rules to be agreed between the service-
providing NCB and the connected NCB.

2. Settlement

in the

(a) To effect a cross-border payment initiated by a
connected NCB’s RTGS
participant
system, the connected NCB shall debit its parti-
cipant’s account and,
in accordance with the
terms
between the
and
connected NCB and the service-providing NCB,
submit a corresponding payment order to the
service-providing NCB.

conditions

agreed

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(b) As

soon as

the

checked the validity of
submitted pursuant
service-providing NCB shall without delay:

service-providing NCB has
the payment order
the

to Article 4a(c)(1)(b),

(g) The hours of operation of the connected NCB’s
RTGS system shall comply with the specifications
laid down in Annex IV.

(i) debit the connected NCB’s account; and

3. Finality

(ii) send a positive acknowledgement

to the

connected NCB.

(c) On debiting the connected NCB’s account,

the participant

the
service-providing NCB shall without delay credit
the RTGS account of
in its
national RTGS system or process the payment
order via interlinking in accordance with Article
4. When the service-providing NCB receives a
positive or negative acknowledgement from the
receiving NCB/ECB it
forward such an
acknowledgement to the connected NCB.

shall

(d) To effect a cross-border payment, which has been
initiated by a participant in the service-providing
NCB’s RTGS system,
in the
connected NCB’s RTGS system,
service-
providing NCB shall credit the connected NCB’s
immediately on receipt of
account
such a
payment
connected NCB shall
order. The
thereafter immediately credit the account of the
participant in the connected NCB’s RTGS system.

to a participant
the

(e) To effect a cross-border payment, which has been
initiated by a participant in an RTGS system other
than the service-providing NCB’s RTGS system, to
in the connected NCB’s RTGS
a participant
system,
service-providing NCB shall, on
the
receipt of a payment order from the sending
NCB/ECB:

(i) carry out the procedures described in Article

4(d)(1) and 4(d)(2)(a);

(ii) thereafter credit the connected NCB’s account
and notify the connected NCB thereof; and

(iii) thereafter send a positive acknowledgement

to the sending NCB/ECB.

On receipt of notification pursuant to point (ii),
immediately credit the
the connected NCB shall
account of a participant in its RTGS system.

(f) The service-providing NCB shall take all necessary
measures, as agreed with the connected NCB, in
order to ensure that all
information and data
necessary to credit the account of the participant
in the connected NCB’s RTGS system in any
circumstances
the
connected NCB.

are made

available

to

The finality of
through a bilateral
accordance with the rules
4(c)(2) and 4(d)(2).

cross-border payments processed
link shall be determined in
laid down in Articles

4. Transfer of

responsibility for

the execution of a

payment order

For cross-border payments initiated by a participant
in the connected NCB’s RTGS system, responsibility
for the execution of a payment order shall pass from
the connected NCB to the service-providing NCB at
the moment the connected NCB’s account with the
service-providing NCB is debited, and thereafter it
shall pass to the receiving NCB/ECB in accordance
with Article 4(e). For cross-border payments to a
in the connected NCB’s RTGS system,
participant
responsibility for the execution of a payment order
shall pass from the sending NCB to the service-
providing NCB on receipt by the sending NCB/ECB
of a positive acknowledgement as described in Article
4a(c)(2)(e)(iii).

(d) Regime for errors

The regime specified in Article 4(f)
connected NCBs.

shall apply to

(e) Relation to the network service provider

The connected NCB shall be connected or have an entry
point to the network service provider. It shall be the
connected NCB’s responsibility to claim compensation
from the network service provider
the connected
NCB suffers loss as a result of a breach of such rules
and the connected NCB shall submit any claim directly
to the network service provider.

if

(f)

Information to participants

All NCBs shall inform participants in their RTGS systems
that a positive acknowledgement issued by a service-
providing NCB in relation to cross-border payments to
participants in a connected NCB’s RTGS system certifies
the crediting of the connected NCB’s account with the
service-providing NCB but does not certify the crediting
of a receiving participant’s account with the connected
NCB. To the extent necessary, the NCBs shall amend
their national RTGS rules accordingly.’

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6. Article 8 is amended as follows:

(a) Paragraph 1(b) is replaced by the following:

‘(b) The Target Compensation Scheme shall apply to all
national RTGS systems (regardless of whether such
RTGS systems are connected to Target via inter-
linking or through a bilateral link) and to the ECB
payment mechanism (EPM) and shall be available for
all Target participants (including Target participants
of national RTGS systems of participating Member
States that are not counterparties to the Eurosystem
monetary policy operations, and Target participants
of national RTGS systems of non-participating
Member States) in relation to all Target payments
(without distinguishing between domestic payments
and cross-border payments). The Target Compen-
sation Scheme shall not apply to customers in the
EPM in accordance with the Terms and Conditions
governing the use of the EPM, which are available
on the ECB’s web site (www.ecb.int) and are updated
from time to time.’;

(b) the following paragraph 1(c)a is inserted:

‘(c)a For the purposes of Article 8(1)(c)(ii), a service-
providing NCB shall not be regarded as a third
party.’;

(including,

for so long as, there is an inability to perform the obligations
in question under the Guideline, or such obligations are
subject to suspension or delay, owing to the occurrence of
any event arising from any reason or cause beyond
to,
reasonable
control
failure or malfunction, acts of God, natural
equipment
disasters,
the
above shall not prejudice the responsibility to have in
place the back-up facilities required by this Guideline, to
referred to in
carry out
Articles 4(f) and 4a(d), as far as possible despite the force
majeure event, and to use all reasonable efforts to mitigate
the effects of any such event while it is taking place.’

labour disputes); provided that

the error-handling procedures,

strikes or

limited

not

but

8. In Article 10, paragraph 2 is replaced by the following:

‘2.
In the event of such a dispute between NCBs, or
between an NCB and the ECB, the respective rights and
obligations to one another in relation to payment orders
processed through TARGET and all other matters referred
to in this Guideline shall be determined:
(i) by the rules
and procedures
referred to in this Guideline and its
Annexes; and (ii) as a supplementary source in disputes
concerning cross-border payments, by the laws of
the
Member State of the seat of the receiving NCB/ECB.’

9. Annex IV is replaced by the Annex to this Guideline.

Article 2

(c)

the following paragraph 1(f) is added:

This Guideline shall enter into force on 25 January 2005.

‘(f)

If a connected NCB cannot process cross-border
payments due to a malfunctioning of the service-
providing NCB’s RTGS system, the service-providing
NCB shall be regarded as the malfunctioning NCB in
relation to such payments.’

7. Article 9 is replaced by the following:

‘Article 9

Force majeure

There shall be no liability on the part of the NCBs/ECB for
non-compliance with this Guideline to the extent that, and

It shall apply from 7 March 2005.

Article 3

This Guideline is addressed to the national central banks of
participating Member States.

Done at Frankfurt am Main, 21 January 2005.

For the Governing Council of the ECB
The President of the ECB

Jean-Claude TRICHET

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ANNEX

‘ANNEX IV

TARGET HOURS OF OPERATION

TARGET and, therefore, NCBs and national RTGS systems participating in or connected to TARGET applies the following
rules with respect to the time of operation.
1. The reference time for TARGET is ‘European Central Bank time’, defined as the local time at the seat of the ECB.

2. TARGET will have common operating hours from 07:00 to 18:00.

3. Early opening, before 07:00, may take place after prior notification has been sent to the ECB:

(i) for domestic reasons (e.g.

in order to facilitate settlement of securities transactions, to settle balances of net
settlement systems, or to settle other domestic transactions, such as batch transactions channelled by NCBs
into RTGS systems during the night); or

(ii) for ESCB-related reasons (e.g. on days when exceptional payment volumes are expected, or in order to reduce
foreign exchange deals involving Asian

foreign exchange settlement risk when processing the euro leg of
currencies).

4. A cut-off time for customer payments (both domestic and cross-border (1)) of one hour before the normal TARGET
closing time will apply; the remaining time will be used only for interbank payments (both domestic and cross-
border (2)) to transfer liquidity between participants. Customer payments are defined as payment messages in the
MT100 format, or equivalent national message format (which would use the MT100 format for cross-border trans-
mission). The implementation of the 17:00 cut-off time for domestic payments is to be decided by each NCB in
cooperation with its banking community. In addition, NCBs may continue to process domestic customer payments
that were in a queue at 17:00.

(1) The cut-off time for cross-border customer payments sent from a participant in a connected NCB's RTGS system via a service-providing

NCB is 16:52:30.

(2) The cut-off time for cross-border interbank payments sent from a participant in a connected NCB's RTGS system via a service-

providing NCB is 17:52:30.’