Guideline of the European Central Bank of  30 December 2005  on a Trans-European Automated Real-time Gross settlement Express Transfer system (TARGET) ( ECB/2005/16 )
Date: 2005-12-30
Institutions: European Central Bank
Subjects: European Central Bank, capital transfer, central bank, electronic banking, intra-EU payment, trans-European network

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(Acts whose publication is not obligatory)

EUROPEAN CENTRAL BANK

GUIDELINE OF THE EUROPEAN CENTRAL BANK

of 30 December 2005

on a Trans-European Automated Real-time Gross settlement Express Transfer system (TARGET)

(ECB/2005/16)

(2006/21/EC)

THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,

and verification of this Guideline should be limited to the
abovementioned amendments.

Having regard to the Treaty establishing the European
Community and in particular to the first and fourth indents
of Article 105(2) thereof and to Articles 3.1, 12.1, 14.3, 17, 18
and 22 of the Statute of the European System of Central Banks
and of the European Central Bank,

Whereas:

(1) The Trans-European Automated Real-time Gross settle-
ment Express Transfer system (TARGET) is governed by a
legal framework which has applied from the starting date
of the third stage of economic and monetary union.
Guideline ECB/2001/3 of 26 April 2001 on a Trans-
European Automated Real-time Gross settlement Express
(1) has already been amended
Transfer system (TARGET)
several times since its adoption and should be recast in
the interests of clarity and transparency.

(2)

to reflect

In order
the latest developments in the
TARGET legal framework, this Guideline also incorpo-
rates a number of necessary amendments concerning the
removal of participants from real-time gross settlement
(RTGS) systems, access to TARGET by entities established
in third countries, TARGET operating days, the definition
of close links, the suspension of access to intraday credit
and the dispute resolution procedure. Implementation

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

Guideline ECB/2005/1 (OJ L 30, 3.2.2005, p. 21).

(3) The first indent of Article 105(2) of the Treaty and the
first indent of Article 3.1 of the Statute state that one of
the basic tasks to be carried out through the European
to define and
System of Central Banks
implement the monetary policy of the Community.

(ESCB)

is

(4) The fourth indent of Article 105(2) of the Treaty and the
fourth indent of Article 3.1 of the Statute state that
another of the basic tasks to be carried out through the
ESCB is to promote the smooth operation of payment
systems.

(5) Article 22 of the Statute states that the European Central
Bank (ECB) and national central banks may provide
facilities to ensure efficient and sound clearing and
payment systems within the Community and with other
countries.

(6) The achievement of a single monetary policy entails the
need for payment arrangements through which the
monetary policy operations between national central
banks and credit institutions can be effected in a timely
and secure manner, and which will foster the singleness
of the money market within the euro area.

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(7)

Such objectives warrant a payment arrangement that
operates with a high level of security, within very short
processing times and at low cost.

(8)

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

— ‘public sector body’ shall mean an entity within the
‘public sector’ as defined in Article 3 of Council
Regulation (EC) No 3603/93 of 13 December 1993
specifying definitions for the application of the prohibi-
tions referred to in Articles 104 and 104b(1) of the
Treaty (2) ,

HAS ADOPTED THIS GUIDELINE:

Article 1

Definitions

1.

For the purposes of this Guideline:

— ‘NCBs’

shall mean the national

central banks of

participating Member States,

— ‘national RTGS systems’ shall mean those RTGS systems
which are component parts of TARGET as identified in
Annex I to this Guideline,

— ‘ECB payment mechanism’ shall mean the payment
arrangements organised within the ECB and connected to
TARGET for
the purpose of effecting (i) payments
between accounts held at the ECB; and (ii) payments
through TARGET between accounts held at the ECB and
at the NCBs,

— ‘interlinking’ shall mean the technical

infrastructures,
design features and procedures which are put in place
within, or constitute adaptations of, each national RTGS
system and the ECB payment mechanism for the purpose
of processing cross-border payments within TARGET,

— ‘non-participating Member States’

shall mean the
Member States which have not adopted the single
currency in accordance with the Treaty,

— ‘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 (1),

— ‘participants’ or

‘direct participants’ shall mean the
entities which have direct access to a national RTGS
system and have an RTGS account with the NCB
concerned (or,
the ECB payment
mechanism, with the ECB) and shall include such NCB
or the ECB, whether in its capacity as settlement agent or
otherwise,

in the case of

— ‘investment

firm’ shall mean an investment

firm as
defined in Article 4(1)(1) of Directive 2004/39/EC of the
European Parliament and of the Council of 21 April
2004 on markets in financial
instruments amending
Council Directives 85/611/EEC and 93/6/EEC and
Directive 2000/12/EC of the European Parliament and
of the Council and repealing Council Directive 93/22/
EEC (3) with the exclusion of the entities mentioned in
Article 2(1) of Directive 2004/39/EC, provided that the
investment firm in question is entitled to carry out the
activities referred to under items 2, 3, 6 and 7 of Section
A of Annex I to Directive 2004/39/EC,

— ‘RTGS rules’ shall mean the regulations and/or contrac-
tual provisions which apply to a national RTGS system,

— ‘Eurosystem’ shall mean the ECB and the national central
banks of the Member States which have adopted the
single currency in accordance with the Treaty,

— ‘cross-border payments’ shall mean payments effected or
to be effected between two national RTGS systems or
between a national RTGS system and the ECB payment
mechanism,

— ‘domestic payments’ shall mean payments effected or to
be effected within one national RTGS system or within
the ECB payment mechanism,

— ‘payment order’

shall mean an instruction by a
participant in accordance with the applicable RTGS rules
to place at
the disposal of a receiving participant,
including an NCB or the ECB, an amount of money by
means of a book entry on an RTGS account,

— ‘sending participant’ shall mean the participant which
has initiated a payment by giving a payment order,

— ‘sending NCB/ECB’ shall mean the ECB or the NCB at
its RTGS

which the sending participant maintains
account,

— ‘intraday credit’ shall mean credit extended and reim-
bursed within a period of less than one business day,

(1) OJ L 1, 3.1.1994, p. 3.

(2) OJ L 332, 31.12.1993, p. 1.
(3) OJ L 145, 30.4.2004, p. 1.

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— ‘RTGS account’ shall mean an account (or, to the extent
permitted in accordance with the relevant RTGS rules in
question, any group of consolidated accounts, provided
that all such account holders are jointly and severally
liable vis-à-vis the RTGS system in case of default)
opened in the name of a participant on the books of an
NCB or the ECB on which domestic payments and/or
cross-border payments are settled,

— ‘blocking-of-funds procedure’ shall mean the procedure
according to which funds on deposit or available credit
are earmarked and made unavailable for any transaction
or purpose other than the execution of the payment
order concerned, in order to ensure that the earmarked
funds or available credit will be used for the execution of
such payment order; the earmarking of funds or available
credit is referred to in this Guideline as ‘blocking’,

— ‘marginal

lending facility’

shall mean the marginal

lending facility organised by the Eurosystem,

— ‘marginal

lending rate’ shall mean the interest

rate
the Eurosystem

applicable from time to time for
marginal lending facility,

— ‘remote participant’ shall mean an institution established
in an EEA country which participates directly in a
national RTGS system of an (other) EU Member State
(host Member State) and, for that purpose, has an RTGS
account in euro in its own name with the NCB of the
host Member State, without necessarily having estab-
lished a branch in the host Member State, whereby a
‘branch’ shall mean a branch as defined in Article 1(3) of
Directive 2000/12/EC of the European Parliament and of
the Council of 20 March 2000 relating to the taking up
and pursuit of the business of credit institutions (1),

— ‘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
respective books for
the operation of cross-border
TARGET payments, each such inter-NCB account being
held for the benefit of the ECB or the NCB in whose
name the account is opened,

— ‘receiving NCB/ECB’ shall mean the ECB or the NCB at
which the receiving participant maintains its RTGS
account,

— ‘receiving participant’ shall mean the participant desig-
nated by the sending participant as the participant to
whose RTGS account
the amount specified in the
relevant payment order shall be credited,

— ‘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

in cases of

sending participant or by any third party, or even in the
event of insolvency proceedings against a participant,
except
imperfections in the underlying
transaction(s) or payment order(s) arising from criminal
offences or fraudulent acts (whereby fraudulent acts shall
also include preferences and transactions at undervalue
during suspect periods
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,

in the case of

— ‘network service provider’ shall mean the undertaking
appointed by the ECB to provide computerised network
connections for interlinking,

— ‘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
the processing of cross-border payments within TARGET,
thereby establishing a bilateral link,

— ‘connected NCB’ shall mean an NCB the RTGS system of
which is connected to TARGET via a service-providing
NCB,

— ‘malfunctioning of a national RTGS system’ or ‘mal-
functioning of TARGET’ or ‘malfunctioning’ 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 for interlink-
ing or a bilateral link, or any other event related to any
national RTGS system or the ECB payment mechanism,
interlinking or any bilateral link, 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 malfunctioning occurs simulta-
neously in more than one national RTGS system (due to,
for instance, a breakdown related to the network service
provider),

— ‘indirect participant’ shall mean an institution without its
own RTGS account which is nevertheless recognised by a
national RTGS system and subject to its RTGS rules and
which can be directly addressed in TARGET; all
transactions of an indirect participant are settled on the
account of a participant (as defined in this Article) which
has accepted to represent the indirect participant,

— ‘participating Member States’ shall mean Member States
which have adopted the single currency in accordance
with the Treaty,

(1) OJ L 126, 26.5.2000, p. 1. Directive as last amended by

Directive 2005/1/EC (OJ L 79, 24.3.2005, p. 9).

— ‘deposit facility’ shall mean the deposit facility organised

by the Eurosystem.

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2. The Annexes to this Guideline may be amended from
time to time by the Governing Council of the ECB. Additional
documents containing,
technical provisions and
inter alia,
specifications for TARGET may be adopted by the Governing
Council of the ECB, whereby such amendments and additional
documents shall enter into force as an integral part of this
Guideline on the date specified by the Governing Council of
the ECB, after communication to the NCBs.

Article 2

Description of TARGET

1. The Trans-European Automated Real-time Gross settle-
ment Express Transfer system is a real-time gross 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 interlinking or
through a bilateral link.

2. The RTGS systems of non-participating Member States
may connect to TARGET in so far as such RTGS systems
comply with the minimum common features set out in 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
and
modifications, where appropriate, as referred to in such an
agreement).

(with specifications

Article 3

Minimum common features of national RTGS systems

(iii)

investment firms;

(iv) organisations providing clearing or settlement
services subject to oversight by a competent
authority;

(v)

central banks established in the EU, the RTGS
systems of which are not connected to
TARGET.

2.

The criteria for access to a national RTGS system
and the procedure for the assessment thereof shall
be set out in the RTGS rules concerned and be made
available to interested parties. In addition to the
criteria mentioned in Article 3(a)(1), these national
criteria may include, inter alia:

— adequate financial strength,

— expected minimum number of transactions,

— the payment of an entry fee,

— legal, technical and operational aspects.

shall also require that

The RTGS rules
legal
opinions, based on the Eurosystem's harmonised
terms of reference for legal opinions, shall be
obtained in respect of applicants for review by the
relevant NCB as determined and specified by the
the ECB. The terms of
Governing Council of
reference for legal opinions shall be made available
by the respective NCB to interested parties.

Each NCB shall ensure that
system complies with the features set out below.

its respective national RTGS

3. A participant in a national RTGS system pursuant
to this Article 3(a)(1) and (2) shall have access to the
cross-border payment facilities of TARGET.

( a ) A c c e s s c r i t e r i a

1. Only supervised credit institutions, as defined in
Article 1(1) of Directive 2000/12/EC, which are
established in the EEA,
shall be admitted as
participants in a national RTGS system. As an
exception, and without prejudice to Article 7(1) of
this Guideline, the following entities may also be
admitted as participants in a national RTGS system
upon approval by the relevant NCB:

4.

RTGS rules shall contain the grounds and proce-
dures for removing a participant from the national
RTGS system concerned. The grounds for removing
a participant from a national RTGS system (by way
of suspension or expulsion) shall cover any event
which entails systemic risk or could otherwise cause
serious operational problems, including:

(i) where a participant enters into insolvency
proceedings, or where such proceedings are
impending;

(i)

treasury departments of central or regional
governments of Member States active in the
money markets;

(ii) where a participant is in breach of the RTGS

rules in question; or

(ii) public

sector bodies of Member

States

authorised to hold accounts for customers;

(iii) where one or more

for
participation in the relevant national RTGS
system are no longer fulfilled.

criteria

access

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5.

In addition to the above, entities of the types listed
in Article 3(a)(1) which are established in a country
with which the Community has entered into a
monetary agreement may also be admitted as
participants in a national RTGS system. Such access
shall only be given where it is provided for in the
relevant monetary agreement and shall be subject to
the conditions set out therein. Where relevant, and
subject to the individual monetary agreements, the
ECB may also at its discretion determine, on a case-
by-case basis, appropriate conditions as to partici-
pation in TARGET. These conditions may, inter alia,
be that it shall be evidenced to the ECB's satisfaction
that relevant aspects of the legal regime applying in
the country in which the entity that wishes to
participate is established are equivalent to relevant
Community legislation.

( b ) C u r r e n c y u n i t

All cross-border payments shall be in euro.

( c ) P r i c i n g r u l e s

1.

The pricing policy of the TARGET system shall be
determined by the Governing Council of the ECB
with reference to the principles of cost recovery,
transparency and non-discrimination.

2. Domestic payments in euro effected through the
national RTGS system shall be subject to the pricing
rules of
the national RTGS system concerned,
which, in turn, shall respect the policy on pricing
set out in Annex II.

( e ) P a y m e n t r u l e s

1. All payments directly resulting from or made in
connection with (i) monetary policy operations; (ii)
the settlement of the euro leg of foreign exchange
operations involving the Eurosystem; and (iii) the
settlement of
large-value netting
systems handling euro transfers shall be effected
through TARGET. Other payments may also be
effected through TARGET.

cross-border

2. A national RTGS system and the ECB payment
mechanism shall not process a payment order
unless sufficient funds are available on the account
of the sending participant with the sending NCB/
ECB, either through immediately available funds
through the
already credited to that account,
intraday mobilisation of reserves maintained to
fulfil
through intraday
credit granted by such NCB/ECB, as the case may
be, to that participant in accordance with Article 3
(f).

reserve requirements or

3.

RTGS rules and the rules for the ECB payment
mechanism shall specify the point in time at which
payment orders become irrevocable, which must
not be later than the point in time at which the
RTGS account of the sending participant held at the
sending NCB/ECB is debited with the amount
concerned. Where national RTGS systems apply a
blocking-of-funds procedure before debiting the
RTGS account, such irrevocability shall be provided
from that earlier point in time at which blocking
takes place.

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

( f )

I n t r a d a y c r e d i t

4.

Prices shall be made available to interested parties.

( d ) T i m e o f o p e r a t i o n

1. Operating days

TARGET as a whole shall be closed on Saturdays,
Sundays, New Year's Day, Good Friday and Easter
Monday (according to the calendar applicable at the
seat of the ECB), 1 May (Labour Day), Christmas
Day and 26 December.

1.

institutions

Subject to the provisions of this Guideline, each
NCB shall provide intraday credit to the supervised
referred to in Article 3(a)
credit
participating in the national RTGS system of such
NCB provided that any such credit institution is an
eligible counterparty for Eurosystem monetary
policy operations and has access to the marginal
lending facility, except if such credit institution's
access to intraday credit has been suspended further
to the procedures as set out
in this Guideline.
Provided that it is a clear condition that intraday
credit shall remain limited to the day in question
and that no extension to overnight credit shall be
possible, intraday credit may also be granted to:

2. Hours of operation

(i)

treasury departments referred to in Article 3(a)
(1)(i);

The hours of operation of national RTGS systems
in
shall comply with the specifications set out
Annex IV.

(ii) public sector bodies referred to in Article 3(a)

(1)(ii);

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(iii)

investment firms referred to in Article 3(a)(1)
(iii), on condition that any such investment
firm submits satisfactory written evidence that:

in
intraday repurchase transactions with NCBs
compliance with the criteria laid down below and
with the further minimum common features that
the Governing Council of the ECB may specify from
time to time.

(a)

(b)

either it has concluded a formal agree-
ment with a Eurosystem monetary policy
counterparty to cover any residual debit
position at the end of the day in question;
or

3.

access to intraday credit
is limited to
investment firms which hold an account
with a central securities depository, and
the investment firm in question is subject
to a liquidity deadline or the amount of
intraday credit is subject to a ceiling.

Should an investment firm for any reason be
unable to reimburse the intraday credit on
it shall be subject to penalties set in
time,
accordance with the following.
If such an
investment firm has a debit balance on its
RTGS account as at the close of business of
TARGET for the first time within any 12-
month period, then the following shall apply.
The relevant NCB shall promptly impose a
penalty on that participant calculated at a rate
five percentage points above the marginal
lending rate on the amount of such debit
balance. Should such an investment
firm
repeatedly be in such a debit position, then
the penalty interest
rate applied to that
participant would be increased by a further
2,5 percentage points each time such a debit
position were to occur within the 12-month
period referred to above;

(iv)

supervised credit
institutions referred to in
Article 3(a)(1), which are not eligible counter-
parties for Eurosystem monetary policy opera-
to the
tions and/or do not have access
marginal
lending facility. All provisions of
the penalty regime set out in Article 3(f)(1)(iii)
for investment firms shall apply identically to
such credit institutions when, for any reason,
they are unable to reimburse the intraday
credit on time;

(and subject

(v) organisations providing clearing or settlement
services
to oversight by a
competent authority) on condition that the
arrangements for granting intraday credit to
such organisations are submitted in advance to
the ECB for
the Governing Council of
approval.

2.

Each NCB shall provide intraday credit by means of
collateralised intraday overdrafts at the NCB and/or

Intraday credit shall be based on adequate collateral.
Collateral shall be the same assets and instruments
and be subject
to the same valuation and risk
control rules as those prescribed for eligible assets
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 the General Documentation on
Eurosystem Monetary Policy
and
procedures and applied for monetary policy opera-
tions.

Instruments

4.

The Governing Council of the ECB may exempt
treasury departments, referred to in Article 3(a)(1)
from the requirement of collateralisation in
(i),
relation to the provision of intraday credit set out in
Article 3(f)(3) upon a proposal from the relevant
NCB.

5.

Intraday credit provided in accordance with Article
3(f) shall be free of interest.

6.

Intraday credit shall not be granted to any remote
participant.

7.

RTGS rules shall contain the grounds on the basis of
which an NCB may suspend or
terminate a
participant's access to intraday credit. Where an
NCB decides to suspend or terminate the access of a
counterparty that is eligible for Eurosystem mone-
tary policy operations, the ECB shall approve such
decision before it becomes effective. As an excep-
tion and under urgent circumstances, an NCB may
suspend such monetary policy counterparty's access
to intraday credit with immediate effect. In this case
the NCB concerned shall
immediately notify the
ECB of such action in writing and the ECB shall
have the power to reverse the NCB's decision. If the
NCB does not receive the ECB's decision within ten
operating days of the ECB's receipt of notification,
however, then the ECB shall be deemed to have
approved the NCB's decision. In case of automatic
suspension or termination clauses (i.e. automatic
events of default for insolvency or similar measures)
immediately notify the
the NCB concerned shall
ECB in writing.

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The grounds for such suspension or termination
shall cover any event which entails systemic risk or
which could otherwise
smooth
the
operation of payment systems, including:

endanger

(i) where a participant enters into insolvency

proceedings;

(ii) where a participant is in breach of the RTGS

rules in question;

(iii) where the entitlement of a participant

to
participate in the national RTGS system is
suspended or terminated; and

(iv) where,

in case of a participant which is an
eligible counterparty for Eurosystem monetary
policy operations, the participant ceases to be
eligible or is excluded or suspended from
access to any or all such operations.

Article 4

Arrangements for cross-border payments effected via
interlinking

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

( a ) D e s c r i p t i o n o f i n t e r l i n k i n g

the NCBs shall operate an
The ECB and each of
interlinking component
to enable the processing of
cross-border payments within TARGET. Such interlinking
components shall comply with the technical provisions
and specifications available on the ECB's website (www.
ecb.int) and updated from time to time.

( b ) O p e n i n g

a n d

o p e r a t i o n

o f

i n t e r - N C B

a c c o u n t s h e l d a t t h e N C B s a n d t h e E C B

1.

2.

The ECB and each of the NCBs shall open an inter-
NCB account on their books for each of the other
NCBs and for the ECB. In support of entries made
on any inter-NCB account, each NCB and the ECB
shall grant one another an unlimited and uncolla-
teralised credit facility.

the inter-NCB account of

To effect a cross-border payment, the sending NCB/
ECB shall credit
the
receiving NCB/ECB held at the sending NCB/ECB;
the receiving NCB/ECB shall debit the inter-NCB
account of
the
receiving NCB/ECB.

the sending NCB/ECB held at

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

( c ) O b l i g a t i o n s o f t h e s e n d i n g N C B / E C B

1.

Verification

The sending NCB/ECB shall without delay check all
details contained in the payment order which are
necessary in order for the payment to be executed,
in accordance with the technical provisions and
specifications referred to in Article 4(a). If syntac-
tical errors or other grounds for rejecting a payment
order are detected by the sending NCB/ECB, the
latter shall handle the data and the payment order in
accordance with the RTGS rules of
its national
RTGS system. Each payment passing via interlinking
shall have a unique identifier to facilitate message
identification and error handling.

2.

Settlement

As soon as the sending NCB/ECB has checked the
validity of a payment order as referred to in Article
4(c)(1), and provided that
funds or overdraft
facilities are available, the sending NCB/ECB shall
without delay:

(a)

(b)

debit the amount of the payment order from
the RTGS account of the sending participant;
and

credit the inter-NCB account of the receiving
NCB/ECB, as maintained on the books of the
sending NCB/ECB.

The point in time at which the sending NCB/ECB
has carried out the debiting specified in (a) above
shall be referred to as the settlement time. For
national RTGS systems which apply a blocking-of-
funds procedure, the settlement time shall be the
point in time at which blocking takes place as
referred to in Article 3(e)(3).

For the purposes of this Guideline, and without
prejudice to the provisions regarding irrevocability
referred to in Article 3(e)(3), a payment shall
(as defined in Article 1 of
become final
this
in relation to the sending participant
Guideline)
concerned at the settlement time.

( d ) O b l i g a t i o n s o f t h e r e c e i v i n g N C B / E C B

1.

Verification

The receiving NCB/ECB shall check without delay all
details contained in the payment order which are
necessary for the appropriate credit entry to be
made to the RTGS account of
the receiving
participant (including the unique identifier in order
to avoid double crediting). The receiving NCB/ECB
shall not process any payment orders which it
knows to have been made in error or more than
once. It shall notify the sending NCB/ECB of any
such payment orders and any payments received
return any such
pursuant
payments received without delay).

thereto (and shall

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2.

Settlement

As soon as the receiving NCB/ECB has checked the
validity of a payment order as referred to in Article
4(d)(1), the receiving NCB/ECB shall without delay:

failure of the network service provider. It shall be
the NCB/ECB which has
the responsibility of
suffered the loss to claim compensation,
if any,
against the network service provider, whereby an
NCB shall make its claim through the ECB.

(a)

(b)

(c)

debit the amount of the payment order from
the inter-NCB account of the sending NCB/
ECB on its books;

credit the amount of the payment order to the
RTGS account of the receiving participant; and

Article 4a

Arrangements for cross-border payments effected
through a service-providing NCB

deliver a positive acknowledgement
sending NCB/ECB.

to the

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

For the purposes of this Guideline, and without
prejudice to the provisions regarding irrevocability
referred to in Article 3(e)(3), a payment shall
become final
this
Guideline) in relation to the receiving participant
the moment at which its RTGS
concerned at
account referred to in (b) is credited.

(as defined in Article 1 of

( e ) T r a n s f e r
o r d e r s

o f

r e s p o n s i b i l i t y

f o r

p a y m e n t

Responsibility for the execution of a payment order shall
pass to the receiving NCB/ECB upon receipt by the
sending NCB/ECB of a positive acknowledgement from
the receiving NCB/ECB.

( f ) R e g i m e f o r e r r o r s

1.

Error handling procedures

Each NCB shall comply with, and ensure that its
respective national RTGS system complies with the
error handling procedures adopted by the Govern-
ing Council of the ECB. The ECB shall ensure the
same for the ECB payment mechanism.

2. Additional contingency measures

Each NCB shall ensure that its respective national
RTGS system and procedures comply with the
terms and conditions for the additional contingency
measures and the procedures adopted by the
Governing Council of
the ECB. The ECB shall
ensure the same for the ECB payment mechanism.

( g ) R e l a t i o n t o n e t w o r k s e r v i c e p r o v i d e r

1. All NCBs and the ECB shall be connected or have an
entry point to the network service provider.

2. As between themselves, neither NCBs nor the ECB
shall assume any liability to each other for any

( a ) D e s c r i p t i o n o f t h e c o n n e c t i o n

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
processing of the cross-border payment via inter-
linking vis-à-vis either the sending or receiving
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 crediting/debiting of the receiving/
sending participant's RTGS account.

( b ) O p e n i n g a n d o p e r a t i o n o f a n a c c o u n t

f o r

t h e c o n n e c t e d N C B

1.

2.

3.

The service-providing NCB shall open an account in
euro on its books for the connected NCB.

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

To effect cross-border payments initiated by a
participant in the connected NCB's RTGS system,
the service-providing NCB shall debit the connected
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
participant and credit the connected NCB's account.

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( c ) O b l i g a t i o n s a n d l i a b i l i t i e s o f

t h e s e r v i c e -

p r o v i d i n g N C B a n d t h e c o n n e c t e d N C B

1.

Verification

(a) Both the connected NCB and the service-
providing NCB shall be responsible for the
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 appropriate processing. If the
syntactical
service-providing NCB detects
errors or other grounds
rejecting a
for
payment order,
it shall not process such a
payment order and shall handle the data and
the payment order in accordance with specific
rules
to be agreed between the service-
providing NCB and the connected NCB.

2.

Settlement

the connected NCB shall debit

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

(b) As soon as the service-providing NCB has
checked the validity of
the payment order
submitted pursuant to Article 4a(c)(1)(b), the
service-providing NCB shall without delay:

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

the participant

(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 a participant in the connected
NCB's RTGS system,
the service-providing
NCB shall, on receipt of a payment order from
the sending NCB/ECB:

(i)

(ii)

carry out
Article 4(d)(1) and 4(d)(2)(a);

the procedures described in

the connected NCB's
thereafter credit
account and notify the connected NCB
thereof; and

(iii)

thereafter send a positive acknowledge-
ment to the sending NCB/ECB.

the connected NCB shall

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

(f)

in order

The service-providing NCB shall
take all
necessary measures, as agreed with the con-
nected NCB,
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 are
made available to the connected NCB.

(g) The hours of operation of the connected NCB's
RTGS system shall comply with the specifica-
tions 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
service-providing NCB shall without delay
credit the RTGS account of the participant in
the
its national RTGS system or process
payment order via interlinking in accordance
with Article 4. When the service-providing
NCB receives a positive or negative acknowl-
edgement from the receiving NCB/ECB it shall
to the
forward such an acknowledgement
connected NCB.

The finality of cross-border payments processed
through a bilateral
link shall be determined in
accordance with the rules laid down in Articles 4(c)
(2) and 4(d)(2).

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

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23.1.2006

with Article 4(e). For cross-border payments to a
participant in the connected NCB's RTGS system,
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 ) R e g i m e f o r e r r o r s

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

( e ) R e l a t i o n t o t h e n e t w o r k s e r v i c e p r o v i d e r

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 if 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.

( f )

I n f o r m a t i o n t o p a r t i c i p a n t s

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.

Article 5

Security provisions

Each NCB shall comply with, and shall ensure that
its
respective national RTGS system complies with, the provisions
of the security policy and security requirements and controls
for TARGET. The ECB shall also ensure the same for the ECB
payment mechanism.

Article 6

Audit rules

The internal auditors of the ECB and the NCBs shall assess
compliance with the functional, technical and organisational
features,
including security provisions, as specified for the
relevant TARGET components and arrangements referred to in
this Guideline.

Article 7

Management of TARGET

1. The direction, management and control of TARGET shall
fall within the competence of the Governing Council of the
ECB. The Governing Council may determine the terms and
conditions under which cross-border payment systems other
than the national RTGS systems may use the cross-border
facilities of TARGET or be connected to TARGET.

2. The Governing Council of the ECB shall be assisted by the
Payment and Settlement Systems Committee (PSSC) and its
sub-group composed of NCB representatives of the national
RTGS systems, the TARGET Management Working Group
(TMWG), in all matters relating to the TARGET system.

3. The daily management of TARGET shall be entrusted to
the ECB TARGET Coordinator and to the NCB Settlement
Managers:

— each NCB and the ECB shall appoint a Settlement
Manager for the administration and monitoring of its
respective national RTGS system or, in the case of the
ECB, the ECB payment mechanism,

— the Settlement Manager shall have responsibility for the
daily management of such national RTGS system or, in
the case of the ECB, the ECB payment mechanism and for
handling abnormal situations and errors, and

— the ECB shall appoint the ECB TARGET Coordinator as
the daily manager of the central functions of TARGET.

Article 8

TARGET Compensation Scheme

1 . G e n e r a l p r i n c i p l e s

(a)

(b)

In the event of a malfunctioning of TARGET, direct and
indirect participants (for the purposes of this Article
hereinafter referred to as ‘TARGET participants’) shall
be entitled to submit claims for compensation in
accordance with the rules laid down in this Article.

The TARGET Compensation Scheme shall apply to all
national RTGS systems (regardless of whether such
RTGS systems are connected to TARGET via interlink-
ing or through a bilateral link) and to the ECB payment
mechanism and shall be available for all TARGET
participants (including TARGET participants in national
RTGS systems of participating Member States that are
not counterparties to the Eurosystem monetary policy
operations, and TARGET participants in national RTGS
systems of non-participating Member States) in relation
(without distinguishing
to all TARGET payments
between domestic payments and cross-border pay-

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L 18/11

ments). The TARGET Compensation Scheme shall not
apply to customers in the ECB payment mechanism in
accordance with the Terms and Conditions governing
the use of the ECB payment mechanism, which are
available on the ECB's website and are updated from
time to time.

2 . C o n d i t i o n s f o r c o m p e n s a t i o n

(a) With respect to a sending TARGET participant, a claim
for an administration fee and interest compensation shall
be considered if due to a malfunctioning:

(c)

Unless otherwise decided by the Governing Council of
the ECB, the TARGET Compensation Scheme shall not
apply where the malfunctioning of TARGET is caused
by:

(i)

external events beyond the control of the ESCB; or

(ii)

the failure of a third party other than the operator
of the national RTGS system where the malfunc-
tioning occurred.

(ca)

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

Offers under
the TARGET Compensation Scheme
(compensation offers) shall be the only compensation
offered by the ESCB in cases of a malfunctioning. The
TARGET Compensation Scheme does not exclude the
possibility for TARGET participants to avail themselves
of other legal means to claim compensation in case of a
malfunctioning of TARGET. However, the acceptance of
a compensation offer by a TARGET participant shall
constitute its irrevocable agreement
thereby
waives all claims (including any claims for consequen-
tial damages) it may have against any member of the
ESCB, in accordance with national laws or otherwise,
and that
the corresponding
compensation payment shall be in full and final
settlement of all such claims. The TARGET participant
shall indemnify the ESCB up to the amount received
under the TARGET Compensation Scheme from any
further compensation which might be claimed by any
other TARGET participant concerning the respective
payment order.

the receipt by it of

that

it

(i)

the same day processing of a payment order was
not completed; or

(ii)

such TARGET participant can show that it had the
intention to enter a payment order into TARGET
but was unable to do so due to a stop-sending status
of a national RTGS system.

(b) With respect to a receiving TARGET participant, a claim
for an administration fee shall be considered if due to a
malfunctioning such TARGET participant did not receive
a TARGET payment that it was expecting to receive on
In this event a claim for
the day of malfunctioning.
interest compensation shall also be considered if:

(i)

(ii)

such TARGET participant had recourse to the
marginal lending facility or, if a TARGET participant
does not have access to the marginal lending facility,
such TARGET participant was left with a debit
balance or had a spill-over from intraday credit into
overnight credit on its RTGS account at the close of
business of TARGET or had to borrow amounts
from the respective NCB; and

either the malfunctioning NCB was the receiving
NCB, or the malfunctioning occurred so late in the
it was technically
TARGET operating day that
impossible or
receiving
for
impracticable
TARGET participant to have recourse to the money
market.

the

3 . C a l c u l a t i o n o f c o m p e n s a t i o n

3.1. Compensation of sending TARGET participants

The making of any compensation offers and/or
payments shall not constitute an admission of liability
by any NCB or the ECB in respect of a malfunctioning.

(a) The compensation offer under the TARGET Compensa-
tion Scheme shall consist of an administration fee only or
an administration fee and interest compensation.

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’,
meaning the NCB of the national RTGS system where
in relation to such
the malfunctioning occurred,
payments.

(b) The administration fee shall be determined at EUR 50 for
the first payment order not completed on the processing
date, and, in case of multiple adjustments, EUR 25 for
each of the next four such payment orders and EUR
12,50 for each further
such payment order. The
administration fee shall be determined by reference to
each receiving TARGET participant.

(d)

(e)

(f)

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(c) The interest compensation shall be determined by
applying the rate (the reference rate), from day-to-day
whichever is the lower of the EONIA rate (the euro
overnight index average) and the marginal lending rate,
to the amount of the payment order not processed as a
result of a malfunctioning for each day in the period
starting on the date of the entering or the intended
entering of the payment order into TARGET and ending
on the date that the payment order was or could have
been successfully completed (the period of malfunction-
ing). When calculating the interest compensation, the
proceeds of any actual use of funds by having recourse to
the deposit
case of TARGET
participants in national RTGS systems of participating
Member States
to the
Eurosystem monetary policy operations, the remunera-
tion received on excess funds in the settlement account,
or, in the case of TARGET participants in national RTGS
systems of non-participating Member States, the remu-
neration received for incurring additional positive end-
of-day balances on the RTGS account) shall be deducted
from the amount of compensation.

that are not counterparties

facility (or,

in the

(d)

In the case of the placing of funds in the market or using
the funds
the fulfilment of minimum reserve
requirements, the TARGET participant shall not receive
any interest compensation.

for

(e) With respect to sending TARGET participants in national
RTGS systems of non-participating Member States, any
limit to the remuneration on the aggregate amount of
overnight deposits on the RTGS accounts of such
TARGET participants shall be disregarded to the extent
that such amount can be attributed to the malfunction-
ing.

3.2. Compensation of receiving TARGET participants

(a) The compensation offer under the TARGET Compensa-
tion Scheme shall consist of an administration fee only or
an administration fee and interest compensation.

(b) The amount of

the administration fee shall be as
determined under paragraph 3.1(b) and the administra-
tion fee shall be determined by reference to each sending
TARGET participant.

participating Member States, to the extent that a debit
balance or a spill-over from intraday credit into overnight
credit or
from the
the need to borrow amounts
respective NCB can be attributed to the malfunctioning,
that part of the applicable penalty rate (as stipulated by
the applicable RTGS rules in such cases) which is above
the marginal
shall be waived (and
disregarded in future cases of spill-over) and for TARGET
participants in national RTGS systems referred to in (ii)
above, it shall be ignored for the purpose of access to
intraday credit and/or continued participation in the
national RTGS system concerned.

lending rate,

4 .

P r o c e d u r a l r u l e s

together with any relevant

(a) Any claim for compensation shall be submitted on a
claim form (the content and form of which shall be as
determined and made public by the ECB from time to
time)
information and
evidence required thereby. A sending TARGET partici-
pant shall submit one separate claim form in respect of
each receiving TARGET participant. A receiving TARGET
participant shall submit one separate claim form in
respect of each sending TARGET participant. Claims in
relation to a specific TARGET payment can be submitted
only once, either by a direct or an indirect participant on
their own behalf or by a direct participant on behalf of an
indirect participant.

(b) TARGET participants shall submit their claim form(s) to
the NCB where the RTGS account that has or should
have been debited or credited is maintained (the home
NCB) within two weeks of the date of the malfunction-
ing. Any additional information and evidence requested
by the home NCB shall be supplied within two weeks of
such request being made.

(c) The Governing Council of

the ECB carries out

the
assessment of all claims received and decide whether
compensation offers shall be made. Unless otherwise
decided by the Governing Council of
the ECB and
communicated to the TARGET participants, such assess-
ment shall be made no later than twelve weeks after the
malfunctioning.

(c) The calculation method for the interest compensation as
referred to in paragraph 3.1(c) above shall apply, except
that the interest compensation shall be based on the
difference between the marginal
lending rate and the
reference rate, and shall be calculated on the amount of
the recourse to the marginal lending facility as a result of
the malfunctioning.

(d) With respect to receiving TARGET participants in (i)
national RTGS systems of participating Member States
that are not counterparties to the Eurosystem monetary
policy operations, and (ii) national RTGS systems of non-

If

(d) The malfunctioning NCB shall communicate the result of
the assessment referred to in (c) above to the relevant
TARGET participants.
the assessment comprises a
compensation offer, the TARGET participants concerned
shall, within four weeks of the communication of such
offer, either reject the offer or accept it in respect of each
payment order comprised within each claim by signing a
standard letter of acceptance (the content and form of
which shall be as determined and made public by the
ECB from time to time). If such letter has not been
received by the malfunctioning NCB within that four
week period, the TARGET participants concerned shall
be treated as having rejected the compensation offer.

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(e) Compensation payments shall be made by the mal-
functioning NCB upon receipt of the TARGET partici-
pant's letter of acceptance. There shall be no interest
payable on any compensation payment.

ECB in connection with TARGET which cannot be settled by
agreement between the parties involved in the dispute shall be
notified to the Governing Council of the ECB and referred for
conciliation to the PSSC.

Article 9

Force majeure

Article 10a

Applicable law

There shall be no liability on the part of the NCBs/ECB for
non-compliance with this Guideline to the extent that, and 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 reasonable control
(including, but not limited to, equipment failure or malfunc-
tion, acts of God, natural disasters, strikes or labour disputes),
provided that the above shall not prejudice the responsibility
to have in place the back-up facilities required by this
Guideline, to carry out the error-handling procedures, referred
to in 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.

Article 10

Resolution of operational or technical disputes

Without prejudice to the rights and prerogatives of
the
Governing Council of the ECB, any operational or technical
disputes arising between NCBs or between any NCB and the

In the event of any dispute arising between NCBs or between
any NCB and the ECB in connection with TARGET, 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 laid down in this Guideline; and (ii)
as a supplementary source in disputes concerning cross-
border payments via interlinking, by the law of the Member
State where the seat of the receiving NCB/ECB is located.

Article 11

Final provisions

1. This Guideline is addressed to the NCBs.

2. Guideline ECB/2001/3 is hereby repealed and references
to Guideline ECB/2001/3 shall be construed as references to
this Guideline.

3. This Guideline shall enter into force on 2 January 2006. It
shall apply from 16 March 2006.

Done at Frankfurt am Main, 30 December 2005.

For the Governing Council of the ECB

The President of the ECB

Jean-Claude TRICHET

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ANNEX I

NATIONAL RTGS SYSTEMS

Member State

Name of system

Settlement agent

Location

Belgium

Germany

Greece

Spain

France

Ireland

Italy

Electronic Large-value Inter-
bank Payment System (ELLIPS)

Banque Nationale de Belgique/
Nationale Bank van België

Brussels

RTGSplus

Deutsche Bundesbank

Frankfurt

Hellenic Real-time Money
Transfer Express System
(HERMES)

Servicios de Liquidación del
Banco de España (SLBE)

Transferts Banque de France
(TBF)

Bank of Greece

Athens

Banco de España

Madrid

Banque de France

Paris

Irish Real-time Interbank Set-
tlement System (IRIS)

Central Bank and Financial
Services Authority of Ireland

Sistema di regolamento lordo
(BIREL)

Banca d'Italia

Dublin

Rome

Luxembourg

Luxembourg Interbank Pay-
ment Systems (LIPS-Gross)

Banque centrale du Luxem-
bourg

Luxembourg

The Netherlands

TOP

De Nederlandsche Bank

Amsterdam

Austria

Portugal

Austrian Real-time Interbank
Settlement System (ARTIS)

Sistema de Pagamentos de
Grandes Transacções (SPGT)

Oesterreichische Nationalbank

Vienna

Banco de Portugal

Lisbon

Finland

Bank of Finland (BoF-RTGS)

Suomen Pankki

Helsinki

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ANNEX II

DOMESTIC PAYMENT FEES

The price of domestic RTGS transfers in euro will continue to be determined at the national level, with reference to
the principles of cost recovery, transparency and non-discrimination and taking into account the fact that the price
for domestic and cross-border transfers in euro should be broadly in the same range so as not to affect the singleness
of the money market.

National RTGS systems shall disclose their fee structure to the ECB, to all other participating NCBs, to participants in
national RTGS systems, and to other interested parties.

Methodologies to determine the costs of national RTGS systems will be harmonised to an adequate level.

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Official Journal of the European Union

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ANNEX III

CROSS-BORDER PAYMENT FEES

The fee (excluding VAT) to be charged for cross-border payments through TARGET between direct participants will be
based on the number of transactions sent by a participant within a single RTGS system, according to a degressive
scale.

The degressive scale is as follows:

— EUR 1,75 for each of the first 100 transactions per month,

— EUR 1,00 for each of the next 900 transactions per month,

— EUR 0,80 for each subsequent transaction in excess of 1 000 per month.

For the purpose of the application of the degressive tariff, the payment volume to be considered is the number of
transactions entered into by a same legal entity within a single RTGS system or the payment transactions entered by
different entities for execution through the same settlement account.

The application of the above tariff scheme will be reviewed from time to time.

Fees are charged only by the sending NCB/ECB to the sending participants in the national RTGS system/ECB payment
mechanism (EPM). No fees are charged by the receiving NCB/ECB to the receiving participant. There will be no charge
for inter-NCB transfers, i.e. where the sending NCB/ECB is acting on its own behalf.

Fees will cover the queuing of the payment instruction (if applicable), the debiting of the sender, the crediting of the
inter-NCB account of the receiving NCB/ECB on the books of the sending NCB/ECB, the sending of the payment
settlement message request (PSMR) via the Interlinking network, the debiting of the inter-NCB account of the sending
NCB/ECB on the books of the receiving NCB/ECB, the crediting of the RTGS participant, the sending of the payment
settlement message notification (PSMN) via the interlinking network, the communication of the payment message to
the RTGS participant/receiver and confirmation of settlement (if applicable).

The cross-border TARGET fee structure does not cover the costs of the telecommunications link between the sender
and the national RTGS system in which the sender is a participant. The fee for this telecommunications link will
continue to be paid according to the domestic rules.

National RTGS systems may not charge any fee for the conversion of transfer orders from national currency units into
euro units or vice versa.

RTGS systems may charge extra fees for additional services they may provide (e.g. the entering of paper-based
payment instructions).

The possibility of applying different fees according to the time of execution of the payment instructions will be
considered on the basis of experience gained during the operation of the system.

23.1.2006

EN

Official Journal of the European Union

L 18/17

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.

2.

3.

4.

The reference time for TARGET is ‘European Central Bank time’, defined as the local time at the seat of the ECB.

TARGET will have common operating hours from 07.00 to 18.00.

Early opening, before 07.00, may take place after prior notification has been sent to the ECB:

(i)

(ii)

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

for ESCB-related reasons (e.g. on days when exceptional payment volumes are expected, or in order to
reduce foreign exchange settlement risk when processing the euro leg of foreign exchange deals involving
Asian currencies).

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 transmission). 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)

(2)

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.

The cut-off time for cross-border inter-bank payments sent from a participant in a connected NCB's RTGS system via a
service-providing NCB is 17.52:30.