Lithuania becoming part of TARGET2-Securities family
The Bank of Lithuania, Nasdaq CSD SE depository and credit institutions operating in the country today join TARGET2-Securities (T2S) – the European securities settlement infrastructure offering standardised settlement of domestic and cross-border securities transactions across Europe.
‘TARGET2-Securities is one of the major axes of the Eurosystem’s payment and settlement infrastructure. Joining it, in combination with consolidation of the securities depositories of Lithuania, Latvia and Estonia, will contribute to the development of the Baltic States’ capital market and bring new opportunities to compete in the securities market of the entire European Union,’ says Mindaugas Vaičiulis, Director of the Banking Service at the Bank of Lithuania.
The fact of the Bank of Lithuania having joined TARGET2-Securities opens new opportunities for all those who invest in securities, from banks, pension funds, investment management companies to private investors. T2S enables making use of state-of-the-art settlement technology according to the standardised rules and using harmonised information systems thus making settlement easier.
The national monopoly of central securities depositories was eliminated in the EU in 2014 once the EU Regulation laying down requirements for their activities came into force. As a result, the depositories may provide services in any of the EU countries. It means that market participants will be able to choose a depository that best corresponds their needs in the entire EU. Higher competition will encourage providing better and cheaper services for those who invest in securities.
The Nasdaq group has made use of the new opportunities: one central securities depository for all Baltic States – Nasdaq CSD SE – commences operation today. It manages three securities settlement systems – one in each state – and provides notary, central maintenance and other services. It is the first central securities depository in the EU licensed under the EU Regulation and replacing individual depositories in the Baltic States terminating their operations.
While Nasdaq CSD SE is established in Latvia, its activities will be of significant importance for both Estonian and Lithuanian securities markets; therefore, the Bank of Lithuania and the supervisory and oversight authorities of the other Baltic States had closely cooperated during the authorisation process, and will continue the cooperation in its ongoing supervision.
The T2S infrastructure became functional on 22 June 2015. It was designed by the central banks of Spain, Italy, France and Germany.