This is the cornerstone of the T2S legal framework. It defines the respective roles and responsibilities of T2S and 4CB, as well as the relationships between them and external stakeholders. In addition, the fundamental principles of the financial system, the rights of the Eurosystem with regard to the platform, the conditions of access for DTCs and the eligibility criteria for DTCs have not been defined in the euro monetary system. It was adopted by the Board of Governors on April 21, 2010. The two most important documents constituting the T2S framework of the T2S Treaty are the framework agreement for the DCT establishing its contractual rights and obligations with the Eurosystem and the monetary participation agreement that governs the relations between the Eurosystem and non-euro area central banks that wish to make their currency available in T2S. Today, only the Central Bank of Denmark has signed this agreement and it foresees the migration of the Danish krone to T2S in 2018. The aim of T2S is to harmonize and integrate the securities settlement-delivery infrastructures in Europe, which enable cross-border settlement-delivery of securities in Europe with domestic efficiency and cost conditions. In addition, T2S complements and facilitates other European initiatives in the securities sector. This is a fundamental step forward in establishing a single market for eu`s financial systems and hence achieving a `Capital Markets Union` The Business Process Description (BPD) describes and illustrates the business processes involving DTCs, central banks and other parties directly related to the technical sector and their interaction with T2S. By creating a level playing field for the settlement of securities transactions, T2S is not only an important step towards greater integration of European financial markets, but also promotes competition.
The harmonization effect of T2S will be felt beyond the euro area, as it will also enable the defeat of securities in currencies other than the euro. This, of course, depends on a central bank`s willingness to make its central bank currency available for T2S resolution. The Central Bank of Denmark, Danmarks Nationalbank, for example, will provide the Danish krone for the liquidation of T2S from 2018. Participants use a single dedicated cash account (DCA) in T2S, which means they can reduce the liquidity cushions they hold in different markets and thus optimize their liquidity operations. T2S also offers institutions many ways to improve their collateral management, as it is much easier to transfer guarantees between T2S-participating DTCs. The harmonization of Postradings is a fundamental objective of T2S. It facilitates the process of financial integration in the EU and contributes to improving efficiency and a level playing field in securities markets. T2S harmonizes technical and operational issues in resolution services that include the way forward for the creation of a single market in Europe, in line with regulatory changes being developed and implemented.