2006, year of preparation for TARGET2

SWIFT is on target for TARGET2

Since 2004, SWIFT has been working closely with the Eurosystem to ensure delivery of the TARGET2 single technical platform by November 2007. TARGET2 will then go live. The migration to TARGET2 will start in November 2007 with the first wave of countries. A second wave is scheduled for February 2008 and a third wave for May 2008. Internal testing with the participating central banks starts in February 2007 and testing for participants (commercial banks and ancillary systems) will start in May 2007.

2006 is therefore a year of preparation for the 1,000 financial institutions, the ancillary systems and the participating central banks that will be migrating to TARGET2. Major banks worldwide are now reorganising their back offices and their management of euro-liquidity. They are preparing in earnest to ensure their infrastructures and interfaces are in place, to implement the standards and integrate them in their back-office applications.

Group 1	Group 2	Group 3	Group 4
Austria	Belgium	Denmark	Reserved for contingency
Cyprus	Finland	Estonia
Germany	France	ECB
Latvia	Ireland	Greece
Lithuania	Netherlands	Italy
Luxembourg	Portugal	Poland
Malta	Spain
Slovenia

SWIFTStandards are ready

SWIFT has been working hand in hand with the Eurosystem. A major recent achievement is on the standards front. TARGET2 will use SWIFTStandards MTs for RTGS payment instructions and SWIFTStandards MXs for managing cash positions. Some of these messages are SWIFTStandards Cash Management messages, while other proprietary messages defined by the Eurosystem will be transported in a SWIFTStandards MX envelope. This process will ensure complete integration with the network and the interfaces.

SWIFTNet Phase 2 is in sync

SWIFTNet Phase 2 migration is scheduled to take place during the same timeframe as migration to TARGET2. SWIFT is therefore working closely with the Eurosystem to eliminate any risk arising from the overlap of the two projects. Although TARGET2 and SWIFTNet Phase 2 are technically independent, customers are advised to migrate to Phase 2 before migrating to TARGET2. Phase 2 country window migrations have been assigned with this in mind. This should ensure a manageable workload within the set timeframe.

All set on the interface front

SWIFT fully supports its customers with its interface portfolio for all communication with TARGET2. Large banks are getting their systems ready for the application-to-application mode using the SWIFTAlliance Gateway single window, and thanks to the campaign to promote the SWIFTAlliance Starter Set, medium and small banks are also ready with their interfaces for both Phase 2 and the TARGET2 migration. The software package enables manual access to the Single Shared Platform, while at the same time ensuring readiness for Phase 2.

Training available

A SWIFT Training course is available to help customers understand the SWIFT component of TARGET2. See the Training section for details.

Towards broader EU harmonisation

TARGET2 is an important step for furthering the harmonisation of clearing and settlement systems in the European Union. Building on its experience with high value payments clearing, SWIFT’s objective is to extend its offering in low value payments and securities clearing and settlement systems. “SWIFT is happy to contribute to TARGET2, an important step in the reform of the European payments landscape. We are looking forward to leveraging this experience in other areas such as SEPA, Giovannini and MiFID” says Alain Raes, Regional Director, Continental Europe, Banking Industry Division, SWIFT.