Riksbank begins T2S negotiations for SEK settlement

The Riksbank has initiated contractual negotiations with the Eurosystem to adopt the T2S platform for Swedish krona securities settlement.

This move follows a strategic commitment made in 2021, aimed at modernising Sweden's financial infrastructure.

Euroclear Sweden AB, the national central securities depository, will also commence negotiations and preparations for this transition.

The primary objective is to align SEK securities settlement with common technical solutions and standardised processes across the European Union.

This harmonisation is expected to foster more uniform financial flows for participating markets.

Christina Wejshammar, Head of the Payments Department, articulated the central bank's rationale: 'Our assessment is that the T2S platform is the most appropriate way to ensure that the Swedish securities market is harmonised over time with the rest of Europe.'

She further explained the benefits for financial institutions, noting that 'Using the same technical platform makes it easier for banks and other actors operating in multiple markets.'

Wejshammar also highlighted T2S's strong security, citing its 'high level of cybersecurity and redundancy regarding its operations,' crucial for operational resilience.

T2S, or TARGET2-Securities, is the Eurosystem's technical platform for securities settlement, a critical part of Europe's financial market infrastructure.

Operational since 2015, it currently serves 24 central securities depositories (CSDs) from 23 countries.

Although primarily settling in euros and Danish kroner, T2S was designed to accommodate additional currencies, making it suitable for the Swedish krona.

The integration of SEK into T2S is planned for completion by September 2030, a timeline set in cooperation with Euroclear Sweden AB.

This collaborative effort aims for a smooth transition, supporting a more integrated and resilient European financial landscape.

The platform's proven track record and multi-currency design are key factors in the Riksbank's decision to proceed with this significant infrastructure project.