In short, T2S (Target2-Securities) is a pan-European platform for settlement of securities transactions. It was created by the European Central Bank and gives the ability to settle in a single location using a single message format, securities in all markets that are signed up to T2S.

T2S will bring competition to the CSD environment, this in turn will eventually lead to lower settlement costs across Europe. Due to the cost of implementation to the CSDs however and the fee that T2S will charge, savings might not be realised immediately.

Depending on the model that the relevant CCPs follow, if the cost of settlement decreases the reduction can be passed on to the customers who will in turn bring down the overall cost to clear.