The European Collateral Management System (ECMS) is a unified technical platform for national central banks, through which they will harmoniously manage eligible assets used as collateral in the Eurosystem’s monetary policy operations upon its launch. The goal of ECMS is to increase efficiency in collateral mobilization and management and to support further harmonization of processes within the Eurosystem. The launch date of ECMS has been set for 16 June 2025.
Similar to other services of the TARGET group (T2, T2S, TIPS), the ECMS will also be accessible through ESMIG (Eurosystem Single Market Infrastructure Gateway). Communication with ECMS will take place either in U2A mode (via graphical user interface) or in A2A mode through messages, compliant to the ISO 20022 standard, exchanged between the systems.
From the perspective of CDCP, the implementation of the impacts of ECMS usage by the National Bank of Slovakia (NBS) can be divided into three basic areas.
The first area covers collateral mobilization and demobilization through the settlement services. The current method of submitting instructions by the NBS directly into the Information System of CDCP (IS CDCP) will be replaced by submitting instructions from the ECMS. For this new method of submitting instructions, CDCP used the existing functionalities and prepared changes at the T2S and IS CDCP levels. As the basis served the existing DCP model (T2S – Directly Connected Party), represented by the ECMS Technical Participant (an entity registered with a specific BIC11 NBS in T2S and IS CDCP). The ECMS Technical Participant will be used to ensure inbound and outbound communication of the ECMS to/from T2S and subsequently also between T2S and IS CDCP. For this purpose, the necessary software changes and configurations were implemented in T2S and IS CDCP to ensure correct routing of respective messages among ECMS, T2S, and IS CDCP. These changes were successfully tested by the NBS (on behalf of ECMS) and by CDCP participants.
The second area is the SCoRE Standards for Billing, whose compliance date coincides with the ECMS launch date. The standards harmonize four basic aspects of billing: the billing interval, the invoice due date, the deadline for sending billing reports, and the ISO 20022 message for billing reports. To ensure compliance with the standards, CDCP gradually introduced several changes to the IS CDCP, its Rules of Operation, and internal processes. As a result, the first two of the above standards were implemented along with the generation of billing records according to the standard in spring 2024. The last two standards will be implemented from December 2024.
The third area are SCoRE Standards for Corporate Actions. In this area, CDCP actively communicates with its participants to ensure compliance with the standards in general. Based on several challenges related to their implementation or the implementation of standards for processing of corporate actions as such, CDCP, in cooperation with the NBS, issuers of relevant securities, and CDCP participants, prepared a process for execution of yield payments and redemption of debt securities registered on ECMS-relevant accounts opened for the NBS.
Author: Ľubomír Demčák
