The European Central Bank has settled on a delivery-versus-payment price of 15 cents per instruction for the Target 2 Securities system.
A progress report on the project - which is designed to create a single pan-European settlement system for European securities - last month floated the 15 cents price cap. The figure appeared to pacify market participants, who had feared a much higher charge for the controversial initiative.
The central bank says the price will be fixed for four years from September 2014, when T2S will go live, to December 2018. The ECB has also made a commitment not to increase T2S fees by more than 10% per year between 2019 and the end of the cost recovery period, in September 2022.
In calculating the figure, the ECB is relying on non-euro currencies adding 20% to the total settlement volume and volume projections based on information provided by market participants. It is also awaiting confirmation from the tax authorities that it will not be charged VAT for the T2S services it provides.