text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: Commission Decision of 28 December 2012 on State aid SA.33760 (12/N-2, 11/C, 11/N); SA.33763 (12/N-2, 11/C, 11/N); SA.33764 (12/N-2, 11/C, 11/N); SA.30521 (MC 2/10); SA.26653 (C9/09); SA.34925 (12/N-2, 12/C, 12/N); SA.34927 (12/N-2, 12/C, 12/N); SA.34928 (12/N-2, 12/C, 12/N) implemented by the Kingdom of Belgium, the French Republic and the Grand Duchy of Luxembourg in favour of Dexia, DBB/Belfius and DMA (notified under document C(2012) 9962) (

text: ) (OJ L 110, 12.4.2014, p. 1).

text: See the commentary on Article 77 of the draft law amending

text: Article 9

text: in the preparatory work of the draft law.

text: Communication from the Commission on the application, from 1 August 2013, of State aid rules to support measures in favour of banks in the context of the financial crisis (‘Banking Communication’) (OJ C 216, 30.7.2013, p. 1).

text: The reference to the King is understood as a reference to the Belgian Government.

text: The ELA procedures are published on the ECB’s website at www.ecb.europa.eu .

text: See the second paragraph of the ‘Financial support for credit and/or financial institutions’ section of Chapter 2.2.5.1 of the ECB’s 2016 Convergence Report.

text: See paragraph 3.2 of Opinion

text: . All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.

text: See ECB Convergence Report, June 2016, p. 25.

title: Opinion of the European Central Bank of 17 November 2016 on a draft law abolishing the State guarantee provided in connection with emergency liquidity assistance (CON/2016/55)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 17 November 2016 on a draft law abolishing the State guarantee provided in connection with emergency liquidity assistance (

text: ) Introduction and legal basis

text: On 19 October 2016, the European Central Bank (ECB) received a request from the Governor of the Nationale Bank van België/Banque Nationale de Belgique (NBB), on behalf of the Minister of Finance, for an opinion on a draft law amending the Law of 22 February 1998 establishing the Organic Statute of the Nationale Bank van België/Banque Nationale de Belgique (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third and sixth indents of

text: Article 2(1) of Council Decision 98/415/EC

text: , since the draft law concerns the NBB and contains rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: 1.1 The draft law abolishes the State guarantee extended to the NBB in respect of the repayment of credit granted in the context of its contribution to the stability of the financial system and the coverage of any losses due to any operations necessary in this respect. 1.2 This guarantee was introduced by the Law of 15 October 2008 on measures to promote financial stability and, in particular, setting up a State guarantee for loans granted and other transactions in the context of financial stability, which was enacted in the context of the financial crisis. In its Decision of 28 December 2012 on State aid implemented by the Kingdom of Belgium in favour, inter alia, of Dexia and Belfius , the Commission found that in providing such a guarantee in connection with emergency liquidity assistance (ELA), Belgium had unlawfully implemented aid in the form of ELA in breach of Article 108(3) of the Treaty. However, the Commission ultimately decided that this combination of ELA with a State guarantee was compatible with the internal

text: market as it was intended to remedy a serious disruption to the economy, and could therefore be maintained provided that the guarantee was limited in its scope and duration in accordance with the Commission’s Decision. 1.3 As explained in the preparatory work of the draft law , the main objective of the draft law is to ensure that the ELA extended by the NBB no longer constitutes State aid within the meaning of Article 107(1) of the Treaty. As a consequence, the NBB may extend ELA without the need either to obtain the Commission’s prior approval or to apply burden-sharing measures as between shareholders and subordinated creditors, which the Commission’s Banking Communication stipulates as a condition in order for State aid to be regarded as compatible with the internal market . The preparatory work emphasises the significant operational risk posed by the prior implementation of such burden-sharing measures. In abolishing the State guarantee for ELA, the draft law bolsters the NBB’s autonomy and allows it to act in a swift and timely manner as a lender of last resort. The preparatory work of the draft law notes that this change is without prejudice to the right of the King (hereinafter the ‘Belgian executive’) under subparagraph 2 of subsection 1 of

text: Article 36

text: /24 of the Law of 22 February 1998 establishing the Organic Statute of the Nationale Bank van België/Banque Nationale de Belgique (hereinafter the ‘Law of 22 February 1998’) to issue, on the NBB’s advice, an ad hoc guarantee in the event of a sudden crisis in the financial markets or a serious risk of systemic crisis, in order to limit the extent or impact thereof.

text: 2. General observations

text: 2.1 Euro area credit institutions may receive central bank credit not only through monetary policy operations, but exceptionally also through ELA. The provision of ELA means the provision by a Eurosystem national central bank (NCB) of central bank money and/or any assistance that may lead to an increase in the provision of central bank money to a solvent financial institution, or group of solvent financial institutions, that is facing temporary liquidity problems, without this operation being part of the single monetary policy. Responsibility for the provision of ELA lies with the NCB concerned. This means that any costs and risks arising from the provision of ELA are incurred by the relevant NCB. However, pursuant to Article 14.4 of the Statute of the European System of Central Banks and of the European Central Bank the Governing Council may restrict ELA operations if it considers that they interfere with the Eurosystem’s objectives and tasks. The Governing Council must be informed of such operations in a timely manner in order for it to adequately assess whether such interference is occurring. A procedure to this end has been in place since 1999 and its key features are summarised in the ECB’s ELA procedures . Strict compliance with the ELA procedures, particularly in respect of the extension of ELA to illiquid but solvent banks, is of the utmost importance. The financing by an NCB of insolvent credit and/or financial institutions would be incompatible with the monetary financing prohibition under

text: Article 123

text: of the Treaty. The rationale behind this prohibition is that by financing an insolvent credit institution, an NCB would be assuming a government task. 2.2 Taking account of the reference in the preparatory work of this draft law to the possible issuance of an ad hoc guarantee by the Belgian executive, on the NBB’s advice, in the event of a sudden crisis in the financial markets or in the event of a serious risk of systemic crisis, the ECB underlines that the criteria it has developed to ensure that an NCB does not assume a government task in breach of the monetary financing prohibition under Article 123 of the Treaty must be met. These criteria apply to operations in which ELA is granted by an NCB independently and at its full discretion to a solvent financial institution on the basis of collateral security in the form of a State guarantee, and are as follows: (a) it must be ensured that the credit provided is as short term as possible; (b) there must be systemic stability aspects at stake; (c) there must be no doubts as to the legal validity and enforceability of the State guarantee under applicable national law; and (d) there must be no doubts as to the economic adequacy of the State guarantee, which should cover both principal and interest on the loans . 2.3 The ECB also notes that the Commission’s Banking Communication states that while the ordinary activities of central banks relating to monetary policy, such as open market operations and standing facilities, do not fall within the scope of the State aid rules, the provision of dedicated support to a specific credit institution, which is commonly referred to as ELA, may constitute aid unless the following cumulative measures are met: (a) the credit institution is temporarily illiquid but solvent at the moment of the liquidity provision which occurs in exceptional circumstances and is not part of a larger aid package; (b) the facility is fully secured by collateral to which appropriate haircuts are applied, in function of its quality and market value; (c) the central bank charges a penal interest rate to the beneficiary; and (d) the measure is taken at the central bank’s own initiative and, in particular is not backed by any counter-guarantee of the State. 2.4 In line with its previous opinion issued on the occasion of the introduction of the State guarantee backing the ELA measures taken by the NBB , and consistent with the above-referenced criteria, the ECB wishes to reiterate that the provision of ELA is an autonomous decision that the NBB must be in a position to take in exceptional circumstances. In this respect the ECB welcomes the intention of the draft law to bolster the NBB’s autonomy, free from the constraints imposed by Union State aid rules, in order for it to be able to act on a swift and timely basis to provide ELA. The ECB also notes that Article 12 of the Law of 22 February 1998 has been amended since 2008 to provide that for all decisions and transactions made in the context of its contribution to the stability of the financial system, the NBB shall enjoy the same degree of independence as provided for in Article 130 of the Treaty. In this respect

text: Article 22

text: , which provides for the possibility for the Minister of Finance (or his/her representative) to supervise transactions, and to oppose the implementation of measures, and suspend decisions, that are contrary to the Law of 22 February 1998, the NBB’s statutes or the interests of the State does not apply to the tasks of the European System of Central

text: Banks or to Chapter III/4 of the Law of 22 February 1998, which concerns the NBB’s contribution to the stability of the financial system. The ECB welcomes these provisions which, taken together, prevent any interference by the Minister of Finance in the NBB’s decision-making process as regards the extension of ELA. In order to ensure with greater certainty that the Minister of Finance cannot suspend or oppose decisions made by the NBB on ELA, a reference to

text: Article 12

text: , which relates more generally to financial stability, could be added to

text: Article 22

text: . 2.5. From the perspective of the financial independence required of an ESCB central bank under Article 130 of the Treaty, the ECB recalls that a national central bank (NCB) within the ESCB is required to have sufficient financial resources to perform its ESCB-related tasks. Member States may not put their NCBs in a position where they have insufficient financial resources and inadequate net equity to carry out their ESCB or Eurosystem-related tasks, as applicable. Additionally, the principle of financial independence requires an NCB to have sufficient means not only to perform its ESCB-related tasks but also its national tasks, including the provision of ELA. Losses incurred by an NCB in the exercise of its national tasks could negatively impact on the exercise of ESCB-related tasks. As a consequence, the NCB could not autonomously avail itself of sufficient financial resources to perform the ESCB-related tasks required of it under the Treaty and the Statute. Hence, the determination if the NCB avails of sufficient means to perform its ESCB-related tasks cannot be considered in isolation. Otherwise, the financial independence of the NCB could be jeopardised. For all these reasons, financial independence under the Treaty implies that an NCB should always be sufficiently capitalised. In particular, any situation should be avoided whereby for a prolonged period of time an NCB’s net equity is below the level of its statutory capital or is even negative, including where losses beyond the level of capital and reserves are carried over. Any such situation may negatively impact on the NCB’s ability to perform its ESCB-related tasks but also its national tasks. Moreover, such a situation may affect the credibility of the Eurosystem’s monetary policy. Therefore, the event of an NCB’s net equity becoming less than its statutory capital or even negative would require that the respective Member State provides the NCB with an appropriate amount of capital at least up to the level of the statutory capital within a reasonable period of time so as to comply with the principle of financial independence.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: MNB Decree 46/2015 (XI.11.) on the reserve ratio, published in Magyar Közlöny 2015/170.

text: Opinion

text: and Opinion

text: . All ECB opinions are available on the ECB’s website at www.ecb.europa.eu.

publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 18 November 2016 on reserve ratios (CON/2016/56)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 18 November 2016 on reserve ratios (

text: ) Introduction and legal basis

type: rubrik

text: On 25 October 2016 the European Central Bank (ECB) received a request from the Magyar Nemzeti Bank (MNB) for an opinion on a MNB draft decree on the reserve ratio (hereinafter the ‘draft decree’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and

text: Article 2(2) of Council Decision 98/415/EC

text: , as the draft decree relates to the instruments of monetary policy of a Member State whose currency is not the euro. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

type: stycke

text: 1. Background and purpose of the draft decree

text: 1.1 In 2015 the Governor of the MNB adopted Decree 46/2015 on the reserve ratio, in relation to which the ECB adopted Opinion

text: . Decree 46/2015 provided that a reserve ratio of 0% would apply to: (a) deposits and loans received with a remaining maturity of over two years at the time they are entered into the balance sheet of the credit institution; (b) debt securities issued with an agreed maturity over two years; and (c) repos. Further, a reserve ratio of 2% would apply to all other liabilities included in the reserve base of a credit institution subject to reserve requirements. The draft decree now proposes to reduce the reserve ratio referred to above from 2% to 1%, while keeping all other elements of the minimum reserve system unchanged. 1.2 In the explanatory memorandum attached to the draft decree, the MNB notes that the suggested legislative change has been brought forward to support the effectiveness of the operational framework of Hungarian monetary policy, and especially the quantitative limitation of the threemonth deposit facility. More specifically, the amendment aims to increase the amount of freely available liquidity in the banking sector, to foster activity in the money market and enhance the reliability of the interbank market, as well as to allow for further convergence with the ECB’s practice in the field of reserve ratios. The change is also consistent with the MNB’s new operational

text: framework for monetary policy and the monetary easing measures established by the MNB to address the still subdued inflationary environment. As regards the latter, the reduced frequency of the three-month deposit instrument’s tenders and the capping of the same instrument allow for the reduction of money and capital market interest rates, by rechannelling banks’ excess liquidity to deposit facilities of the MNB and to the interbank market. The proposed amendment of the reserve ratio may lead to a liquidity surplus in the banking sector that could enhance the effectiveness of the monetary measures.

text: 2. General observations

text: The ECB noted in earlier opinions that Member States whose currency is not the euro retain their powers in the field of monetary policy, which gives them greater flexibility to address liquidity shocks and market inefficiencies that hinder the implementation of national monetary policy. In those opinions, the ECB noted that once the euro is introduced, Hungary’s monetary policy will need to be consistent with the Eurosystem’s operational framework, and credit institutions should therefore be familiar with the requirements that will apply to them once the single monetary policy is implemented in Hungary.

text: This opinion will be published on the ECB’s website.

text: Done at Frankfurt am Main, 18 November 2016.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI

type: vagledning

utgivare: ecb


text: See Opinions

text: and

text: . All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.

text: See paragraph 3.1.2 of Opinion

text: See paragraph 3.1.6 of Opinion

text: and paragraph 3.2.1 of Opinion

title: Opinion of the European Central Bank of 30 November 2016 on the reimbursement of the costs for the operation of the central credit register and the register of bank accounts (CON/2016/57)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 30 November 2016 on the reimbursement of the costs for the operation of the central credit register and the register of bank accounts (

text: ) Introduction and legal basis

text: On 3 November 2016 the European Central Bank (ECB) received a request from Българска народна банка (Bulgarian National Bank (BNB)), following correspondence exchanged between BNB and the Minister of Finance, for an opinion on a draft law on the 2017 State Budget of the Republic of Bulgaria (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of

text: Article 2(1) of Council Decision 98/415/EC

text: , as the draft law relates to BNB. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: 1.1 The draft law proposes, inter alia, to amend the Law on credit institutions, so that BNB defines the methodology for the calculation of the fees for access to the two information systems operated by BNB: the central credit register and the register of bank accounts. The expenditures of the relevant state bodies and judicial authorities in respect of their access to the two registers shall be incurred by the state budget and their payment to BNB shall be arranged by means of an agreement between BNB and the Ministry of Finance. The purpose of the proposed amendments is to overcome the drawbacks of the currently established decentralised payment of costs by the relevant public and judicial authorities, which could hamper both the planning and accounting of the budget expenses of these authorities and the payment of the expenditures. 1.2 In addition, the draft law envisages that credit institutions and branches of credit institutions operating in Bulgaria shall have access to the register of bank accounts, in order to establish the existence of clients’ payment accounts that have basic features, as well as to receive relevant data for the purposes of assessing the creditworthiness of individuals. It is suggested by BNB that the inclusion of credit institutions as users of information from the register of bank accounts aims to ensure that costs in relation to the operation of the register are predominantly covered from private sources.

text: 2. Specific observations

text: 2.1 The ECB has had the opportunity to comment on the arrangements for the reimbursement of the costs that BNB would incur in setting up and operating the central credit register and the register of bank accounts . 2.2 The principle of financial independence of European System of Central Banks (ESCB) members requires that the Member States do not put their NCBs in a position where they have insufficient financial resources to carry out not only their ESCB related tasks, but also their national tasks, both from an operational and financial perspective . The ECB has noted that, in this regard and in order to comply with the prohibition of monetary financing under Article 123 of the Treaty, it needs to be ensured that BNB will be fully and adequately reimbursed for all costs incurred in performing activities related to the tasks entrusted to it in connection with the setting up and operation of the two registers . 2.3 The draft law aims to replace the current arrangement for the decentralised payment of a fee charged by BNB with an overarching framework agreement between BNB and the Ministry of Finance. The ECB underlines that this agreement should ensure that the reimbursement of BNB for the incurred costs is made on the basis of ‘arm’s length’ commercial terms, either in advance of costs being incurred or on a regular and prompt basis as the costs arise. The ECB would appreciate receiving a copy of the draft agreement between BNB and the Ministry of Finance prior to its entry into effect and execution.

text: Done at Frankfurt am Main, 30 November 2016.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


title: Opinion of the European Central Bank of 5 December 2016 on the transfer of public tasks concerning coins to De Nederlandsche Bank (CON/2016/58)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 5 December 2016 on the transfer of public tasks concerning coins to De Nederlandsche Bank (

text: ) Introduction and legal basis

text: On 8 November 2016, the European Central Bank (ECB) received a request from the Minister of Finance of the Netherlands for an opinion on a draft ministerial regulation (hereinafter the ‘draft ministerial regulation’) and a draft royal order (hereinafter the ‘draft royal order’ and, together with the draft ministerial regulation, the ‘draft laws’) relating to the transfer of public tasks concerning coins to De Nederlandsche Bank (DNB). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the first, second and third indents of

text: , as the draft laws concern currency matters, means of payment and DNB. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft laws

text: 1.1 The draft ministerial regulation amends the ministerial regulation concerning the establishment of the Coin National Analysis Centre (CNAC) . It provides that DNB, instead of the Royal Dutch Mint N.V. (the ‘Mint’), shall be designated as the CNAC under

text: Article 5 of Council Regulation (EC) No 1338/2001

text: and shall be responsible for the examination by the CNAC of suspected counterfeit coins. The draft royal order appoints DNB to carry out the tasks of the CNAC. 1.2

text: Article 2

text: (a) of the draft royal order reconfirms, for the sake of clarity, DNB’s existing task of putting into circulation and recirculation euro coins. The draft royal order also authorises DNB to carry out three specific coin-related tasks currently carried out by the Mint, as part of DNB’s responsibility for the circulation of coins, namely (b) the withdrawal from circulation of euro coins and ‘special coins that hold the status of legal tender’ that are unfit for circulation ; (c) the demonetisation and sale of euro coins, special coins and excess euro coins at the request of the Minister of Finance ; and (d)

text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: 2 Regulation of the State Secretary for Finance of 3 December 2001 for the Creation of the National Analysis Centre for Coins, Staatscourant 2001/247.

text: Council Regulation (EC) No 1338/2001 of 28 June 2001

text: laying down measures necessary for the protection of the euro against counterfeiting (OJ L 181, 4.7.2001, p. 6).

text: 4 See

text: Article 2

text: (b) of the draft royal order.

text: 5 See

text: Article 2

text: (c) of the draft royal order. the management of the State’s euro coin stocks and the stamps and models not necessary for the production of Dutch euro coins and ‘coins not holding the status of legal tender’ . 1.3 As noted in the explanatory memorandum accompanying the draft law, the main reasons for the transfer to DNB of the abovementioned public coin tasks are related to the new strategic direction for the State’s shareholding in the Mint. On 22 November 2016 the State’s shares in the Mint were sold to Groep Heylen, which means that the Mint will have a private shareholder and it will no longer be appropriate for it to carry out public coin-related tasks. DNB already has a similar responsibility concerning euro banknotes as well as some public tasks in respect of coins, and is therefore well positioned to perform these additional tasks relating to coins. 1.4 As noted in the Minister of Finance’s request for an opinion, to ensure compliance with the prohibition of monetary financing an agreement will be concluded between the Ministry of Finance and DNB that will provide for sufficient funds to be paid in a timely manner, on the first working day of the year, from the State Treasury to DNB. The amount to be paid to DNB will fully cover the costs of the new tasks expected in that year.

text: 2. General observations

text: 2.1 The draft laws complement DNB’s existing tasks in the field of protection against counterfeiting and, hence, do not confer genuinely new tasks in this area. DNB has already been appointed to carry out the tasks of the National Analysis Centre (NAC), which concern suspect counterfeit euro banknotes . The ECB notes that the protection of the euro against counterfeiting of both banknotes and coins will be henceforth in the hands of one single authority, DNB. While DNB acts within the Eurosystem framework with regard to the protection of euro banknotes, its new euro coin-related tasks are conferred upon it as a function other than those specified in the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’), which shall be performed in accordance with Article 14.4 of the Statute of the ESCB and shall not be regarded as forming part of the functions of the Eurosystem. 2.2 The draft royal order further complements DNB’s existing tasks with respect to the circulation and recirculation of euro circulation coins and, hence, does not confer genuinely new tasks.

text: 3. Specific observations

text: 3.1 Coin terminology 3.1.1 The ECB notes that the draft royal order makes use of the coin-related terminology used in certain existing provisions of Dutch coinage legislation, which refer to euro coins, special coins that hold the status of legal tender and coins for investment purposes . This terminology is not consistent

text: 6 See

text: Article 2

text: (d) of the draft royal order.

text: 7 Royal Order of 6 December 2001 for creation of a National Analysis Centre against counterfeiting, Staatscourant 2001/244.

text: 8 See Dutch Coin Act 2002, Staatsblad 2001/631; Royal Order on Special Coins of 7 January 2002, Staatsblad 2002/24. with the terminology established by the relevant Union legislation for euro coins, namely (1)

text: Council Regulation (EU) No 729/2014

text: , and (2)

text: Regulation (EU) No 651/2012

text: of the European Parliament and of the Council . In particular,

text: Article 2 of Regulation (EU) No 729/2014

text: contains a definition of ‘circulation coins’, which includes both ‘regular coins’ and ‘commemorative coins’; and

text: Article 1(3) of Regulation (EU) No 651/2012

text: contains a definition of ‘collector coins’, meaning euro coins intended for collection that are not issued with a view to their entry into circulation. The ECB understands that, where the draft royal order uses the term ‘euro coins’, it intends to refer to circulation coins, including both regular coins and commemorative coins. The ECB further understands that where the draft royal order uses the terms ‘special coins that hold the status of legal tender’ and ‘coins for investment purposes’, it intends to refer to two specific kinds of collector coins, both of which, consistent with

text: Article 5(1) of Regulation (EU) No 651/2012

text: , have the status of legal tender only in the Netherlands. The ‘special coins that hold the status of legal tender’ refer to collector coins issued in denominations of five, ten, twenty and fifty euro. The ‘coins for investment purposes’ refer to collector coins which may be issued pursuant to a 2015 amendment to the Dutch Coin Act . This amendment to the Dutch Coin Act was made to meet a possible demand on a part of the general public at that time to convert their savings into pure and standardised precious metal products. The quality of the metals contained in these collector coins exceeds even the quality of the other collector coins. For the sake of consistency and legal certainty, it would be helpful if the terminology used in Dutch law for these different kinds of coins could be better aligned with the terminology used in Union law. 3.1.2 In accordance with

text: , euro collector coins are not issued with a view to their entry into circulation. Consistent with this, the draft royal order could usefully be amended so as to make reference to the sale, rather than the circulation, of collector coins. 3.2 Prohibition on monetary financing 3.2.1 The monetary financing prohibition is laid down in Article 123(1) of the Treaty and replicated in Article 21.1 of the Statute of the ESCB, and prohibits overdraft facilities or any other type of credit facility with the ECB or the national central banks (NCBs) in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States. The precise scope of application of the monetary financing prohibition is further clarified by

text: Council Regulation (EC) No 3603/93

text: . 3.2.2 Article 128(2) of the Treaty provides that the right to issue euro coins rests with the Member States. Consequently, it is up to each Member State to specify the legal issuer of the euro coins . In view of the fact that the tasks conferred on DNB by the draft laws complement existing tasks of DNB but do not constitute genuinely new tasks in the field of protection against counterfeiting and circulation

text: Council Regulation (EU) No 729/2014 of 24 June 2014

text: on denominations and technical specifications of euro coins intended for circulation (OJ L 194, 2.7.2014, p. 1).

text: Regulation (EU) No 651/2012

text: of the European Parliament and of the Council of 4 July 2012 on the issuance of euro coins (OJ L 201, 27.7.2012, p. 135).

text: 11 See

text: Article 4

text: a of the Dutch Coin Act 2002, which followed from the Amendment Law on financial markets 2015, Staatsblad 2014/472.

text: Council Regulation (EC) No 3603/93 of 13 December 1993

text: specifying definitions for the application of the prohibitions referred to in Articles

text: and

text: b (1) of the Treaty (OJ L 332, 31.12.1993, p. 1). See also paragraph 3.2.1 of Opinion

text: 13 See paragraph 2.1 of Opinion

text: and paragraph 2 of Opinion

text: . of coins, the ECB welcomes the Minister of Finance’s clarification that an agreement will be concluded between the Ministry of Finance and DNB. This agreement will provide for full remuneration, to be paid by the State to DNB in a timely manner at the beginning of each year from funds held by the State Treasury, of the costs to be incurred by DNB in carrying out the tasks expected in the coming year . 3.2.3 For the time being, the ECB is not in a position to assess the way in which the abovementioned reimbursement will be agreed upon. The ECB would therefore appreciate receiving a copy of the draft agreement between the Ministry of Finance and DNB prior to its execution and entry into effect . This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 5 December 2016. [signed] The President of the ECB Mario DRAGHI

text: 14 See paragraph 3.2.2 of Opinion

text: and paragraph 3.1.9 of Opinion

text: 15 See paragraph 2.2 of Opinion


title: Opinion of the European Central Bank of 13 December 2016 on the auditing of Banka Slovenije’s business operations (CON/2016/59)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 13 December 2016 on the auditing of Banka Slovenije’s business operations (

text: ) Introduction and legal basis

text: On 11 November 2016 the European Central Bank (ECB) received a request from the Slovenian Ministry of Finance for an opinion on a draft law amending the Law on Banka Slovenije (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of

text: Article 2(1) of Council Decision 98/415/EC

text: , as the draft law relates to Banka Slovenije. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: 1.1 Banka Slovenije is currently subject to an audit of its financial accounts pursuant to Article 27.1 of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’). The purpose of the draft law is to establish rules for the auditing of Banka Slovenije’s operations by the national Court of Audit in a manner compatible with the principle of central bank independence . 1.2 Pursuant to the draft law, the Court of Audit must audit the regularity and ‘efficiency’ of Banka Slovenije’s business operations. However, a footnote to the text of the draft law indicates that, as part of the preparatory legislative process, the Court of Audit has proposed that, under the draft law, the Court of Audit must audit the regularity and ‘performance’ and not the efficiency of Banka Slovenije’s business operations. The Law on the Court of Audit defines the concepts of ‘regularity’, ‘efficiency’ and ‘performance’ audits . Pursuant to Article 20(3) of the Law on the Court of Audit, (i) a ‘regularity audit’ means obtaining relevant and sufficient data to enable an opinion to be expressed on the compliance of an operation with regulations and guidelines that any user of public funds is required to observe in the conduct of an operation and (ii) a ‘performance audit’

text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: 2 Pursuant to Article 1 of the Law on the Court of Audit, the Court is the supreme audit institution for the supervision of state accounts, the state budget and all public spending in Slovenia. In relation to other state authorities, the Court of Audit is an autonomous and independent authority.

text: 3 The draft law provides for the introduction of these rules by adding a new article to the Law on Banka Slovenije. Zakon o Banki Slovenije (ZBS-1) (Ur. l. RS No 72/06 – official consolidated text, and 59/11).

text: 4 See paragraph 4.2 of Opinion

text: and paragraph 2.2 of Opinion

text: . All ECB Opinions are published on the ECB’s website at www.ecb.europa.eu. means obtaining relevant and sufficient data to enable an opinion to be expressed on the economy, efficiency and effectiveness of a business operation . Hence, an ‘efficiency audit’ is one of the three types of audit that are categorised as performance audits . 1.3 The draft law expressly excludes from the scope of audit any actions that constitute decisions on the implementation of monetary policy, in accordance with the rules established by the decisionmaking bodies of the ECB. 1.4 The draft law further provides that in the auditing of supervisory duties the audit does not cover the application and interpretation of supervisory law and practices carried out by Banka Slovenije on the basis of the Law on Banka Slovenije or other provisions and within the framework of the single supervisory mechanism (SSM) on the basis of

text: Council Regulation (EU) No 1024/2013

text: . However, a footnote to the text of the draft law indicates that, as part of the preparatory legislative process, the Court of Audit has proposed that the reference to the Law on Banka Slovenije and other provisions should be deleted from this carve-out, with the result that the carve-out would only cover the application and interpretation of supervisory law and practices carried out by Banka Slovenije on the basis of

text: Regulation (EU) No 1024/2013

text: . In addition, the draft law provides that in the auditing of supervisory duties the audit does not interfere with or include the competences of Banka Slovenije, which Banka Slovenije exercises as part of the European System of Central Banks (ESCB), or the Eurosystem, or as a member of the European System of Financial Supervision, as part of the activities of the European Banking Authority, the European Systemic Risk Board, and the Single Resolution Mechanism. Moreover, the draft law provides that in the auditing of supervisory duties the audit is not so broad as to result in an indirect audit of the ECB, other members of the ESCB, or the Eurosystem. 1.5 The draft law provides that, notwithstanding the provisions of the Law on the Court of Audit, Banka Slovenije is not obliged to submit to the Court of Audit reports concerning the elimination of irregularities and inexpediencies identified. The draft law further specifies that Banka Slovenije must explain any deviation from the recommendations or requirements proposed by the Court of Audit in its audit report. However, the text of the draft law places the reference to ‘requirements’ in square brackets and a footnote indicates that the inclusion of this term is on the proposal of the Court of Audit. 1.6 The draft law provides that confidential information, within the meaning of Article 37 of the Statute of the ESCB, may be obtained by the Court of Audit in accordance with the rules governing the operations of the ESCB. It provides further that other confidential information, including statistical and supervisory data, whose exchange is regulated by Union rules, may be obtained by the Court of Audit in accordance with these rules. The draft law also lays down that the auditors and officers of the Court of Audit and other persons who are in any legal relationship whatsoever with the Court of Audit must keep confidential all information which they learn when auditing Banka Slovenije. If information is requested from the Court of Audit pursuant to public access legislation, the Court

text: 6 See paragraph 2.2 of Opinion

text: Council Regulation (EU) No 1024/2013 of 15 October 2013

text: conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 5). may only disclose information of that kind under the conditions governing the disclosure of information applicable to Banka Slovenije. 1.7 The draft law clarifies that, notwithstanding the provisions of the Law on the Court of Audit, the Court of Audit has no powers to propose the dismissal of members of the Governing Board of Banka Slovenije. Furthermore, the draft law requires the Court of Audit, when exercising its auditing powers, not to interfere in the activities of independent external auditors appointed in accordance with Article 52 of the Law on Banka Slovenije.

text: 2. Observations

text: 2.1 The ECB notes that it has been consulted by the Slovenian authorities on draft legislation relating to the auditing of Banka Slovenije’s operations by the Court of Audit on three occasions in recent years . It is understood that the previous legislative initiatives were not adopted, and that the draft law is the product of further consultations and changes. The draft law takes into consideration, inter alia, the concerns raised by the ECB in particular as regards the protection of central bank independence. The ECB notes that some of the provisions of the draft law respond to the previous opinions of the ECB, in particular ECB Opinion

text: . The ECB reiterates the views expressed in Opinion

text: and has the following additional comments to make in relation to the draft law. 2.2 The ECB observes that, in principle, a state audit office or similar body that controls the use of public finances, such as the Court of Audit, may undertake an audit in respect of an NCB’s activities the activities and use of public finances. However, any state audit office or similar body entrusted with such competences must be subject to a number of safeguards designed to ensure compliance with the principle of central bank independence: (a) the scope of the control should be clearly defined by the legal framework; (b) the activities of the NCB’s independent external auditors should not be prejudiced; (c) in line with the principle of institutional independence, as enshrined in Article 130 of the Treaty and Article 7 of the Statute of the ESCB, the audit should: (i) comply with the prohibition on giving instructions to an NCB and its decision-making bodies, (ii) not interfere with the NCB’s ESCB-related tasks, and (iii) be carried out on a non-political, independent and purely professional basis . 2.3 The ECB notes that the draft law excludes from the scope of audit any actions representing the definition and implementation of monetary policy in accordance with rules set by the decisionmaking bodies of the ECB. 2.4 It is not clear whether it is the intention of the draft law also to specify that the Court of Audit’s audit may not interfere with or include Banka Slovenije’s competences as part of the ESCB or the Eurosystem. The relevant provision introducing this carve-out is linked to the auditing of supervisory duties only. However, the carve-out should cover Banka Slovenije’s competences as part of the ESCB or the Eurosystem. Namely, if the legislative intention is not to establish a carveout from the Court of Audit’s audit in respect of Banka Slovenije’s competences as part of the

text: 8 See Opinions

text: and

text: 9 See paragraph 4.4 of Opinion

text: , paragraph 4.2 of Opinion

text: and paragraph 2.1 of Opinion

text: ; see also ECB Convergence Report June 2016, pp. 26-27. ESCB or the Eurosystem, except with regard to the definition and implementation of monetary policy, this would breach the requirements of central bank independence under Article 130 of the Treaty and Article 7 of the Statute of the ESCB. As noted in paragraph 2.2 above, and in the ECB’s previous opinions, central bank independence requires that the audit may not interfere with Banka Slovenije’s ESCB-related tasks . 2.5 The ECB recognises the consideration given in the draft law to the principle of independence set out in

text: Article 19 of Regulation (EU) No 1024/2013

text: , according to which, the ECB and the national competent authorities when acting within the SSM must act independently and the governments of the Member States and any other bodies must respect that independence, and the respect shown for the limitations provided in Article 27.2 of the Statute of the ESCB and

text: Article 20(7) of Regulation (EU) No 1024/2013

text: with regard to the supervisory tasks conferred on the ECB by that Regulation. The ECB notes that the audit carried out by the Court of Audit on Banka Slovenije’s supervisory activities should (a) not extend to the application and interpretation of supervisory law and practices in the context of the SSM; (b) not interfere with and not include the tasks conferred on the ECB by

text: Regulation (EU) No 1024/2013

text: , and (c) not extend to result in an indirect audit of the ECB. As already noted by the ECB, the audit should also be carried out on a non-political, independent and purely professional basis . The ECB understands that the audit should also not extend as to result in an indirect audit of the ECB, other members of the ESCB, or the Eurosystem. However, the current wording of the draft law could be drafted more clearly so as to expressly clarify that the audit shall not entail indirect auditing of the ECB, other members of the ESCB, or the Eurosystem. 2.6 The ECB acknowledges the express provision in the draft law indicating that Banka Slovenije is not required to submit reports to the Court of Audit concerning the elimination of irregularities and inexpediencies identified, but must explain any deviation from its recommendations. As stated in an earlier Opinion, the ECB understands that by referring only to recommendations of the Court of Audit and to the ‘comply or explain’ principle, the draft law would ensure that Banka Slovenije is not bound by the opinion of the Court of Audit and therefore the Court of Audit may not give instructions to Banka Slovenije . However, any references in the draft law to ‘requirements’ in addition to recommendations of the Court of Audit would not comply with the prohibition on giving instructions to Banka Slovenije and its Governing Board. 2.7 The ECB notes that the draft law’s provisions on the Court of Audit’s access to confidential information make reference both to Article 37 of the Statute of the ESCB and to applicable Union laws, including those governing the exchange of statistical and supervisory information. These provisions are beneficial from the perspective of legal certainty . However, insofar as it is intended to establish carve-outs under the draft law from the ambit of the Court’s audit in respect of Banka Slovenije’s competences as part of the ESCB, the Eurosystem and the SSM and to ensure the safeguards mentioned above, it is difficult to imagine types of confidential information within the

text: 10 Pursuant to Article 2 of the Law on Banka Slovenije, the principle of central bank independence should be respected not only when Banka Slovenije performs ESCB-related tasks, but also when it performs national tasks. See footnote 6 of the Opinion

text: , footnote 19 of the Opinion

text: and footnote 7 of the Opinion

text: 11 See paragraph 2.2 of Opinion

text: and paragraph 4.3 of Opinion

text: 12 See paragraph 2.2 of Opinion

text: 13 See paragraph 2.3 of Opinion

text: . meaning of Article 37 of the Statute of the ESCB and other statistical and supervisory data whose exchange is regulated by

text: Article 27 of Regulation (EU) No 1024/2013

text: and other Union law to which the Court could have access . 2.8 Finally, in case this draft law undergoes substantial amendments of a non-technical nature compared with the version received and opined on herein, the ECB should be consulted in relation to those amendments . This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 13 December 2016. [signed] The President of the ECB Mario DRAGHI

text: 14 See paragraph 3.1.6 of Opinion

text: 15 See the Guide to consultation of the European Central Bank by national authorities regarding draft legislative provisions, dated October 2015. The Guide is available on the ECB’s website at www.ecb.europa.eu.


text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: Law No 6/1993 Coll.

text: Articles 27

text: to 29a of the Law on ČNB.

text: Draft new Article 32 of the Law on ČNB.

text: Law No 374/2015 Coll. on recovery and resolution in the financial market and Law No 21/1992 Coll. on banks.

text: Draft new

text: Article 33

text: a of the Law on ČNB.

text: See the explanatory memorandum, p. 22-23. The explanatory memorandum is available in Czech on the Czech Government’s website at www.odok.cz.

text: Draft new Article 40(1) of the Law on ČNB. According to the explanatory memorandum, this is not meant to be a new statutory task. 10 Law No 136/2011 Coll. 11 Draft new Article 20 of the Law on ČNB as regards issue of trade coins and draft new Article 16(2) of the Law on ČNB law as regards commemorative banknotes.

text: Draft new Article 2(3) of the Act No. 136/2011 Coll., on the circulation of banknotes and coins and on the amendment of Act No. 6/1993 Coll., on the Czech National Bank. 13 Directive

text: of the European Parliament and the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending

text: Council Directive 82/891/EEC

text: , and Directives

text: and

text: , and Regulations

text: (EU) No 1093/2010

text: and

text: (EU) No 648/2012

text: , of the European Parliament and of the Council (OJ L 173, 12.6.2014, p. 190). 14 ECB Convergence Report 2016, p. 33; see also paragraph 3.1.3 of Opinion

text: . All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.

text: Article 1

text: a of the Law on ČNB. 16 Paragraph 4 of Opinion

text: and paragraph 4 of Opinion

text: . 17 Other than the insertion of a footnote reference to Article 123(2) of the Treaty. 18 OJ L 118, 30.4.2013, p. 37.

text: Citations are added to Articles

text: and

text: f of the Law on ČNB.

text: Article 2

text: a of

text: Council Regulation (EC) No 2533/98 of 23 November 1998

text: concerning the collection of statistical information by the European Central Bank (OJ L 318, 27.11.1998, p. 8).

title: Opinion of the European Central Bank of 15 December 2016 on the powers of Česká národní banka to conduct financial market transactions (CON/2016/60)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 15 December 2016 on the powers of Česká národní banka to conduct financial market transactions (

text: ) Introduction and legal basis

text: On 24 November 2016 the European Central Bank (ECB) received a request from the Minister of Finance of the Czech Republic for an opinion on a draft law amending the Law on Česká národní banka and the Law on the circulation of banknotes and coins (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the first, third and sixth indents of

text: Article 2(1) of Council Decision 98/415/EC

text: , as the draft law contains provisions relating to currency matters, Česká národní banka and rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: 1.1. The main purpose of the draft law is to amend certain provisions of the Law on Česká národní banka , which are seen as not sufficiently reflecting or in step with developments in the conduct of monetary and macroprudential policy, particularly regarding the central bank’s monetary and macroprudential policy instruments. The draft law aims therefore to give Česká národní banka (ČNB) the flexibility to use a wider range of monetary and macroprudential policy instruments to protect the financial system against threats to financial stability. In place of the current provisions on transactions conducted with banks and other transactions, which specify which types of transaction ČNB may enter into and with what types of institution, the draft law authorises ČNB to conduct transactions in the financial market generally and sets out a non-exhaustive list of such transactions and their counterparties . The draft law also changes the formula for setting the penalty interest to be applied for a breach of minimum reserve requirements to make it a more effective sanction. 1.2. The draft law also amends the rules allowing ČNB to provide emergency liquidity assistance to permit ČNB, in the interests of maintaining the liquidity of a bank, foreign bank branch or credit

text: union, to exceptionally provide an institution of that kind with short-term credit, if adequately collateralised, or to enter into a repo transaction for up to three months. Furthermore, if the Guarantee System for the Financial Market (GSFM) has insufficient funds to perform its tasks arising under the legislation governing deposit insurance and this situation might jeopardise stability in the financial market, the draft law authorises ČNB in urgent cases to provide the GSFM, upon request, with short-term credit or enter into a repo transaction with the GSFM for a maximum period of three months . 1.3. The draft law also amends provisions of the Law on ČNB concerning ČNB’s other statutory activities. The most significant amendment is the express authorisation of ČNB to establish or participate in the capital of another legal entity in order to support the carrying out of ČNB’s tasks . According to the explanatory memorandum to the draft law this is not a new power but simply a clarification for reasons of legal certainty. Until now this power has been derived from an interpretation of the general wording of Article 40 of the Law on ČNB, which provides that ČNB is entitled to engage in investment activity. According to the explanatory memorandum, the said authorisation is without prejudice to the responsibility of ČNB for the proper performance of its central bank objectives and tasks. It is also explained that it is without prejudice to the prohibition of monetary financing, set out in

text: Article 34

text: a (1) of the Law on ČNB, which means that any ‘form of arrangement is excluded which might lead to the provision of credit by the central bank to the State, to another public law entity or to a person under the public law entity’s control or which might entail any form of financing of State tasks by the central bank’ . 1.4. In addition, ČNB’s other activities are extended to expressly include ‘security activities insofar as is necessary to provide for its own operations’ . According to the explanatory memorandum this is not a new power but simply a clarification for reasons of legal certainty. Until now this power has been derived from an interpretation of the general wording of

text: Article 47

text: a of the Law on ČNB, which provides that ČNB shall manage its assets with due diligence. As regards consumer credit secured by residential property, the draft law introduces a macroprudential regulatory regime for credit indicators to be used by providers of consumer credit, allowing ČNB to set upper limits on selected credit indicators concerning consumer credit secured by residential property if it identifies systemic risks related to the provision of the credit. 1.5. In the area of banknotes and coins, the draft law amends the Law on ČNB and consequentially the Law on the circulation of banknotes and coins , authorising ČNB to issue commemorative banknotes and trade coins . The term ‘commemorative banknote’ is defined as a domestic banknote intended for collection which is defined as a commemorative banknote by an

text: implementing legal rule governing its issuance . Trade coins will not be legal tender and have no par value. 1.6. Finally, the draft law makes a number of technical amendments to the Law on ČNB, principally concerning ČNB’s cooperation with foreign or other international organisations, its financial management, statistical reporting and annual reporting. As regards annual reporting, the disclosure of salaries in ČNB’s annual financial report is extended to include the senior officers reporting directly to ČNB’s Board and remote access to the annual report is introduced.

text: 2. General observations

text: The ECB broadly welcomes the draft law, which is generally designed to bring the Law on ČNB in line with the statutory framework of the European System of Central Banks (ESCB) with respect to the conduct of monetary policy, particularly regarding ČNB’s monetary and macroprudential policy instruments, and other activities of ESCB members.

text: 3. Specific observations

text: 3.1 The ECB welcomes the broadening of the provisions of the Law on ČNB concerning ČNB’s transactions on the market to allow it to conduct a wider range of transactions with financial market participants. The ECB notes that the provisions of the draft law which deal with ČNB’s open market and credit operations are inspired in this regard by the wording of Article 18 of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’). 3.2 The ECB also welcomes the provisions of the draft law clarifying the conditions for ČNB’s provision of urgent, short-term liquidity to the GSFM. The ECB understands that the reference to ‘tasks arising under the legislation governing deposit insurance’ is a consequential amendment necessitated by the legislation implementing Directive

text: of the European Parliament and of the Council , which specifies the tasks and financing of the deposit guarantee scheme (DGS), as distinct from the resolution fund, which although also administered by the GSFM, must not be financed by ČNB by reason of the prohibition of monetary financing under Article 123 of the Treaty. The ECB considers that in this respect the draft law is in line with the ECB’s position according to which national legislation that provides for the financing by a national central bank (NCB) of a national DGS for credit institutions is compatible with the monetary financing prohibition only if it is short term, addresses urgent situations, systemic stability aspects are at stake, and decisions are at the NCB’s discretion . The ECB notes that the draft law aims to fully reflect these criteria by also specifying that the funding may be granted only in urgent cases. Furthermore, the draft law enables

text: ČNB to enter into a repurchase transaction (repo) with the GSFM as an alternative to a short term credit facility. The ECB considers repo operations to fall within the concept of a ‘credit facility’ for the purposes of assessing the compliance of such transactions with the prohibition of monetary financing under Article 123 of the Treaty. This is because repo operations entail the creation of a claim in favour of ČNB against the GSFM, as ČNB would have the right to be repaid the cash amount, increased by the applicable repo rate, upon the transfer back to GSFM of the collateral securities. 3.3 The ECB notes that the draft law permits ČNB to establish a legal entity or acquire holdings therein in order to support the carrying out of its tasks. The ČNB’s tasks include the task of contributing to the tasks and objectives of the ESCB pursuant to the Treaty and the Statute of the ESCB . Tasks assigned to the ESCB by the Treaty and the Statute of the ESCB must be fulfilled by the ECB and the NCBs . As a consequence, ČNB’s ESCB-related tasks must not be transferred to another legal entity. Activities that are ancillary and preparatory to these tasks may be outsourced if ČNB retains full legal responsibility and maintains supervision and control over the relevant activities, in particular to ensure that the applicable legal regime, including confidentiality provisions, is maintained. The ECB invites ČNB to seek the ECB’s views if ČNB intends to make arrangements using the power to establish a legal entity or acquire holdings therein in order to support the carrying out of its ESCB-related tasks. 3.4 In addition, the ECB understands that ČNB’s establishment of, or acquisition of any holding in, another legal entity will be without prejudice and subject to the monetary financing prohibition under Article 123 of the Treaty, as referred to in

text: Article 34

text: a of the Law on ČNB, which is not amended and applies across the Law on ČNB. In this regard, The ECB wishes to emphasise in this respect that ČNB must not establish another legal entity which is involved in the performance of a government task without being adequately remunerated in advance for the costs involved, and that ČNB must in no event assume or finance, even in its capacity as shareholder, any obligation of such a legal entity, for example, a bridge bank for the purposes of bank resolution. 3.5 The ECB notes that ČNB will be authorised to issue commemorative banknotes. The competence to decide on the denominations and specifications of banknotes denominated in national currency remains at the national level as long as the Czech Republic is a Member State with a derogation in accordance with Article 140(1) of the Treaty. As and when the Czech Republic’s derogation will be abrogated in accordance with Article 140(2) of the Treaty, this competence will be transferred to the ECB Governing Council. The existing Decision of the ECB of 19 April 2013 on the denominations, specifications, reproduction, exchange and withdrawal of euro banknotes (ECB/2013/10) does not refer to the issuance of commemorative euro banknotes, thus reflecting that no such notes may currently be issued by Eurosystem central banks. In addition, the potential issuance of commemorative banknotes of very high value could thwart efforts to combat money

text: laundering and terrorism financing, taking into account concerns that such banknotes could facilitate illicit activities. 3.6 Finally, the ECB welcomes the clarifying amendments in particular in the area of statistics and reporting, and the proposed inclusion of citations to relevant Union regulations on reporting and the sharing of confidential statistical information . These amendments are mainly aimed at dispelling any doubt that the relevant provisions of the Law on ČNB are in line with Union regulations. As regards

text: Article 43

text: b of the Law on ČNB, consistent with their approach to cite relevant provisions of Union legal acts in footnotes, the legislative authorities are invited to add a footnote reference to the relevant provision of

text: Council Regulation (EC) No 2533/98

text: from which the obligation of cooperation between the members of the ESCB and the European Statistical System derives.

text: This opinion will be published on the ECB’s website.

text: Done at Frankfurt am Main, 15 December 2016.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: OJ L 189, 3.7.1998, p. 42.

text: Regulation (EU) No 795/2014

text: of the European Central Bank of 3 July 2014 on oversight requirements for systemically important payment systems (ECB/2014/28) (OJ L 217, 23.7.2014, p. 16).

text: Regulation (EU) No 260/2012

text: of the European Parliament and of the Council of 14 March 2012 establishing technical and business requirements for credit transfers and direct debits in euro and amending

text: Regulation (EU) No 924/2009

text: (OJ L 94, 30.3.2012, p. 22).

text: Regulation (EU) 2015/751

text: of the European Parliament and of the Council of 29 April 2015 on interchange fees for card-based payment transactions (OJ L, 123, 19.5.2015, p. 123).

text: United Kingdom of Great Britain and Northern Ireland v European Central Bank,

text: . ECLI:EU:T:2015:133.

text: Directive (EU) 2015/2366

text: of the European Parliament and the Council on payment services in the internal market, amending Directives

text: and

text: and

text: Regulation (EU) No 1093/2010

text: , and repealing Directive

text: (OJ L 337, 23.12.2015, p. 35).

text: See the Regulation on the oversight of the smooth operation of payment traffic (‘betalingsverkeer’) adopted by the Netherlands, in respect of which the ECB issued its Opinion

text: , all ECB opinions are published on the ECB’s website www.ecb.europa.eu .

title: Opinion of the European Central Bank of 28 December 2016 on a Belgian draft law on the oversight of payment transaction processors (CON/2016/61)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 28 December 2016 on a Belgian draft law on the oversight of payment transaction processors (

text: ) Introduction and legal basis

text: On 18 November 2016, the European Central Bank (ECB) received a request from the Governor of the Nationale Bank van België/Banque Nationale de Belgique (NBB), on behalf of the Minister of Finance, for an opinion on a draft law on the oversight of payment transaction processors (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the second, third and fifth indents of

text: Article 2(1) of Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , since the draft law concerns means of payment, the NBB and payment and settlement systems. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft Law

text: 1.1. The main objective of the draft law is to equip the NBB with hard-law tools in order to facilitate the application of the oversight policy framework to systemically important payment transaction processors. The preparatory text regarding the draft law explains that the soft-law approach implemented to date by the NBB in this area has limitations, as demonstrated by the recent adoption of

text: Regulation (EU) No 795/2014

text: of the European Central Bank (ECB/2014/28) . 1.2. The draft law defines the concept of ‘payment transaction processors’ as referring to any natural or legal person who implements technical processes that are necessary and specifically intended to execute payment transactions. As a consequence, general support service providers, including financial messaging companies, would be excluded from the scope of the draft law as their services are not specific to payment transactions. The draft law defines payment transactions as actions initiated by the payer or the payee, which involve the transfer of scriptural money, irrespective of any underlying obligation between the payer and the payee, during the course of which the payment transaction is executed between different payment service providers, with both the payer’s and the payee’s payment service providers operating in Belgium. The draft law further excludes from its scope the processing of certain paper-based documents drawn on the payment

text: service provider with a view to placing scriptural money at the disposal of the payee, these documents include paper cheques and paper-based bills, vouchers, paper-based traveller’s cheques and postal money orders. The draft law also excludes from its scope the processing of payment transactions within a payment or securities settlement system and the processing of direct debit or credit transfer schemes. 1.3. The draft law defines a payment processor that is considered to be systemically important in the Belgian payment transactions market as a processor providing processing services for a minimum of 125 million payment transactions in the previous calendar year using a specific payment scheme, regardless of whether the processor has its registered office in Belgium. Systemically important processors are to be subject to a comprehensive legal framework, composed of the following building blocks. First, mergers and acquisitions involving systemically important processors must be submitted for prior authorisation by the NBB, which may impose specific conditions on them or reject them if such mergers or acquisitions undermine the sound and prudent management of processors of systemic importance and the continuity and stability of payments in Belgium. Second, systemically important processors must comply with the following conditions in order to outsource important operational tasks for processing payment transactions: (a) the processor must obtain prior authorisation from the NBB for the outsourcing; (b) the outsourcing must not result in the delegation by senior management of its responsibilities; (c) the outsourcing must not modify the relationship and obligations of the processor with or towards payment service providers and payment schemes; (d) the outsourcing must comply with the draft law and (e) the outsourcing must not undermine the quality of any internal control that would prevent the NBB from controlling the compliance, by the processor, with its obligations. Third, the draft law imposes various obligations on systemically important processors that aim to equip them with a sound riskmanagement framework for comprehensively identifying sources of operational risks, both internal and external, and minimising their impact by deploying appropriate controls, systems and procedures. Fourth, the draft law contains specific requirements as regards the confidentiality and integrity of information as well as the continuous provision of services. In particular, systemically important processors must inform the NBB of any temporary unavailability of their services. 1.4. The draft law subjects payment transaction processors to some of the hard-law components of the oversight framework currently applicable to payment and securities settlement systems. To ensure their compliance with the above-mentioned oversight framework, processors must provide the NBB with regular information on their organisation, functioning, financial situation and operations. The NBB will have the power to conduct on-site inspections to gather additional information, and may impose remedial measures in the event of breaches of the oversight framework requirements. The NBB’s sanctioning committee may also impose fines, while the NBB may, in extremis, prevent payment schemes from using the services of a processor or prevent a processor from outsourcing its activities if the above-mentioned requirements are not complied with. 1.5. The draft law also includes specific requirements applicable to payment schemes that operate in Belgium. The definition of payment schemes under the draft law is drawn from Regulation (EU)

text: (No) 260/2012 of the European Parliament and of the Council and

text: Regulation (EU) 2015/751

text: of the European Parliament and of the Council and refers to ‘a single set of rules, practices, standards and/or guidelines, operating in Belgium, agreed between the payment service providers for the execution of payment transactions, which is separate from any infrastructure or payment system that supports its operation and which comprises a specific decision-making body, organisation or entity responsible for the operation of the payment scheme’. The draft law requires the a payment scheme: (a) to transmit information on the payment transaction processor that it uses; (b) to ensure that any of its systemically important processors are able to comply with the requirements imposed by the draft law and (c) to provide, at the NBB’s request, information on its organisation, operations and financial standing and the payment transactions it processes. The NBB may impose administrative fines on payment schemes in breach of any of these requirements. 1.6. Taking note of the judgment of the European Court of Justice’s case

text: , the draft law also amends Article 8 of the Organic Statute of the NBB relating to the oversight of payment and clearing systems, in order to expressly refer to securities settlement systems that are subject to the NBB’s oversight. The draft law also formally empowers NBB to enact regulations in this field. Finally, under the draft law, the NBB and its agents may only be held civilly liable for decisions taken regarding market infrastructures’ oversight in the event of fraud or gross negligence.

text: 2. Hard-law oversight framework for systemically important payment transaction processors

text: 2.1. The draft law equips the NBB with hard-law tools to facilitate the implementation of its oversight framework, as previously extended to payment transaction processors. Hence, the draft law does not confer genuinely new tasks on the NBB. 2.2. The ECB understands that the draft law relates to service providers involved in the technical support of the payment services chain and who do not directly fall within the ambit of any existing Union legal framework. On the one hand, such payment transaction processors may not be assimilated to payment service providers under

text: Directive (EU) 2015/2366

text: of the European Parliament and the Council , as such processors facilitate the operational execution of payment services without providing payment services as such. On the other hand, the draft law explicitly excludes from its scope the treatment of payment transactions carried out within a payment or securities settlement system. Finally, although under the draft law payment transaction processors provide the technical infrastructure supporting the functioning of a ‘payment scheme’ within the meaning of

text: Regulation (EU) 2015/751

text: , they are not regarded as constituting a payment scheme.

text: 2.3. Currently, and without prejudice to initiatives taken at the domestic level by some Union Member States in this area , payment transaction processors are only indirectly included in the ECB’s oversight framework for payment schemes, insofar as such schemes are expected to ensure, through contractual arrangements, that the payment transaction processors used by the schemes respect any relevant requirements, including operational requirements. The ECB’s oversight framework for payment schemes assigns a leading role to the central bank that is best placed to fulfil the required oversight duties. Where there is no national anchor, the ECB’s Governing Council may assign primary oversight responsibilities to the ECB, with the participation of other interested Eurosystem NCBs as part of a cooperative oversight arrangement. According to this framework, the NBB is the single overseer of the Bancontact card payment scheme and the lead oversight authority of the MasterCard card payment scheme. The oversight of the MasterCard card payment scheme is implemented, according to cooperative oversight arrangements enjoying the participation of the ECB and a number of volunteer NCBs. The ECB is the lead overseer of the VISA payment scheme and the SEPA Credit Transfer and Directive Debit payment schemes of the European Payments Council. The oversight of other payment schemes has been assigned to the respective NCBs of the Member States where the schemes are established. 2.4. As emphasised in the preparatory text regarding the draft law, the approach described in paragraph 2.3 may no longer be sufficient. This is because, as a consequence of the gradual cross-border consolidation in the payment processing industry, which is not regulated as such at the European level, payment transaction processors may operate in a jurisdiction other than the jurisdiction where the payment scheme is located, without being necessarily subject to direct supervision or oversight in any jurisdiction. As these processors play a growing role in the build-up of operational risks connected to payment schemes, it is appreciated that the Belgian legislator wishes to set up a framework intended to facilitate the monitoring of operational risks posed by the gradual consolidation of payment transaction processors. However, the ECB considers that this framework needs to be designed in a way that fully takes into account the close interdependencies of these services with existing Union legislation, with which consistency should be ensured, and the crossborder dimension of these services. 2.5. In defining the concept of ‘payment scheme’ along the lines of the Regulations

text: (EU) No 260/2012

text: and

text: (EU) 2015/751

text: and excluding the treatment of payment transactions carried out within payment and securities settlement systems from the draft law’s scope, whether they are of systemic importance under

text: Regulation (EU) No 795/2014

text: (ECB/2014/28) or not, the draft law is sufficiently aligned with the definitions in current Union law. 2.6. The draft law has a clear cross-border impact, as it may relate to a systemically important payment transaction processor established in another Member State that is used by one or more payment schemes in Belgium. As a consequence, the draft law must be drafted in such a way that it avoids both any possible breach of Union law as regards the freedom to provide services under the Treaty and any potential conflict with the actions of the authorities in the Member State where the

text: payment transaction processor has its registered office. The ECB notes, in this respect, that, according to the preparatory text regarding the draft law, the restriction on the free provision of services introduced by the draft law is regarded as being compatible with the freedom to provide services across the Union as it ensures the stability, reliability and continuity of those services that are essential for the proper functioning of retail payment systems. 2.7. Although the draft law contains no formal mechanism for avoiding potential conflicts with the authorities of the Member State where the payment transaction processor has its registered office, the ECB assumes that the NBB will enter into a cooperative arrangement with any such authorities, in order to coordinate the oversight of a processor. From this perspective, the draft law could introduce an amendment to

text: Article 36

text: /16 of the Organic Statute of the NBB in order to enable the NBB to enter into cooperative arrangements with foreign authorities as regards payment transaction processors. It is acknowledged, however, that a cooperative cross-border regulatory approach in this area may be challenging insofar as the laws applicable in the jurisdiction in which a payment transaction processor is incorporated may not subject a processor to its regulatory and/or oversight frameworks, and may not contain similar tools and requirements as those contained in the draft law. 2.8. Whilst the ECB welcomes the draft law, which adequately equips NBB with hard-law tools facilitating the implementation of the oversight framework for payment schemes operated in Belgium, a truly European approach would be desirable in this field, in order to avoid fragmentation and the possible counterproductive effects of solutions designed solely at the national level. In the meantime the ECB assumes that the NBB will leverage the existing Eurosystem oversight framework for payment schemes when considering implementing these new hard-law tools, be it as the lead overseer of payment schemes operating in Belgium or as a participating NCB in a cooperative oversight arrangement for which another NCB or the ECB acts as the lead overseer.

text: 3. Amendments made to the NBB Organic Law as regards its oversight framework

text: The ECB welcomes the clarification that the draft law brings to Article 8 of the NBB Organic law by stating that the oversight of securities settlement systems is conducted in Belgium not only in accordance with the applicable Union rules, but also in accordance with the relevant Belgian laws.

text: Done at Frankfurt am Main, 28 December 2016.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI