text: See Article 51 of draft law No T/1705, available on the website of the Hungarian Parliament: www.parlament.hu. 2

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). 3 Approximately 17 million euro.

title: Opinion of the European Central Bank of 30 October 2014 on a specific tax benefit granted to financial institutions (CON/2014/77)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 30 October 2014 on a specific tax benefit granted to financial institutions (

text: ) Introduction and legal basis

text: On 1 October 2014, the European Central Bank (ECB) received a request from the Hungarian Ministry of National Economy (hereinafter the ‘consulting authority’) for an opinion on a draft law amending Law LIX of 2006 on a special and annuity tax to improve the balance of public finances (hereinafter the ‘draft law’). On 21 October 2014, the consulting authority submitted the draft law to the Hungarian Parliament for adoption in the Parliamentary procedure. 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 sixth indent of

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

text: , as the draft law relates to 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: The Hungarian Government intends to partially compensate Hungarian financial institutions for any losses their related undertakings operating in Ukraine have suffered as a direct result of the crisis in Ukraine, through a tax benefit scheme introduced under the draft law (hereinafter the ‘scheme’). The scheme allows those financial institutions to decrease their bank tax liability that would otherwise be payable under Law LIX of 2006. Portfolio investments are outside the scope of the scheme, as it only covers the loss in value of the related undertaking operating in Ukraine. Under the draft law, a financial institution could decrease its tax liability for the year 2014, payable in 2015, by the amount of the loss in value of its Ukrainian related undertaking up to a maximum of 5 billion forints . Any unused part of the available benefit could not be carried forward to subsequent tax years or applied retrospectively. Furthermore, if any of the losses incurred by a participating financial institution are recovered in subsequent years, the financial institution will have to repay the corresponding amount of the benefit.

text: 2. Observations

text: 2.1 Although the scheme is of general application, it is anticipated that only a limited number of financial institutions will be eligible to participate in the scheme. Furthermore, any losses incurred by such financial institutions as a result of losses incurred by their related undertakings in Ukraine are not expected to be substantial. It seems unlikely at the present time that this scheme, being temporary and limited in scope, would significantly influence the overall stability of financial institutions and markets in Hungary. 2.2 These observations are without prejudice to any assessment by other Union institutions with regard to compliance with Union law on competition and State aid.

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

text: Done at Frankfurt am Main, 30 October 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: on consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 2

text: Regulation (EU) No 575/2013

text: of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending

text: Regulation (EU) No 648/2012

text: (OJ L 176, 27.6.2013, p. 1). 3 Consolidated text published in Dziennik Ustaw (Dz. U.) of 2014, item 109.

publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 31 October 2014 on the legal framework for cooperative banks (CON/2014/78)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 31 October 2014 on the legal framework for cooperative banks (

text: ) Introduction and legal basis

type: rubrik

text: On 26 September 2014, the European Central Bank (ECB) received a request from the Polish Minister for Finance for an opinion on a draft law amending the Law on the functioning of cooperative banks, their affiliations and affiliating banks and certain other laws (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 sixth indent of

type: stycke

text: 1. Purpose of the draft law

text: The primary aim of the draft law is to amend the legal framework for cooperative banks in order to give effect to the streamlining resulting from

text: Regulation (EU) No 575/2013

text: of the European Parliament and of the Council . To this end, the draft law amends the Law on the functioning of cooperative banks, their affiliations and affiliating banks and certain other laws. The main changes that go beyond the adaptations required to give effect to

text: Regulation (EU) No 575/2013

text: are as follows: (a) The draft law modifies the method of calculating Polish currency equivalents of amounts originally expressed in euro, such as own funds requirements. The draft law aligns this method with the method used for the calculation of the Polish public debt. (b) Under the draft law the possibility for a cooperative bank participating in an affiliation of cooperative banks to terminate its membership in the affiliation will also be available for a cooperative bank that is a member of an institutional protection scheme. Such termination would be

text: subject to meeting certain capital and prudential requirements corresponding with those provided for in

text: Regulation (EU) No 575/2013

text: . (c) The draft law includes a technical amendment to the definition of the term ‘affiliating bank’. The current list of such banks, whose function is to support the affiliation and to perform certain tasks on behalf of cooperative banks participating in the affiliation, will be replaced by a set of criteria and requirements that need to be met by a credit institution in order for it to be deemed an affiliating bank.

text: 2. ECB comments

text: The ECB has no comments as regards the draft legislation.

text: Done at Frankfurt am Main, 31 October 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI

type: vagledning

utgivare: ecb


text: Predlog zakona o bančništvu (ZBan-2). 2 The revised provisions are

text: Articles 400

text: to 406 of the draft law. 3

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). 4 See Article 1(1) of the draft law. 5 Zakon o bančništvu (ZBan-1) (Official Journal of the Republic of Slovenia, no. 99/10 – official consolidated text, 52/11 corr., 9/11 - ZPlaSS-B, 35/11, 59/11, 85/11, 48/12, 105/12, 56/13, 63/13 - ZS-K and 96/13). 6 Directive

text: of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive

text: and repealing Directives

text: and

text: (OJ L 176, 27.6.2013, p. 338).

text: 8 Council (hereinafter the ‘CRR’). Certain elements of Directive

text: (hereinafter the ‘BRRD’) are transposed by the draft law, including provisions relating to early intervention measures, recovery plans and intra-group financial support. In the light of the establishment of the single supervisory mechanism (hereinafter the ‘SSM’), the draft law also adapts national law to

text: Council Regulation (EU) No 1024/2013

text: (hereinafter the ‘SSM Regulation’) and

text: Regulation (EU) No 468/2014

text: of the European Central Bank (hereinafter the ‘SSM Framework Regulation’). This adaptation includes, inter alia, the reflection of changes to the distribution of powers between the authorities involved in banking supervision. 1.3 Similarly to current requirements under the Law on banking with respect to the members of banks’ boards of management, the draft law introduces a requirement to obtain the authorisation of Banka Slovenije in order to perform the functions of a member of the supervisory board of a bank . The draft law also transfers from the Slovenian banking association to Banka Slovenije the responsibility to maintain the system for the exchange of bank information on client creditworthiness . 1.4 The draft law envisages the adoption of further legislation to regulate the winding up and resolution of banks, and to regulate the deposit guarantee scheme. According to the explanatory memorandum to the draft law, such future legislation is intended to fully transpose the BRRD and Directive

text: (hereinafter the ‘new DGS Directive’) into national law. Until the adoption of this legislation, the winding up and resolution of banks, and the deposit guarantee scheme will be regulated by the current Law on banking, as amended and extended in the recast effectuated by the draft law. The new amendments in this respect are as follows.

text: Regulation (EU) No 575/2013

text: Regulation (EU) No 648/2012

text: (OJ L 176, 27.6.2013, p. 1). 8 Directive

text: of the European Parliament and of 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). 9

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.63). 10

text: Regulation (EU) No 468/2014

text: (ECB/2014/17) of the European Central Bank of 16 April 2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities (SSM Framework Regulation) (OJ L 141, 14.5.2014, p. 1). 11 Article 55 of the draft law. 12

text: Articles 407

text: to 409 of the draft law in conjunction with

text: Article 390

text: .a of the Law on banking, as well as Article 397(3) of the draft law. 13 Directive

text: of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (OJ L 173, 12.6.2014, p. 149). 14 The current deposit guarantee scheme is governed by Chapter 8 of the Law on banking.

text: Articles

text: and

text: (as revised) of the draft law. 17 Article 406 of the draft law. Banka Slovenije has other resolution tools at its disposal; see Chapter 7.7 of the Law on banking. 18 Article 398 of the draft law. 19 Article 399 of the draft law. 20 See Article 3(3) of the BRRD.

title: Opinion of the European Central Bank of 11 November 2014 on banking regulation (CON/2014/79)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 11 November 2014 on banking regulation (

text: ) Introduction and legal basis

text: On 1 October 2014, the European Central Bank (ECB) received a request from the Slovenian Ministry of Finance for an opinion on a draft law on banking (hereinafter the ‘draft law’). On 20 October 2014, the ECB received certain revised provisions of 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: , as the draft law relates to Banka Slovenije and to 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 regulates, inter alia, the conditions for the establishment, operation and winding up of credit institutions, the powers and procedures for supervising the activities of credit institutions, and the powers and procedures for managing macro-prudential and systemic risks relating to credit institutions . 1.2 The draft law is a recast of the current Law on banking . The main purpose of the amendments made by the draft law is to transpose or adapt national law to Union legislation prepared in the context of and as a response to the recent financial crisis. In particular, the draft law implements Directive

text: of the European Parliament and of the Council (hereinafter ‘CRD IV’) and adapts national law to

text: Regulation (EU) No 575/2013

text: of the European Parliament and of the

text: The deposit guarantee scheme

text: 1.5 The draft law introduces changes to the current deposit guarantee scheme . It provides for the transition from a scheme financed ex post to a scheme financed ex ante by establishing a deposit guarantee fund within Banka Slovenije. Pursuant to the draft law, the assets of the deposit guarantee fund will have a target level of 0.8% of the total guaranteed deposits in all banks. The

text: banks’ contributions to the deposit guarantee fund will be collected over time and will include regular and, if necessary, extraordinary contributions. The contributions paid into the fund will reduce the amount of liquid assets that the banks are required to hold for the purposes of the deposit guarantee scheme. Although it will have no legal personality, the deposit guarantee fund will be separate from Banka Slovenije and the latter will not be liable for the obligations of the fund. If the contributions from the banks and their liquid investments are insufficient or not available in time to cover the obligations of the deposit guarantee fund, the draft law envisages that alternative financing, including loans, or temporary financial assistance from the State, may be obtained by the fund to cover the financial shortfall. In addition to providing for the availability of the deposit guarantee fund to repay guaranteed deposits where a bank becomes bankrupt, the draft law also provides for the fund’s availability in the context of bank resolution. According to the draft law, where resolution measures grant depositors access to their guaranteed deposits and it is in the interest of financial stability, the deposit guarantee fund may be available in the resolution process up to the amount of the estimated loss that the fund would suffer in the event of bankruptcy proceedings. The deposit guarantee fund will be established within and managed by Banka Slovenije. Banka Slovenije will bear no liability for the obligations of the fund and the costs of Banka Slovenije relating to the management of the fund are to be recovered from the fund itself .

text: The resolution fund

text: 1.6 The draft law also provides for the establishment of a resolution fund. The banks will be required to make a capital investment in the resolution fund, in the form of cash, within a maximum period of three months from the entry into force of the draft law. This capital investment is to amount to 2.3% of the total guaranteed deposits in all banks. The banks’ investment in the resolution fund will not be transferable and will only be repaid to a bank if the bank is voluntarily or compulsorily liquidated, or if it commences bankruptcy proceedings. Pursuant to the draft law, Banka Slovenije may decide to activate the resolution fund where banks are in resolution if this is necessary for financial stability reasons. Activation of the resolution fund where a bank is in resolution may take the form of: (a) purchase of capital instruments of a bridge bank or of another bank in resolution; (b) a contribution to a transferee to cover a financial shortfall specifically arising from the transfer to it of the assets and liabilities of the bank in resolution; (c) a contribution to the compensation of shareholders and other creditors of the bank following bail-in, where the losses of the shareholders and other creditors of the bank are greater than they would be in the event of bankruptcy proceedings; and (d) loans, guarantees and the provision of other types of security interest to the bridge bank or another bank involved in the resolution process. In a similar manner to the deposit guarantee fund, the resolution fund will be established within Banka Slovenije. The resolution fund will have no legal personality but, according to the draft law, it will be liable for the obligations it assumes in the sense that assets in the fund will be available to

text: meet such obligations. Accordingly, the draft law states that Banka Slovenije will have no liability for the obligations of the resolution fund and that the costs incurred by Banka Slovenije in managing the fund will be covered by the fund itself .

text: Other amendments

text: 1.7 Other measures introduced by the draft law include: (a) a new resolution tool – the bridge bank ; (b) the possibility of early repayment of a bank’s liabilities where the bank is in the process of winding down gradually ; and (c) certain proposed amendments to the rules on the ranking of creditors’ claims in the event of a bank becoming bankrupt .

text: 2. General observations

text: 2.1 The draft law aims to integrate the Slovenian national banking supervisory structure into the SSM and to ensure that no legal obstacles arise under national law in relation to the performance by the ECB, with the assistance of the national competent authority, of its banking supervisory tasks under the SSM Regulation. The ECB understands that the rules are not intended to narrow or amend the scope of the SSM Regulation and the SSM Framework Regulation, which are directly applicable. In this regard, the ECB welcomes Articles 9 and 235 of the draft law, which make general reference to the division of powers under the SSM Regulation between Banka Slovenije and the ECB. 2.2 The draft law transposes certain elements of the BRRD, including provisions relating to early intervention measures, recovery plans and intra-group financial support. The ECB understands that the Slovenian authorities will transpose the remaining elements of the BRRD, as well as the new DGS Directive, in a separate law, which is intended to ensure full transposition of the abovementioned Union law into national law. In this context, the Slovenian authorities may also implement adequate structural arrangements to ensure the separation between the resolution function and Banka Slovenije’s other functions considering that Banka Slovenije is the national central bank and acts as both supervisory authority and resolution authority .

text: 3. Supervisory fees and fines

text: 3.1 Pursuant to Article 239 of the draft law, the banks are required to pay supervisory fees to Banka Slovenije to fund its supervisory tasks. The annual amount of the fees to be paid to Banka Slovenije shall not exceed the actual cost of supervision for that year. Income received from the proceeds of fees charged in relation to the issuance of authorisations and the supervisory procedures of Banka Slovenije is to be deducted from the cost of supervision. Pursuant to Article 265(6) of the draft law,

text: income received by Banka Slovenije from the proceeds of fines imposed on banks for breaches of prudential requirements shall become the revenue of Banka Slovenije and shall be taken into account in determining the cost of banking supervision for the purposes of Article 239 of the draft law. 3.2 Whereas relevant Union law, including the CRD IV, CRR, SSM Regulation and SSM Framework Regulation, does not specify who should own the proceeds of sanctions imposed by national competent authorities, Article 137 of the SSM Framework Regulation provides that the proceeds from administrative penalties imposed by the ECB under Article 18 of the SSM Regulation shall be the ECB’s property. Those sums will not be deducted from the supervisory fees payable by banks to the ECB pursuant to Article 30 of the SSM Regulation.

text: 4. Deposit guarantee fund – role of the State

text: 4.1 Pursuant to Article 401(2) of the draft law, where the assets of the deposit guarantee fund, including the regular contributions made by banks, the liquid assets that the banks are required to hold for the purposes of the deposit guarantee scheme, the banks’ extraordinary contributions, and any borrowings made by the deposit guarantee fund are insufficient to cover the obligations of the deposit guarantee fund, Banka Slovenije is to make a proposal to the State that the State temporarily covers any shortfall in the deposit guarantee fund’s assets in accordance with the second paragraph of Article 313 of the Law on banking. 4.2 It is important to ensure, in the light of the prohibition on monetary financing under Article 123 of the Treaty, that the draft law, together with Article 313 of the Law on banking, clearly places an obligation on the State to cover any potential financial shortfall in the deposit guarantee fund.

text: 5. Resolution fund – financial stability considerations

text: 5.1 The ECB welcomes the establishment of a resolution fund in Slovenia that is financed ex ante. However, it is unclear how the proposed resolution fund will fit into the framework of the BRRD, which must be transposed into national legislation by 31 December 2014. The ECB understands that the Slovenian authorities will fully transpose the BRRD in a separate law and it is important to ensure consistency between any such transposition and the draft law. 5.2 The aggregate capital investment that banks will be required to make into the resolution fund within three months seems relatively large. It is therefore recommended that the national authorities prudently assess how the size of this aggregate capital investment and the timeframe within which it must be made could affect the banks concerned. In particular, given the cash nature of the investment and the fact that a bank’s investment cannot be repaid to it unless it is liquidated, the authorities might wish to assess the effect of the draft law on the banks’ liquidity and capital positions in order to avoid any unintended consequences for financial stability.

text: 6. Deposit guarantee fund and resolution fund – liability of Banka Slovenije

text: Banka Slovenije will manage the deposit guarantee fund and the resolution fund in accordance with the draft law. Although the draft law states that Banka Slovenije will bear no liability for the obligations of these funds, Banka Slovenije’s possible liability with regard to the management of the funds does not seem to be fully clear. Taking into account the structure of these funds, as described above, the authorities may consider whether the draft law would benefit from clarifying the legal consequences of a potential breach of fund management duties by Banka Slovenije.

text: Done at Frankfurt am Main, 11 November 2014.

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: Published in Magyar Közlöny 2014/98.

text: Directive

text: of the European Parliament and of 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.)

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

title: Opinion of the European Central Bank of 11 November 2014 on the resolution of credit institutions and investment firms (CON/2014/80)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 11 November 2014 on the resolution of credit institutions and investment firms (

text: ) Introduction and legal basis

text: On 2 October 2014, the European Central Bank (ECB) received a request from the Magyar Nemzeti Bank (MNB) for an opinion on a draft decree establishing certain specific criteria for the purposes of assessing whether a credit institution or an investment firm qualifies as failing or likely to fail (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 the sixth indent of

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

text: , as the draft decree relates to 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 decree 1.1 The Hungarian Parliament has recently adopted Law XXXVII of 2014 on the resolution of credit institutions and investment firms (hereinafter the ‘Law on resolution’) in order to transpose Directive

text: of the European Parliament and of the Council (hereinafter the ‘BRRD’) into Hungarian law. The ECB considered the Law on resolution, in its draft form, in Opinion

text: . This law provides for early intervention and resolution tools for use by the MNB as the resolution authority designated to manage credit institutions and investment firms that are failing or likely to fail. 1.2 Article 32 of the BRRD sets out conditions for resolution which were transposed into Hungarian law by Article 17 of the Law on resolution. The Law on resolution also empowers the Governor of

text: the MNB to adopt criteria applicable to the procedure for the resolution of credit institutions and investment firms. Accordingly, in order to facilitate an assessment of whether the conditions set out in

text: Article 17(2)

text: (a) to (c) of the Law on resolution are met, the draft decree:  sets out the quantitative criteria for establishing if there has been an infringement of the requirements, for assessing whether a credit institutions or investment firm is failing or likely to fail;  sets out certain percentages applicable to the capital requirements of credit institutions and investment firms as an upper limit at which an institution may or will be deemed to be failing;  sets out detailed rules on the criteria the MNB will take into account when deciding whether a credit institution or an investment firm is likely to fail. 1.3 The draft decree is expected to enter into force on 1 January 2015. According to the explanatory memorandum attached to the draft decree, the MNB intends to review the provisions of the draft decree following the European Banking Authority’s adoption of guidelines on the interpretation of the different circumstances in which an institution will be deemed to be failing or likely to fail, as foreseen in Article 32(6) of the BRRD.

text: 2. Observations

text: 2.1 In accordance with

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

text: , this opinion only addresses issues that go beyond the mere transposition of the BRRD into Hungarian law. 2.2 Supervisory decisions deeming an institution to be failing or likely to fail should be taken on a case-by-case basis, after an assessment of all pertinent circumstances of the individual situation . Any such decision should therefore include discretionary elements, which cannot be determined ex ante. This is reflected in

text: Article 32(4)

text: (a) of the BRRD, which involves the consideration of whether the infringement or likely infringement of requirements for continuing authorisation justifies the withdrawal of the authorisation, and refers to the depletion of all or significant amounts of own funds without setting fixed thresholds. That said, a reference to thresholds relating to own funds requirements, below which an institution may be deemed to be failing, could provide guiding principles for the institutions involved, and may limit the scope for supervisory forbearance. Therefore, also with reference to

text: Article 145(2)

text: (d) and (e) of the Law on resolution, which, in the understanding of the ECB, empowers the Governor of the MNB to adopt a set of quantitative criteria instead of binding thresholds, such thresholds in the draft decree should be merely indicative. 2.3 When laying down the abovementioned criteria, it is important that a thorough impact analysis is carried out as regards the actual level of inadequacy that would cause a specific institution to fail. The explanatory memorandum attached to the draft decree does not contain any information about

text: whether the MNB has carried out such an impact assessment. If such an impact analysis has not been carried out, the ECB would recommend that such an assessment be performed before the adoption of the draft decree, to make sure that the percentage prescribed in

text: Article 4(1)

text: (b) do not need to be recalibrated in order to ensure an effective resolution regime. This opinion will be published on the ECB’s website.

text: Done at Frankfurt am Main, 11 November 2014. [signed]

text: The President of the ECB

text: Mario DRAGHI


text: Predlog Zakona o nematerializiranih vrednostnih papirjih (ZNVP-1).

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: Zakon o nematerializiranih vrednostnih papirjih (ZNVP) (Official Journal of the Republic of Slovenia, No. 2/07 – official consolidated text, 67/07 - ZTFI, 58/09 and 78/11). 5 The T2S corporate actions standards were approved by the T2S Advisory Group. The standards are available on the ECB’s website at www.ecb.europa.eu. 6 The CAJWG was set up in summer 2008 as one of the work streams of the ‘CESAME 2’ Group. The CESAME 2 Group followed up on the work of the ‘CESAME Group’ (the European Commission’s Clearing and Settlement Advisory and Monitoring Expert Group) and aimed to achieve the goal of a barrier-free single European market for clearing and settlement of securities transactions. The CAJWG is composed of representatives of the main stakeholders, i.e. issuers, market infrastructures, and intermediaries.

text: As regards the CAJWG standards for corporate actions on stock, see ‘Market Standards for Corporate Actions Processing’ (Revised version 2012). The report is available on the ECB’s website at www.ecb.europa.eu. 8

text: Regulation (EU) No 909/2014

text: of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives

text: and

text: and

text: Regulation (EU) No 236/2012

text: (OJ L 257, 28.8.2014, p. 1). 10 The Slovenian CSD is ‘KDD - Centralna klirinško depotna družba’.

text: See, further, the ʻT2S Corporate Actions Standards - 2014 Gap Analysis Reportʼ, which identified that Slovenian law does not recognise the role of the CSD in processing the settlement of corporate actions in accordance with the CAJWG standards and the T2S corporate actions standards. The report is available on the ECB’s website at www.ecb.europa.eu. 13 Article 26(4) of the KDD Operations Rules. 14 See the explanatory memorandum to the draft law.

text: Directive

text: of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems (OJ L 166, 11.6.1998, p. 45). 16 See

text: Article 11

text: in conjunction with Article 13(2) of the draft law.

title: Opinion of the European Central Bank of 13 November 2014 on book-entry securities (CON/2014/81)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 13 November 2014 on book-entry securities (

text: ) Introduction and legal basis

text: On 29 September 2014, the European Central Bank (ECB) received a request from the Slovenian Ministry of Finance for an opinion on a draft law on book-entry securities (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 fifth indent of

text: , as the draft law relates to 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 draft law is a recast of the current Law on book-entry securities and makes certain amendments thereto. It regulates book-entry securities, encumbrances on book-entry securities, transfer of book-entry securities, fulfilment of the obligations arising in respect of book-entry securities, the central register of book-entry securities and access to the data maintained therein . 1.2 The draft law has several objectives including the facilitation of a legal framework that will enable the use of TARGET2-Securities (T2S) in Slovenia. The explanatory memorandum outlines that the amendments introduced by the draft law are proposed in the light of the TARGET2-Securities corporate action standards on flows, i.e. pending settlement transactions (hereinafter referred to as 5 6 the ‘T2S corporate actions standards’) and the Corporate Actions Joint Working Group standards for corporate actions on stock, i.e. corporate actions on settled balances (hereinafter referred to as

text: the ‘CAJWG standards’) . The explanatory memorandum outlines that the Law on book-entry securities currently: (a) governs the execution of a smaller number of corporate actions than are governed by the above standards; (b) does not govern the manner in which obligations arising from a corporate action are fulfilled, as envisaged by the standards; and (c) allows the execution of corporate actions which the standards require to be processed through a central securities depository (CSD), in a manner not laid down by the standards. The draft law aims to address these issues in Articles

text: and

text: , as further described below. 1.3 A further objective of the draft law is to adapt the Slovenian legal framework to the provisions of

text: Regulation (EU) No 909/2014

text: of the European Parliament and of the Council (hereinafter the ‘CSDR’). The draft law states that its provisions shall apply to the central register managed by a CSD that has a registered office in Slovenia and to a branch of a CSD of a Member State that is registered in the Slovenian business register. Furthermore, the draft law permits book-entry securities to be entered in the central register where the issuer’s obligations are governed by foreign law.

text: 2. General observations

text: The ECB welcomes the draft law as it contributes to facilitating the Slovenian market’s adaptation to T2S and the wider harmonisation of standards in post-trade services.

text: 3. Specific observations

text: 3.1 Corporate actions Pursuant to the draft law, a corporate action on a book-entry security is defined as the fulfilment of the obligations arising from that security . Article 39(1) of the draft law requires corporate actions to be processed through the CSD and through the CSD members that manage book-entry securities holders’ accounts (hereinafter the ‘CSD members’).

text: Article 39(2)

text: defines particular requirements regarding the fulfilment of the obligations arising from book-entry securities and requires the CSD to further specify and implement the requirements in its rules. Such requirements cover, inter alia, the information flow between the issuer and the CSD, and between the CSD and the CSD members, the key dates relating to a corporate action event, e.g. record date, ex-date, payment date, and other deadlines associated with managing corporate action events. As stated in the explanatory memorandum to the draft law, in defining the requirements in

text: Article 39(2)

text: , the draft law takes into account the main principles of the T2S corporate actions standards and the

text: CAJWG standards . Moreover,

text: Article 39(2)

text: provides that further specification and implementation by the CSD in its rules of the requirements in

text: Article 39(2)

text: , shall be ‘in accordance with internationally accepted standards for processing corporate actions on book-entry securities’. The ECB welcomes the above provisions of the draft law, which will facilitate the implementation of the T2S corporate actions standards and the CAJWG standards in Slovenia, as the explanatory memorandum to the draft law proposes . 3.2 Termination of registry accounts in the central register A registry account is defined in the CSD’s rules of operation as a provisional account that is not managed by any member . Historically, the registry accounts held in the central register of bookentry securities were established for the purpose of privatisation. They allowed the distribution of book-entry securities to the shareholders of privatised companies without requiring them to enter into a legal relationship with a member of the CSD. The CSD only maintains the book-entry securities on the registry accounts and does not perform associated services . According to the explanatory memorandum to the draft law, this renders registry accounts incompatible with the CAJWG standards and the T2S corporate action standards. To address this issue, the holders of the book-entry securities on registry accounts will have to enter into an appropriate contractual relationship with a member of the CSD. The securities held on registry accounts that are not transferred to other accounts by the deadline laid down in Article 19(2) of the draft law will be transferred in accordance with the CSD’s rules to an account held by a competent court and will be subject to the law governing court deposits. The draft law requires the CSD to lay down in its rules a detailed method for terminating registry accounts. It follows from the above that the accounts of securities holders who enter into contractual relationships with CSD members to manage their accounts before the deadline are intended to be compatible with the CAJWG standards and the T2S corporate action standards. However, it is not entirely clear how the arrangement regarding the holding of any remaining securities on courts’ accounts will interact with T2S. In particular, it is unclear whether these remaining securities on the courts’ accounts will be tradeable and therefore freely negotiable. An arrangement whereby the courts are holders of book-entry securities accounts in the central register and where such accounts are managed by CSD members as investment service providers suggests, in the light of T2S requirements, that the securities on the courts’ accounts may be considered tradeable. The ECB invites the Slovenian authorities to clarify this arrangement.

text: 3.3 Settlement finality 3.3.1 Article 17 of the draft law provides that the CSD shall define in its rules the moments of entry and of irrevocability of a transfer order. Article 39 of the CSDR requires that the rules of each securities settlement system that the CSD operates must define those moments in line with Articles

text: and

text: of Directive 98/26/EC of the European parliament and of the Council , as amended (hereinafter the ‘SFD Directive’). Furthermore, Article 48(8) of the CSDR requires that interoperable securities settlement systems and CSDs, which use a common settlement infrastructure shall establish identical moments of: (a) entry of transfer orders into the settlement system and (b) irrevocability of transfer orders. 3.3.2 Furthermore, the ECB notes that the T2S Advisory Group has undertaken work towards agreement on a common definition of the moment of entry of a transfer order into the settlement system and of the moment at which the transfer order is protected against insolvency in accordance with the SFD Directive (Settlement Finality I), as well as the moment of irrevocability of transfer orders (Settlement Finality II). As part of the intended legal harmonisation of CSD rules within T2S, the CSD rules should also ensure that it is not possible to unilaterally cancel the order after matching has taken place within T2S (Settlement Finality II). Common definitions will need to be applied before migration to T2S in order to ensure compliance with the CSDR and T2S harmonised standards. 3.4 Foreign law The ECB understands that, whilst Slovenian law applies to book-entry securities, to the rights of holders arising from such securities and to the encumbrances on such securities, the draft law permits book-entry securities to be entered in the central register where the issuer’s obligations are governed by a foreign law . In situations where the issuer’s obligations are governed by a foreign

text: law, the Slovenian law applicable to book-entry securities would apply in other respects, e.g. as regards the rights of holders arising from the securities . This opinion will be published on the ECB’s website.

text: Done at Frankfurt am Main, 13 November 2014. [signed]

text: The President of the ECB

text: Mario DRAGHI


text: Official Gazette of the Spanish Parliament (BOCG), Serie A No 118-1, of 2 October 2014.

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: Guideline ECB/2014/44 of 13 November 2014 on the establishment of the Eurosystem Production and Procurement System (not yet published in the Official Journal).

text: Case C-107/98

text: Teckal [1999] ECR I-08121, para. 50;

text: Case C-26/03

text: Stadt Halle [2005] ECR I-00001, paras. 48 et seq.;

text: Case C-324/07

text: Coditel Brabant [2008] ECR I-08457, para. 26;

text: Case C-573/07

text: Sea [2009] ECR I-08127, paras. 37 and 40.

text: Directive

text: of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive

text: (OJ L 94, 28.3.2014, p. 65).

text: In relation to the production of euro banknotes this criterion is reinforced by Article 6(2) of the EPPS Guideline for the in-house group NCBs: see paragraph 3.2.

text: ‘In-house group NCBs’ within the meaning of the EPPS Guideline are a group of NCBs that procure their euro banknotes using an in-house printing works. ‘NCBs’ within the meaning of the EPPS Guideline are the national central banks of the Member States whose currency is the euro.

text: Direct private capital participation in the controlled legal person (the new legal entity) would not meet the third criterion. (with the exception of non-controlling and non-blocking forms of private capital participation required by national legislative provisions, in conformity with the Treaties, which do not exert a decisive influence on the controlled legal person). See point (c) of subparagraph (1) of

text: Article 12(1) of Directive 2014/24/EU

text: . th

text: Draft law, 70 Final provision, second paragraph.

text: Article 12(2) of Directive 2014/24/EU

text: is not applicable to the case at hand as the Spanish Printing Works are controlled by the Ministry of Finance and Public Administration (and not by the Banco de España).

text: Case C-159/11

text: , Azienda Sanitaria Locale di Lecce and Università del Salento v Ordine degli Ingegneri della Provincia di Lecce and Others, para. 34;

text: Case C-386/11

text: , Piepenbrock, paras. 36 and 39.

title: Opinion of the European Central Bank of 19 November 2014 on euro banknote production by a special-purpose entity (CON/2014/82)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 19 November 2014 on euro banknote production by a special-purpose entity (

text: ) Introduction and legal basis

text: On 7 October 2014, the European Central Bank (ECB) received a request from the Banco de España for an opinion on two provisions of the draft law on the general State budget (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 the restructuring of the production of euro banknotes by the Banco de España. 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 amends Law 13/1994 of 1 June 1994 on the autonomy of the Banco de España and entitles the Banco de España to entrust its production of euro banknotes to a publicly-owned separate legal entity (hereinafter, the ‘new legal entity’) in which it has a majority holding. The exclusive purpose of the new legal entity is the production of euro banknotes allocated by the ECB to the Banco de España. 1.2 In this respect, the purpose of the draft law is to restructure the Spanish production of euro banknotes in compliance with Union procurement law and Guideline ECB/2014/44 (hereinafter the ‘EPPS Guideline’) by creating as a separate legal entity an in-house printing works within the meaning of Article 1(2) of the EPPS Guideline. The Banco de España would then be entitled to entrust its production of euro banknotes directly to the new legal entity without carrying out a competitive tender procedure. 1.3 The draft law also regulates the relationship between the Fábrica Nacional de Moneda y Timbre – Real Casa de la Moneda (FNMT-RCM, Spanish Royal Mint) and the new legal entity. Until 31 December 2017, FNMT-RCM may hold an ownership interest of up to 20 % in the new legal entity, which must have the human and material resources needed to perform its functions. During

text: that period, FNMT-RCM and the new legal entity may share the common services required for them to carry out their tasks. 1.4 The draft law also stipulates that FNMT-RCM may produce banknotes other than euro banknotes and, subject to the applicable hiring and procurement regulations, provide the new legal entity with such services ancillary to the production of the euro banknotes as it may need.

text: 2. General observations

text: The ECB notes that the draft law aims at the reorganisation of Spanish production of euro banknotes in line with Union procurement law and the EPPS Guideline.

text: 3. Public contracts concluded between the Banco de España and the new legal entity

text: 3.1 In the event that the Banco de España entrusts the production of euro banknotes to the new legal entity, Union procurement rules will apply. In particular, the envisaged structure for such an operation must comply with the criteria developed in the case-law of the European courts . These criteria are contained in

text: Article 12(1) of Directive 2014/24/EU

text: of the European Parliament and of the Council , which is to be implemented by the Member States by April 2016. The criteria may be summarised as follows: a) the contracting authority exercises over the legal person concerned a control similar to that which it exercises over its own departments, which, pursuant to the second subparagraph of

text: Article 12(1) of Directive 2014/24/EU

text: , shall be deemed to be the case if the contracting authority exercises a decisive influence over both strategic objectives and significant decisions of the controlled legal person; b) more than 80 % of the activities of the controlled legal person are carried out in the performance of tasks entrusted to it by the contracting authority ; and c) there is no direct private capital participation in the controlled legal person. 3.2 Article 6(2) of the EPPS Guideline provides that so-called ‘in-house group NCBs’ shall ensure that their in-house printing works neither participate in any tender procedures for the production of euro banknotes organised and carried out within the Union, nor accept orders for the production of euro banknotes from third parties outside the in-house group NCBs. Therefore the new legal entity

text: will not be allowed, for instance, to produce euro banknotes for other central banks outside the inhouse group NCBs. 3.3 The definition of in-house printing works in Article 1(2) of the EPPS Guideline only covers printing works that are controlled by one NCB or jointly by several NCBs. It does not cover printing works that are controlled jointly by an NCB and another public authority. In relation to the planned interim model to be used until 31 December 2017, FNMT-RCM may hold an ownership interest of up to 20 % in the new legal entity. However, in order to comply with the abovementioned criteria for in-house printing works, the new legal entity must be controlled by the Banco de España alone, with no direct private capital participation in the new legal entity. The draft law ensures a controlling stake of the Banco de España in the new legal entity, but this does not in itself suffice to meet the criteria listed above . It must also be ensured that the Banco de España exercises a decisive influence over the new legal entity’s strategic objectives and significant decisions. The details of the governance arrangements for the new legal entity should be laid down in by-laws and should ensure that minority shareholder rights cannot negatively impact on such control by the Banco de España. However, it is for the Spanish legislator to determine whether the new legal entity can be controlled by the Banco de España alone under an arrangement in which FNMT-RCM will hold an ownership interest of up to 20 % in the new legal entity.

text: 4. Public contracts concluded between the new legal entity and FNMT-RCM

text: 4.1 The draft law stipulates that FNMT-RCM may provide to the new legal entity, ‘pursuant to current hiring and procurement regulations, the services ancillary to the production of the euro banknotes’ which the new legal entity may require. The new legal entity would qualify as a contracting authority within the meaning of points (1) and (4) of

text: Article 2(1) of Directive 2014/24/EU

text: and would as such only be entitled to award public supply or service contracts to FNMT-RCM if it complies with the applicable procurement rules. Therefore, subject to the applicable procurement rules, the new legal entity may only request services or supplies (e.g. raw materials such as paper) from FNMT-RCM on the basis of a competitive tender procedure . 4.2

text: Article 12(4) of Directive 2014/24/EU

text: , under which horizontal (public-public) cooperation for the fulfilment of public tasks falls outside the scope of the Directive, is not applicable as public service or supply contracts concluded between the new legal entity and FNMT-RCM can not be considered as contracts for the performance of a common public task that these two cooperation partners have to perform . The public task of the new legal entity will be exclusively the production of euro

text: banknotes, while FNMT-RCM will have other public tasks such as the production of banknotes other than euro banknotes. 4.3 Article 7(1) of the EPPS Guideline is relevant in this regard. It provides for cooperation, e.g. a cooperation group for joint purchases of raw materials, among in-house group NCBs. Pursuant to this provision, competitive procurement procedures for services ancillary to the production of euro banknotes are intended for joint purchasing in order to improve cost-efficiency.

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

text: Done at Frankfurt am Main, 19 November 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI