title: Opinion of the European Central Bank of 20 June 2006 at the request of the Polish Minister of Finance on a draft law amending the Law on banking (CON/2006/31)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 20 June 2006 at the request of the Polish Minister of Finance on a draft law amending the Law on banking (

text: ) Introduction and legal basis

text: On 15 May 2006, the European Central Bank (ECB) received a request from the Polish Minister of Finance for an opinion on a draft law (hereinafter the ‘draft law’) amending the Law on banking of 29 August 1997 (hereinafter the ‘Banking Law’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and the sixth indent 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 , as the draft law relates to the 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 is intended to facilitate restructuring in the banking sector by abolishing the prohibition on the division of banks operating as joint stock companies, which was introduced into Polish law in May 2004 . To that end, the draft law proposes to allow the division of a bank operating as a joint stock company, under the relevant provisions of the Commercial Companies Code of 15 September 2000 (hereinafter the ‘Companies Code’). 1.2 As a result of the proposed reform, the shareholders of an existing bank operating as a joint stock company would be allowed, on basis of the publicly registered terms of a division and upon

text: 1 Law on banking of 29 August 1997 (consolidated text: Dz. U. of 2002, No 72, Item 665, as amended).

text: 2 OJ L 189, 3.7.1998, p. 42.

text: 3 Second paragraph of the explanatory memorandum to the draft law.

text: 4 The change was effected by Article 1(72) of the Law of 1 April 2004, amending the Banking Law as of 1 May 2004 (Dz. U. 2004, No. 91, Item 870), which introduced the current

text: Article 124

text: c of the Banking Law.

text: 5 Dz. U. of 2000, No 94, Item 1037, as amended.

text: 6 Articles 534-535 of the Companies Code. obtaining the consent of the Banking Supervision Commission , to do either of the following: (i) to transfer all the assets of the existing bank to other banks, in exchange for shares in the acquiring banks issued to the shareholders of the divided bank (division by acquisition) , or (ii) to transfer part of the assets of the existing bank to another bank, in exchange for shares in the acquiring bank issued to the shareholders of the divided bank (division by separation) . The draft law expressly excludes the division of co-operative banks . Banks acquiring the assets of a divided bank may either be Polish banks or other credit institutions authorised in the European Economic Area (EEA) . The shares of joint stock companies which operate banks and which continue to exist after the division process would be tradable under the general rules. 1.3 The provisions of the draft law would apply in parallel with the existing rules allowing for intragroup and cross-group transfers of assets by means of the direct sale of all or part of banking enterprises between banks, upon obtaining the consent of the Banking Supervision Commission .

text: 2. The ECB’s comments

text: 2.1 From the explanatory memorandum to the draft law, it appears that it has become necessary to repeal the prohibition on the division of banks operating as joint-stock companies, as this was hindering the necessary restructuring of the banking sector. Accordingly, the draft law seeks to ensure that associations, mergers and divisions of banks do not negatively affect the banks concerned by providing that the Banking Supervision Commission shall refuse to allow the division of a bank if this would be detrimental to the prudent and sound management of the bank. Thus, the draft law aims to reconcile both the need for flexibility in the restructuring of banking activities and the need to ensure depositor protection and financial stability. 2.2 Although there is no specific Community legislation on the supervisory aspects of such operations, the Banking Directive provides for specific requirements and supervisory approval with regard to banking activities, which must be continuously applied. As regards restructuring operations affecting credit institutions, many Member States have provided for a role for a supervisory authority which, apart from any considerations about the commercial aspects of such operations, is

text: 11 Article 1(3) of the draft law, introducing the new

text: Article 124

text: c(1) of the Banking Law in connection to

text: Article 4(1)

text: (17) and Article 4(3) of the Banking Law.

text: Article 124

text: a of the Banking Law, as introduced by the amending Law of 1 April 2004 (Dz. U. 2004, No. 91, Item 870), in force as of 1 May 2004.

text: 13 Directive

text: of the European Parliament and of the Council of 20 March 2000 relating to the taking up and pursuit of the business of credit institutions, (OJ L 126, 26.5.2000, p. 1), as amended by

text: Commission Directive 2006/29/EC

text: (OJ L 70, 9.3.2006, p. 50). required to ensure that restructuring does not raise any concerns about financial stability or supervisory concerns. 2.3 The ECB welcomes the provision in the draft law that the banks acquiring the assets of a divided bank may either be Polish banks or EEA credit institutions, since it is expected that this clarification will ensure a level playing field. More detailed rules (possibly in secondary legislation) on the procedure for obtaining the authorisation referred to in Article 1(3) of the draft law, and the information to be provided to the supervisory authority, would further enhance the transparency of the supervisory process. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 20 June 2006. [signed] The President of the ECB Jean-Claude TRICHET


publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 22 June 2006 at the request of the French Senate on a draft law on the Banque de France (CON/2006/32)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 22 June 2006 at the request of the French Senate on a draft law on the Banque de France (

text: ) Introduction and legal basis

type: rubrik

text: On 30 May 2006, the European Central Bank (ECB) received a request from the French Senate for an opinion on a draft law (proposition de loi) on the Banque de France (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and the third and fourth indents of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law amends the Banque de France’s Statute and relates to the collection, compilation and distribution of monetary, financial, banking, payment systems and balance of payment statistics. 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. Purpose of the draft law

text: 1.1. The draft law replaces the Banque de France’s Monetary Policy Council (MPC) with a new body, the Monetary Committee of the General Council (hereinafter the ‘Monetary Committee’), which would form part of the Banque de France’s General Council, whose task it is to administer the Banque de France . The Monetary Committee would be composed of seven members as is currently the case for the MPC: the Banque de France’s Governor and the two Deputy Governors, as well as four other members . While the Monetary Committee would continue to examine monetary trends and analyse the implications of the monetary policy formulated within the ESCB framework , its tasks would be expressly extended in the Banque de France’s Statute to the adoption of the measures transposing the ECB’s guidelines . The draft law defines the conditions of appointment of the four members of the Monetary Committee, other than the Governor and the

text: 1 OJ L 189, 3.7.1998, p. 42.

text: 2 Current Article L.142-6 of the Monetary and Financial Code (MFC).

text: 3 Article L. 142-3 and Article L. 142-5 of the MFC, as proposed by the draft law.

text: 4 First paragraph of Article L. 142-4 of the MFC, as proposed by the draft law.

text: 5 Second paragraph of Article L. 142-4 of the MFC, as proposed by the draft law. Deputy Governors, as well as the incompatibility regime with regard to the possibility of carrying on other professional activities and the rules relating to conflicts of interest applicable to them. 1.2. The draft law also introduces into the Banque de France’s Statute a confirmation of the central bank’s role and powers when collecting the statistical data needed to establish the balance of payments . A specific provision deals with the possibility for the Banque de France to receive information from undertakings and professional associations relating to their financial situation and to communicate this information to central banks, to other institutions performing similar tasks and to credit institutions and financial institutions . Finally, the draft law provides that the dividend paid by the Banque de France to the State will be increased by the amount of the savings on remuneration credits which result from this law .

text: 2. Reform of the Banque de France’s decision-making bodies

text: Creation of the General Council’s Monetary Committee

text: 2.1 The purpose of the reform of the Banque de France’s decision-making bodies is to take into account the transfer of monetary policy responsibilities to the ECB and to simplify the Banque de France’s management and supervisory bodies by grouping them together . The draft law provides for the MPC’s disbanding. The ECB notes in this respect that, since the transfer of the monetary policy powers to the ESCB, the ECB’s Governing Council is the single collegial decision-making body defining the euro area’s monetary policy and, in particular, the body that adopts the guidelines and takes the decisions necessary to ensure the performance of the Eurosystem’s tasks. In this context, the ECB welcomes the clarification brought by the abrogation of the MPC. 2.2 At the same time, the MPC will be replaced by the Monetary Committee, a body which will form part of the General Council. The draft law simplifies the conditions currently applicable to the appointment of the members of the MPC, other than the Governor and the Deputy Governors , in order to take into account the evolving functions of the MPC . According to the preamble to the draft law, this should result in a significant downward adjustment of the remuneration of the four members of the Monetary Committee other than the Governor and the Deputy Governors . One of the main changes introduced by this reform will be that the Monetary Committee members will be able to carry out other professional activities if certain conditions are fulfilled .

text: 6 Article L. 141-6 of the MFC, as proposed by the draft law.

text: 7 Article L. 144-1 of the MFC, as proposed by the draft law.

text: 8 Article 7 of the draft law.

text: 9 Second sentence of the preamble to the draft law.

text: 10 Preamble to the draft law,

text: Article 1

text: 11 Cf. the current Article L. 142-3 of the MFC and Article L. 142-5 of the MFC, as proposed by the draft law.

text: 12 Preamble to the draft law, seventh paragraph.

text: 13 Preamble to the draft law, seventh paragraph.

text: 14 Fourth paragraph of Article L.142-7 of the MFC, as proposed in Article 1 of the draft law. Personal independence 2.3. As a matter of principle, membership of a decision-making body involved in the performance of ESCB-related tasks is incompatible with the exercise of other functions that might create a conflict of interest . Concerning the Monetary Committee members (other than the Governor and Deputy Governors), the ECB notes in this respect that the draft law provides for a specific incompatibility regime and a set of rules on avoiding conflicts of interest. 2.4. As regards the incompatibility regime provided for in the draft law , the above four members of the Monetary Committee may not perform any duties or hold any interests in regulated entities and may not hold any parliamentary office . The ECB would recommend extending this incompatibility regime to the holding of an “office in the executive or legislative branches of the State or of regional or local administrations” . The ECB also notes that a specific check procedure to prevent conflicts of interest has been set up in the draft law and that the prior agreement of a majority of Monetary Committee members (except the interested member) is required for the exercise of any other professional activity . 2.5. The draft law provides that ‘those members of the Monetary Policy Council appointed by decree of the Council of Ministers who hold office on the date this law is published shall as of right be members of the Monetary Committee. Their term of office shall not be extended after its expiry’ . The ECB suggests clarifying this provision to ensure that only the four members of the Monetary Committee other than the Governor and the Deputy Governors are referred to by this provision. Indeed, the Governor and the Deputy Governors are also members of the MPC and appointed by a Council of Ministers decree. Their mandate as members of the MPC is renewable and therefore their mandate as members of the Monetary Committee has to be renewable. The ECB also recommends deleting the reference to the MPC in the provision of the Statute of the Banque de France relating to litigation . 2.6. Under the draft law, it is also provided that ‘If any member [of the Monetary Committee other than the Governor or the Deputy Governors] is unable to complete their term of office, they shall be replaced immediately (…). In any such case, the person appointed shall hold office only for the remainder of the term of the member replaced’ . Furthermore, in such cases, contrary to the generally applicable rule, the terms of office of the members of the Monetary Committee may be

text: 15 ECB Convergence Report, May 2006, 3.1.3, Safeguards against conflict of interest, p. 65.

text: 16 Article L. 142-7 of the MFC, as proposed by the draft law.

text: 17 As listed in Book V of the MFC.

text: 18 Article L.142-7 of the MFC, as proposed by the draft law.

text: 19 ECB Convergence Report, May 2006, 3.1.3, Safeguards against conflict of interest, p. 65.

text: 20 Fourth paragraph of Article L.142-7 of the MFC, as proposed by the draft law.

text: 21 Article L. 142-5 of the MFC, as proposed in Article 2 of the draft law.

text: 22 Current last paragraph of Article L. 142-8 of the MFC.

text: 23 Current Article L.144-3 of the MFC.

text: 24 Article L.142-5 of the MFC, sixth paragraph (as proposed in Article 1 of the draft law). renewed . However, the principle of personal independence, as laid down in Article 14.2 of the Statute of the European System of Central Banks and of the European Central Bank , requires that the same rules for the security of tenure of the office of Governor should apply to other members of the decision-making bodies of NCBs involved in the performance of ESCB-related tasks. As a consequence, the draft law should be amended in order to bring the terms of office of a member of the Monetary Committee replacing another member who is unable to complete their term of office into line with Article 14.2 of the ESCB Statute.

text: 3. Other comments

text: 3.1. The ECB welcomes the clarifications made on the role of the Banque de France regarding balance of payments and international investment position statistics . A decree to be adopted will set out the sanctions applicable in the case of breaches of reporting obligations . The ECB understands that this decree will be without prejudice to the ECB’s competence to impose sanctions on reporting agents for specific breaches of their statistical reporting obligations . 3.2. The ECB notes the following concerns regarding Article 7 of the draft law . First, since it enables the French authorities to interfere with the allocation of profits to be proposed by the Banque de France’s General Council, such provision might be considered as affecting the Banque de France’s institutional independence. Second, this provision of the draft law seems to imply that the amount of the savings on remuneration credits which result from this law would be automatically due to the French State even in the absence of a dividend paid by the Banque de France. The ECB recalls that ‘the decision on allocation of profits should be taken by the NCB’s decision-making body on professional grounds, and should not be subject to the discretion of third parties’ . As a consequence, the ECB would recommend deleting such provision, since it is incompatible with Article 108 of the Treaty as well as with the Monetary and Financial Code .

text: 25 Article L.142-5 of the MFC, seventh paragraph (as proposed in Article 1 of the draft law).

text: 26 As further explained in the ECB Convergence Reports of 2004 and 2006 (October 2004, 2.3.1, ‘Central bank independence’, p. 27 and May 2006, 3.1.3, ‘Personal independence’, p. 64).

text: 27 Article L. 141-6 of the MFC, as proposed by the draft law.

text: 28 Article L.141-6 I and II of the MFC, as proposed in Article 2 of the draft law.

text: 29 See

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) and

text: Council Regulation (EC) No 2532/98 of 23 November 1998

text: concerning the powers of the European Central Bank to impose sanctions, (OJ L 318, 27.11.1998, p. 4).

text: 30 Article 7 of the draft law provides that the dividend paid by the Banque de France to the State will be increased by the amount of the savings on remuneration credits which result from this law.

text: 31 ECB Convergence Report, May 2006, 3.1.4, ‘Distribution of profits, NCBs’ capital and financial provisions’, p. 66.

text: 32 Fourth paragraph of the Article L.142-2, of the MFC as proposed by the draft law and current Article R.144-4 of the MFC (regulatory part).

text: 4. Final observations

text: 4.1. Should the provisions of the draft law be subject, in the course of the parliamentary procedure, to substantial amendments falling within the ECB’s field of competence, the ECB wishes to draw the consulting authority’s attention to the need to re-consult the ECB on these amendments. 4.2. The ECB will also need to be consulted on the draft amendments to the regulatory part of the Monetary and Financial Code pursuant to the changes introduced to the Statute of the Banque de France, as well as on the draft version of the decree referred to in Article 2 of the draft law .

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

text: Done at Frankfurt am Main, 22 June 2006.

text: [signed]

text: The President of the ECB

text: Jean-Claude TRICHET

text: 33 New proposed Article L.141-6, III of the MFC, as proposed by the draft law.

type: vagledning

utgivare: ecb


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

text: This inconsistency was identified on p. 222 of the 2004 ECB Convergence Report.

text: ECB Opinion

text: of 27 January 2006 at the request of the Central Bank of Cyprus on a draft law amending the Central Bank of Cyprus Laws of 2002 and 2003.

text: The personal independence of the Auditor General is guaranteed under Article 115.3 of the Cypriot Constitution, according to which he or she is not to retire or to be removed from office except on the same grounds and in the same manner as a judge of the Supreme Court.

text: Under Article 116(1) of the Cypriot Constitution, ‘[T]he Auditor General assisted by the Deputy Auditor-General shall, on behalf of the Republic, control all disbursements and receipts and audit and inspect all accounts of moneys and other assets administered, and of liabilities incurred, by or under the authority of the Republic and for this purpose he shall have the right of access to all books, records and returns relating to such accounts and to places where such assets are kept’.

text: Paragraphs 2.1. and 2.2 of Opinion

text: As expressed in paragraphs 5 to 7 of ECB Opinion

text: of 2 September 2002 at the request of the Swedish Ministry of Finance on a draft legislative proposal establishing the National Audit, including proposed amendments to the Sveriges Riksbank Act (1988:1385).

text: Paragraph 2.3. of Opinion

text: See ECB Convergence Report, May 2006, page 66, available at http://www.ecb.int/pub/pdf/conrep/cr2006en.pdf.

text: Specific examples can be found at page 74 of the ECB Convergence Report of May 2006 (Appointment of Independent External Auditors),.ibid.

title: Opinion of the European Central Bank of 28 June 2006 at the request of the Cypriot Ministry of Finance on a draft provision amending the draft law amending the Central Bank of Cyprus Laws of 2002 and 2003 (CON/2006/33)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 28 June 2006 at the request of the Cypriot Ministry of Finance on a draft provision amending the draft law amending the Central Bank of Cyprus Laws of 2002 and 2003 (

text: ) Introduction and legal basis

text: On 24 May 2005 the European Central Bank (ECB) received a request from the Cypriot Ministry of Finance for an opinion on a draft provision (hereinafter the ‘draft provision’) amending the draft law amending the Central Bank of Cyprus Laws of 2002 and 2003 (hereinafter the ‘CBC Law’) in respect of the appointment of independent external auditors for the Central Bank of Cyprus (CBC). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and the third indent 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 , as the draft law relates to a national central bank. 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. Subject matter and background

text: 1.1 The subject matter of this opinion is a draft provision, the purpose of which is to resolve the incompatibility between Section 60 of the CBC Law, which deals with the audit of the annual financial statements of the CBC, and Article 27.1 of the Statute of the European System of Central Banks and of the European Central Bank . In an earlier opinion on a draft law amending the CBC Law , the ECB commented on a previous draft provision to amend Section 60 of the CBC Law, and emphasised the conditions for the correct application of Article 27.1 of the Statute.

text: 1.2 In Opinion

text: , the ECB concluded that, notwithstanding the Auditor General’s 4 5 independence as enshrined in the Cypriot Constitution , the Audit Office of which the Auditor General is the Head is not an external auditor within the meaning of Article 27.1 of the Statute and cannot, for that reason, be appointed as the CBC’s independent external auditor . 1.3 Reaffirming its view on this matter , in Opinion

text: the ECB also concluded that the appointment of an independent external auditor, in accordance with Article 27.1 of the Statute, to audit the CBC’s annual financial statements once Cyprus has adopted the single currency, ‘will not prevent the Audit Office from continuing to perform a control function, provided that its auditing activities: (i) do not interfere with the review of European System of Central Banks (ESCB) related tasks of the CBC to be undertaken by the CBC’s independent external auditors to be approved by the Council of the European Union in accordance with Article 27 of the Statute; and (ii) do not jeopardise the CBC’s independence’ .

text: 2. Assessment of the draft provision

text: 2.1 In line with the previous draft law amending the CBC Law, subsection 1 of the draft provision provides that the financial statements of the CBC shall be audited in accordance with Article 27 of the Statute. The ECB welcomes this. 2.2 However, there are still some elements that would need to be brought into line with the Statute as recommended in the previous ECB opinion. While subsection 1 of the draft provision provides that the financial statements of the CBC shall be audited in accordance with Article 27.1 of the Statute, subsection 2 gives the Cypriot Auditor General the power to conduct a full audit of the operational efficiency of the CBC as well as of its financial statements, in parallel with the audit conducted by the independent external auditor appointed in accordance with Article 27.1 of the Statute and without providing for the necessary safeguards, referred to in the ECB’s earlier opinion, against the Auditor General’s interference in the activities of the CBC’s independent external auditor. Similarly, subsection 3 of the draft provision fails to provide any limits to the Auditor General’s access to the CBC’s books and records. Finally, while subsection 4 of the draft provision provides that the Auditor General shall not question the merits of the policy objectives of the CBC, it

text: provides no safeguards against interference by the Auditor General in the activities of the CBC’s independent external auditor. 2.3 In order to bring the draft provision into line with the requirements of the Statute, as expressed in Opinion

text: , the scope of the control exercised by the Auditor General over the financial statements of the CBC should be clearly defined by the national legal framework and should be without prejudice to the activities of the CBC's independent external auditor as laid down in Article 27.1 of the Statute , and in line with the ECB’s observations in paragraph 2.2. of this opinion. The ECB draws the consulting authority’s attention to its May 2006 Convergence Report, where the ECB concluded that the powers of auditors, other than those appointed under Article 27.1 of the Statute, are compatible with central bank independence when the necessary 10 11 safeguards are in place . Since neither the draft provision nor Cypriot law presently provide the requisite safeguards, the ECB notes that safeguards in line with the conclusions of its earlier opinion should be introduced. In particular, such safeguards should include guarantees that the Auditor General cannot interfere with the independent external auditor’s control of the ESCBrelated accounts of the CBC and that the Auditor General may not jeopardise the independence of the CBC.

text: Done at Frankfurt am Main, 28 June 2006.

text: [signed]

text: The President of the ECB

text: Jean-Claude TRICHET


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

text: OJ L 166, 11.6.1998, p. 45.

text: Available at www.iosco.org.

text: See IMF Country Report No 06/75, Belgium, Financial System Stability Assessment, including Reports on the Observance of Standards and Codes on the following topics: Banking Supervision, Securities Regulation, Insurance Supervision and Regulation, and Securities Settlement Systems, p. 52, No 112 and p. 55, Table 11, Recommendation 1.

title: Opinion of the European Central Bank of 5 July 2006 at the request of the Belgian Ministry of Finance on a draft royal decree extending the list of the participants in securities settlement systems (CON/2006/34)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 5 July 2006 at the request of the Belgian Ministry of Finance on a draft royal decree extending the list of the participants in securities settlement systems (

text: ) Introduction and legal basis

text: On 7 April 2006, the European Central Bank (ECB) received a request from the Belgian Ministry of Finance for an opinion on a draft royal decree extending the list of the participants in securities settlement systems as referred to in Article 2§2 of the law of 28 April 1999 implementing Directive

text: of 19 May 1998 on settlement finality in payment and securities settlement systems (hereinafter the ‘draft royal decree’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and on the fifth and sixth indents of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft royal decree concerns the criteria for direct participation in securities settlement systems (SSSs), which raise issues in terms of assessing their systemic risk and financial stability implications. 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 royal decree

text: The purpose of the draft royal decree is to extend the list of participants to SSSs that are covered by the Belgian law of 28 April 1999 implementing Directive

text: of 19 May 1998 on settlement finality in payment and securities settlement systems (hereinafter the ‘Law of 28 April 1999’) and, thus, by the settlement finality protection of Directive

text: of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems (hereinafter the ‘Settlement Finality Directive’). To this end, the draft royal decree introduces a third subparagraph in

text: Article 2

text: §2 of the Law of 28 April 1999. This new provision is intended to allow any legal person to acquire the status of direct participant in an SSS within the meaning of the Law of 28 April 1999, thus benefiting from settlement finality protection even if this legal person does not qualify as a credit

text: institution or investment firm or does not perform similar functions (see current first subparagraph of abovementioned

text: Article 2

text: §2) or as a designated central counterparty, settlement agent, clearing house or similar institution (see current second subparagraph of abovementioned

text: Article 2

text: §2), provided at least three other participants in this SSS fall within one of these two categories.

text: 2. General Observations

text: 2.1 The draft royal decree intends to use the possibility under the second subparagraph of

text: Article 2

text: (b) of the Settlement Finality Directive for Member States to opt for such extension. The ECB trusts that, in accordance with the principle of supremacy of Community law and with

text: Article 2

text: §52° of the Law of 28 April 1999, the extension of the list of participants by the draft royal decree will, besides the condition already expressly mentioned in this draft, also be subject to the other two conditions in

text: Article 2

text: (b) of the Settlement Finality Directive, namely (i) that the legal entity in question has responsibility for discharging the financial obligations arising from transfer orders with the SSS; and (ii) that the extension decision is warranted on grounds of systemic risks. For reasons of legal certainty, the Belgian legislator could clarify this, for instance through an express statement to this effect in the statement of reasons accompanying the royal decree. 2.2 In view of the Eurosystem and ECB tasks, amongst others the protection of financial stability through the removal of systemic risks, the ECB is particularly attentive to the systemic risk requirement in the second subparagraph of

text: Article 2

text: (b) of the Settlement Finality Directive (see also paragraph 4 above). In this respect, the ECB understands that the draft royal decree is intended to respond to an issue regarding Recommendation 1 (‘Legal risk’) of the CPSS/IOSCO Recommendations for Securities Settlement Systems . The ECB notes that this issue was addressed as follows in the 2006 Financial System Stability Assessment on Belgium by the International Monetary Fund : ‘There are adequate rules for addressing the event of a participant default, including the effective use of collateral, and these rules can legally be enforced. However, nonfinancial participants in the [Euroclear System], which account for less than 0,5 percent of total settlement activities, are not protected against the zero hour rule. A legislative project is already underway that would address this residual risk’. The ECB therefore strongly welcomes the objective of the draft royal decree of swiftly removing this residual risk, especially as there is neither a limitation on the potential number of such non-financial participants, nor on the possible volume of instructions that such non-financial participants might give. 2.3 Finally, the ECB points out that the Settlement Finality Directive grants far-reaching legal protection, which amongst others consists of the exclusion of the zero-hour rule in case of insolvency. It should therefore only cover payment and security transfer orders by participants

text: who, because of their nature, activities and/or status, merit the benefit of this protection. In this context, the ECB notes that the ‘normal’ categories of direct participants that benefit from this protection are, in one way or the other, either public authorities or entities subject to a supervisory regime (see first subparagraph of

text: Article 2

text: (b) of the Settlement Finality Directive and

text: Article 2

text: §2 of the Law of 28 April 1999). By contrast, this is not the case for the entities covered by the second subparagraph of

text: Article 2

text: (b) of the Settlement Finality Directive, and similarly also the draft royal decree, which only generally designate the direct participants that can benefit from the extension of the protection of the Settlement Finality Directive (compare ‘undertaking’ and ‘legal person’, respectively). This designation does, in particular, not require any specific legal supervisory status or other statutory qualifications for such participants. This is particularly relevant for ‘undertakings’ within the meaning of the second subparagraph of

text: Article 2

text: (b) of the Settlement Finality Directive whose head office is outside the Community (compare with ‘any undertaking’ in the first subparagraph of

text: Article 2

text: (b)). For financial stability and systemic risk reasons, the ECB considers that all legal persons that benefit from this extension should first be subject to the same conditions, including access conditions, as those imposed by an SSS for public authorities or supervised entities to be accepted as direct participants and retain this capacity. Furthermore, the ECB trusts that both the authority responsible for oversight of the concerned SSS and the authority responsible for prudential supervision of the entity operating this SSS will ensure as part of their supervisory and regulatory duties that the extension of the direct participation benefit is, in practice, only granted to legal entities that do not endanger the reputation and financial stability of the concerned SSS.

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

text: Done at Frankfurt am Main, 5 July 2006.

text: [signed]

text: The President of the ECB

text: Jean-Claude TRICHET


text: KOM(2006) 243 slutlig innehåller båda förslagen (2006/0078(CNS) och 2006/0079(CNS)).

text: EUT C 161, 1.7.2005, s. 11.

text: Kursiverad stil i texten anger de strykningar som ECB föreslår.

text: Text markerad med fet stil anger ECB:s förslag till ny text.

text: EGT L 181, 4.7.2001, s. 6.

sprak: sv

title: Europeiska centralbankens yttrande av den  5 juli 2006  på begäran av Europeiska unionens råd över två förslag till rådets beslut om handlingsprogrammet för utbyte, stöd och utbildning med avseende på skydd av euron mot förfalskning (Perikles-programmet) (CON/2006/35)

text: Inledning och rättslig grund

text: Den 12 juni 2006 mottog Europeiska centralbanken (ECB) begäran från Europeiska unionens råd om yttranden över två föreslagna åtgärder: ett förslag till rådets beslut om ändring och förlängning av beslut

text: om inrättande av ett handlingsprogram för utbyte, stöd och utbildning med avseende på skydd av euron mot förfalskning (Perikles-programmet) och ett förslag till rådets beslut om att till icke deltagande medlemsstater utsträcka tillämpningen av rådets beslut om ändring och förlängning av beslut

text: om inrättande av ett handlingsprogram för utbyte, stöd och utbildning med avseende på skydd av euron mot förfalskning (Perikles-programmet).

text: ECB:s behörighet att avge ett yttrande grundar sig på artikel 105.4 i fördraget om upprättandet av Europeiska gemenskapen. I enlighet med

text: artikel 17.5

text: första meningen i arbetsordningen för Europeiska centralbanken har detta yttrande antagits av ECB-rådet.

text: 1. Allmänna kommentarer

text: Kampen mot förfalskning av euron är av stor vikt för medborgarnas förtroende för den gemensamma valutan. ECB, som har ensamrätt att tillåta utgivning av eurosedlar i gemenskapen, är aktivt involverad i denna satsning. Närmare bestämt utvecklar ECB utformningen av sedlar och avancerade tekniska kännetecken som införs i eurosedlarna, vilket gör det möjligt både för lekmän och experter att skilja mellan äkta sedlar och förfalskningar. ECB analyserar dessutom nya typer av förfalskningar vid sitt Centrum för analys av sedelförfalskningar (CAC) och använder den kunskapen för att bättre kunna råda brottsbekämpande myndigheter och förbättra kännetecknen hos framtida sedlar. CAC samordnar spridningen av alla kända tekniska och statistiska uppgifter om förfalskningar av euron till alla berörda parter. ECB välkomnar Perikles-programmet som ett användbart bidrag till den verksamhet som utförs av ECB, EUROPOL och nationella myndigheter i kampen mot förfalskning av euron.

text: 2. Specifika kommentarer

text: ECB har två specifika kommentarer till den föreslagna lagstiftningen, i linje med vissa av de kommentarer som gjordes i yttrande

text: av den 21 juni 2005 avseende förlängningen av tiden för Perikles-programmet och utvidgningen av dess materiella innehåll.

text: 2.1 Längden på den föreslagna förlängningen

text: Det är viktigt för gemenskapslagstiftningen att säkerställa att förlängningen av Perikles-programmet på ett lämpligt sätt är kopplat till tidpunkten för i) införandet av euron i de nya medlemsstaterna, och ii) utgivningen av en andra serie eurosedlar. ECB bekräftar att en förlängning till den 31 december 2013 skulle innebära en sådan lämplig koppling.

text: 2.2 ECB:s och Europols inblandning i finansieringsbeslut enligt Perikles-programmet

text: För att undvika överlappning och säkerställa att åtgärderna enligt Perikles-programmet är överensstämmande och kompletterande, samt för att dra nytta av ECB:s expertis på detta område, vore det fördelaktigt för kommissionen, ECB och Europol att gemensamt utvärdera initiativ som skall finansieras av Perikles-programmet samt att det för ett urvalsbeslut krävs att de två senare organens åsikter begärs in och vederbörligen beaktas, inom ramen för den styrgrupp som redan inrättats för att ta fram en gemensam strategi mot förfalskningar av euron.

text: 3. Ändringsförslag

text: Förutom de råd som ges ovan, återfinns ett ändringsförslag i bilagan.

text: BILAGA

text: Kommissionens förslag | ECB:s ändringsförslag

text: [För närvarande inget förslag] | Skäl 7 skall ersättas av följande: Utan att påverka den roll som tilldelats ECB och den styrgrupp som inrättats mellan kommissionen, ECB och Europol för skyddet av euron mot förfalskning, kommer kommissionen att på varje sätt samråda med de berörda huvudaktörerna (framför allt de behöriga nationella myndigheter som medlemsstaterna utsett, ECB och Europol) för utvärderingen av de behov som finns avseende skyddet av euron i den lämpliga rådgivande kommitté som föreskrivs i förordning

text: (EG) nr 1338/2001

text: av den 28 juni 2001 om fastställande av nödvändiga åtgärder för skydd av euron mot förfalskning, särskilt i fråga om utbyte, stöd och utbildning, när det gäller detta programs tillämpning.

text: Motivering – se punkt 2.2 i yttrandet

text: [För närvarande inget förslag] | Följande mening skall läggas till

text: artikel 5.1 andra stycket

text: . De senare skall framföra sina åsikter som vederbörligen skall beaktas vad avser valet, enligt

text: artikel 12.2

text: , av projekt som lagts fram av medlemsstaterna eller som kommissionen lagt fram på eget initiativ.

text: Motivering – se punkt 2.2 i yttrandet


text: EUT L 106, 15.4.2004, s. 22. Beslutet senast ändrat genom beslut

text: , Euratom (EUT L 22, 26.1.2006, s. 32).

text: EGT L 300, 29.11.2000, s. 2.

text: EGT L 149, 23.6.2000, s. 21. Beslutet ersatt av beslut

text: , Euratom (EUT L 230, 28.8.2002, s. 7).

text: Kursiverad stil i texten anger de strykningar som ECB föreslår.

text: Text markerad med fet stil anger där ECB föreslår att ny text införs.

title: Europeiska centralbankens yttrande av den  6 juli 2006  på begäran av Europeiska unionens råd över ett förslag till rådets förordning om ändring av förordning (EG) nr 974/98 om införande av euron och ett förslag till rådets förordning om ändring av förordning (EG) nr 2866/98 om omräkningskurserna mellan euron och valutorna för de medlemsstater som inför euron (CON/2006/36)

text: Inledning och rättslig grund

text: Den 4 juli 2006 mottog Europeiska centralbanken (ECB) en begäran från Europeiska unionens råd om ett yttrande över ett förslag till rådets förordning om ändring av förordning

text: (EG) nr 974/98

text: om införande av euron (nedan kallad den föreslagna förordningen I) och över ett förslag till rådets förordning om ändring av förordning

text: (EG) nr 2866/98

text: om omräkningskurserna mellan euron och valutorna för de medlemsstater som inför euron (nedan kallad den föreslagna förordningen II).

text: ECB:s behörighet att avge ett yttrande grundar sig på artikel 123.5 i fördraget om upprättandet av Europeiska gemenskapen, som är grunden för de två föreslagna förordningarna. I enlighet med

text: artikel 17.5

text: 1. Syftet med de föreslagna förordningarna

text: 1.1 De föreslagna förordningarna kommer att möjliggöra införandet av euron som Sloveniens valuta, efter upphävandet av Sloveniens undantag i enlighet med förfarandet i artikel 122.2 i fördraget.

text: 2. Specifika anmärkningar

text: 2.1 Vad avser den föreslagna förordningen I rekommenderar ECB att

text: artikel 2 andra stycket

text: inte uttryckligen bör hänvisa till protokollen 25 och 26 eller till artikel 122.1 i fördraget, utan istället hänvisa generellt till fördraget i enlighet med punkt A.4 a ii i bilaga V till

text: rådets beslut 2004/338/EG

text: , Euratom av den 22 mars 2004 om antagande av rådets arbetsordning. Det bör i detta sammanhang noteras att

text: rådets förordning (EG) nr 2596/2000 av den 27 november 2000

text: om ändring av förordning

text: (EG) nr 974/98

text: om införande av euron som antogs vid införandet av euron i Grekland, inte innehöll några referenser till de ovannämnda protokollen eller till artikel 122.1 i fördraget i enlighet med punkt A.4 a ii i bilaga II till

text: rådets beslut 2000/396/EG

text: , EKSG, Euratom av den 5 juni 2000 om antagande av rådets arbetsordning.

text: 2.2 ECB välkomnar den föreslagna förordningen II som oåterkalleligen skulle fastställa omräkningskursen mellan euron och den slovenska tolaren till lika med centralkursen för den slovenska tolaren i växelkursmekanismen II (ERM II), dvs. 1 euro = 239,640 SIT. ECB har inget att invända mot att den föreslagna förordningen II antas flera månader innan Slovenien antar euron. Som en bestämmelse i en gemenskapsförordning som har generell tillämpning (dvs. som till alla delar är rättsligt bindande och direkt tillämplig i alla medlemsstater) kommer omräkningskursen mellan euron och den slovenska tolaren att från och med den 1 januari 2007 tillämpas i alla rättsliga instrument som hänvisar till Sloveniens valuta, i likhet med omräkningskurserna mellan euron och de övriga deltagande medlemsstaternas valutor när de antog euron.

text: 3. Ändringsförslag

text: Förutom de råd som ges ovan, finns ett ändringsförslag i bilagan.

text: BILAGA

text: Denna förordning är till alla delar bindande och direkt tillämplig i alla medlemsstater i enlighet med fördraget, om inte annat följer av protokollen 25 och 26 samt

text: artikel 122.1

text: . | Denna förordning är till alla delar bindande och direkt tillämplig i alla medlemsstater i enlighet med fördraget om upprättandet av Europeiska gemenskapen.


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

text: ECB Opinion

text: of 22 February 2006 at the request of the Cypriot Ministry of Finance on a draft law amending the Cyprus Securities and Stock Exchange (Central Depository and Central Securities Registry) Laws of 1996 to 2005, available on the ECB’s website at www.ecb.int 3 Published in 1998, the Eurosystem user standards have been regarded as de facto common standards for EU securities settlement systems. Nevertheless, they are not intended to be a comprehensive set of standards for the oversight or supervision of securities settlement systems. The standards are available on the ECB’s website at http://www.ecb.int/home/html/index.en.html.

text: Paragraph 6.1 of ECB Opinion

text: It is also noted that Article 4 of the draft decision on clearing and settlement does not specify the clearing and settlement currency.

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).

text: Paragraph 4.1 of ECB Opinion

text: Law 8(I)/2003 on settlement finality in payment and securities settlement systems (Official Gazette of the Republic, No 3679, 31.1.2003). Also see ECB Opinion

text: of 10 August 2005 at the request of the Central Bank of Cyprus on a draft law amending the Settlement Finality in Payment Systems and Securities Settlement Systems Law of 2003.

text: Directive

text: of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives

text: and

text: and Directive

text: of the European Parliament and of the Council and repealing

text: Council Directive 93/22/EEC

text: (OJ L 145, 30.4.2004, p. 1). Directive as amended by Directive

text: (OJ L 114, 27.4.2006, p. 60).

text: In this regard, the ECB also draws the consulting authority’s attention to the recommendations of the Giovannini Group on ‘Cross-Border Clearing and Settlement Arrangements in the European Union’ of November 2001 (the ‘First Giovannini Report’) and the ‘Second Report on EU Clearing and Settlement Arrangements’ of April 2003 (the ‘Second Giovannini Report’), in particular, to the Group’s recommendations for the elimination of barrier 5 (‘Practical impediments to remote access to national clearing and settlement systems’), according to which ‘[O]perators of systems should seek to ensure that access to their systems is on the basis of non-discriminatory criteria, and that where possible those accessing the system remotely are on a level footing with local members’ (First Giovannini Report, p. 48, Second Giovannini Report, p. 18). The texts of the Giovannini Reports are available at http://ec.europa.eu/economy_finance/giovannini/clearing_settlement_en.htm.

text: In this regard, the ECB also draws the consulting authority’s attention to the recommendations of the Giovannini Reports and, in particular, to the Group’s recommendations for the elimination of barrier 9 (‘National restrictions on the location of securities’), for the purposes of which ‘…restrictions [on the location of securities] can limit the choices for issuers when placing their securities and/or make it more complicated to hold and settle those securities in Member States other than the place of issuance’ (First Giovannini Report, p. 49, Second Giovannini Report, p. 19).

text: Directive

text: of the European Parliament and of the Council of 6 June 2002 on financial collateral arrangements (OJ L 168, 27.6.2002, p. 43).

text: Law 43(I)/2004 on financial collateral arrangements (Official Gazette of the Republic, No 3823, 19.3.2004).

title: Opinion of the European Central Bank of 11 July 2006 at the request of the Cypriot Ministry of Finance on two draft regulatory decisions issued by the Cyprus Stock Exchange Council (CON/2006/37)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 11 July 2006 at the request of the Cypriot Ministry of Finance on two draft regulatory decisions issued by the Cyprus Stock Exchange Council (

text: ) Introduction and legal basis

text: On 24 May 2006 the European Central Bank (ECB) received a request from the Cypriot Ministry of Finance (hereinafter the ‘consulting authority’) for an opinion on two draft regulatory decisions issued by the Cyprus Stock Exchange Council (hereinafter jointly referred to as the ‘draft decisions’). The ECB’s competence to deliver an opinion is based on the fifth indent 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 , as the draft decisions relate 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 decisions

text: The purpose of the draft decisions is to (i) regulate the operation of the Central Depository and Central Registry (CDCR) for securities traded on the Cyprus Stock Exchange (CSE); and (ii) govern the clearing and settlement of transactions in book-entry securities in the CDCR. The draft decisions, inter alia, touch upon the operation of investors’ securities accounts, the registration of securities with the CDCR, the trading currency for transactions in securities in the CDCR and the clearing and settlement of such transactions.

text: 2. General observations

text: 2.1 The ECB is pleased to note that the present consultation request follows the recent consultation on a draft law amending the Cyprus Securities and Stock Exchange (Central Depository and Central Securities Registry) Laws of 1996 to 2005 (hereinafter the ‘Law’) and appreciates that several of

text: the recommendations made in the ECB opinion issued on that occasion have been taken on board by the Cyprus Stock Exchange Council (hereinafter the ‘CSE Council’). Moreover, the ECB understands that the entry into force of the draft decisions will signal a major overhaul of the operational and trading rules and regulations of the Cyprus Stock Exchange (CSE) and welcomes the opportunity to comment on the draft decisions. 2.2 The ECB also notes that upon adoption of the euro in Cyprus, the CDCR will have to be assessed against the Eurosystem standards for the use of EU securities settlement systems in ESCB credit operations (the ‘Eurosystem user standards’) . For that reason, the ECB’s comments in this opinion are without prejudice to a future assessment of the CDCR against the abovementioned standards.

text: 3. Specific observations on the draft decision on clearing and settlement

text: Use of the euro as a trading currency

text: 3.1 In ECB Opinion

text: , the ECB commented on a draft provision purporting, inter alia, to delegate to the CSE Council the power to designate the currency in which transactions are to be conducted in the context of the planned common trading platform between the CSE and the Athens Stock Exchange (ASE). In its opinion, the ECB invited the legislator to clarify whether the purpose of the proposed amendment was to enable the CSE Council to designate the euro as a reference unit for transactions or to institute the euro as the settlement currency for such transactions, noting that ‘[w]hilst the use of the euro as a trading unit of account in a common platform raises no concern, its use as a settlement currency would need to take into account that, before Cyprus adopts the euro, it qualifies in Cyprus as a foreign currency, and thus it is subject to liquidity and credit risks. This may have implications for the smooth settlement of securities transactions’ . 3.2 Article 2 of the draft regulatory decision governing the clearing and settlement of transactions in book-entry securities in the CDCR (hereinafter the ‘draft decision on clearing and settlement’), entitled ‘Trading currency’, inter alia, provides that the financial value of such transactions must be denominated in euro . In this regard, the ECB draws the consulting authority’s attention to its comments in ECB Opinion

text: , as cited above.

text: Settlement finality issues

text: 3.3 In ECB Opinion

text: , the ECB commented on a draft provision purporting, inter alia, to delegate to the CSE Council the power to determine settlement finality issues. On that occasion, the ECB noted that as Cyprus has implemented the Settlement Finality Directive (SFD) , the draft law could further clarify that settlement finality issues are governed by the national law implementing the SFD, and that it is only on technical issues (including deadlines, transfer of funds issues, etc.) that the CSE Council will enjoy decision-making powers . 3.4 Articles 9.2 and 9.3 of the draft decision on clearing and settlement set out rules regarding the finality of transactions. The ECB recommends that these should be supplemented by express provisions regarding the moment of entry into the system in accordance with Article 3(3) of the SFD. 3.5 The ECB reminds the consulting authority of the provisions of Cypriot law implementing the SFD and draws its attention to the interaction of those provisions with Article 16.6 of the draft decision on clearing and settlement, which, inter alia, provides that settlement of each purchase or sale must be construed as final and irrevocable, subject solely to the facility to correct records in the CDCR, as provided for in the Law and the draft regulatory decision governing the operation of the CDCR (hereinafter the ‘draft decision on the operation of the CDCR’). 3.6 Article 16.4 of the draft decision on clearing and settlement sets out the modalities for the settlement of transactions on a delivery versus payment basis. The ECB recommends that this provision should be supplemented by a reference to the requirements and effects of transfers to the securities accounts referred to therein, which the ECB understands to be intended as legally effective book-entry credits, valid erga omnes.

text: Access to the CDCR

text: 3.7 Article 26 of the draft decision on clearing and settlement provides that remote CSE members (i.e. members not legally established in Cyprus) may carry out the actions provided for in the draft decision on clearing and settlement through a single depository acting as the remote member’s agent. The ECB notes that this provision is inconsistent with Articles 34 and 36 of the Markets in Financial Instruments Directive (hereinafter the ‘MiFID’) , pursuant to which investment firms

text: from other Member States have a right of access to central counterparty, clearing and settlement systems under the same conditions as the those applying to local participants .

text: 4. Specific observations on the draft decision on the operation of the CDCR

text: Access to the CDCR

text: 4.1 Article 2 of the draft decision on the operation of the CDCR states that securities listed on the CSE must be registered with the CDCR. The ECB notes that this provision is inconsistent with Article 34 of the MiFID and draws the consulting authority’s attention to its implications for the listing as well as for the clearing and settlement of transactions in securities listed on the CSE, including those issued by non-Cypriot issuers .

text: Pledge of securities

text: 4.2 Article 32 of the draft decision on the operation of the CDCR governs the pledge of securities. In this regard, the consulting authority’s attention is drawn to the the Cypriot law implementing the Financial Collateral Directive (FCD) , and governing pledge together with all other financial collateral arrangements . The relationship between the existing provisions of Cypriot law on pledge, which implement the FCD, and those set out in the draft decision on the operation of the CDCR should be clarified. Moreover, apparent conflicts between the FCD and the draft decision should be removed, as in the case of paragraphs 3.2 and 5.1 of Article 32 of the draft decision. The former of these paragraphs prohibits the re-use of pledged assets, which is contrary to Article 5 of the FCD, while the latter contemplates a realisation with court approval, unlike Article 4 of the FCD, which does not.

text: This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 11 July 2006. [signed]

text: The President of the ECB

text: Jean-Claude TRICHET


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

text: See e.g. the ECB’s Convergence Report 2004, p. 28. 3 See e.g. the Amended proposal for a Decision of the European Parliament and of the Council establishing a programme of Community action in the field of consumer policy (2007-2013), COM(2006) 235 final.

text: Available at: http://www.bis.org/publ/bcbs30a.pdf.

title: Opinion of the European Central Bank of 25 July 2006 at the request of the Bank of Greece on a draft provision on the Bank of Greece’s powers in the field of consumer protection (CON/2006/38)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 25 July 2006 at the request of the Bank of Greece on a draft provision on the Bank of Greece’s powers in the field of consumer protection (

text: ) Introduction and legal basis

text: On 3 July 2006 the European Central Bank (ECB) received a request from the Bank of Greece for an opinion on a draft provision on the Bank of Greece’s powers in the field of consumer protection (hereinafter the ‘draft provision’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and on the third indent of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft provision concerns a national central bank (NCB). 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 provision

text: 1.1 The draft provision would establish a comprehensive consumer-protection regime for transactions in financial products and services offered by entities supervised by the Bank of Greece. More specifically, it would give the Bank of Greece powers to lay down rules on the following: (i) the transparency of transactions in financial products and services; and (ii) the protection of consumers entering into transactions with entities supervised by the Bank of Greece. The latter power would more specifically include laying down rules on the calculation of interest rates, issuance of all types of payment instruments, financial intermediaries, credit advertising, a consumer’s right to opt out of a financial contract or terminate it early, and a financial institution’s duty to provide information to consumers. The draft provision also lays down the Bank of Greece’s powers to impose sanctions in case of failure to comply with the abovementioned rules and the procedures for imposing such sanctions.

text: 1.2 Furthermore, under paragraph 3 of the draft provision, a consultative body would be established in which both the Ministry of Development and the Bank of Greece would participate with the purpose of applying and developing best practices for effective consumer protection, implementing the relevant Community Directives and promoting training programmes addressed both to consumers and to the staff of financial institutions. 1.3 Finally, the draft provision regulates the civil liability of the Bank of Greece’s statutory bodies and staff for their acts or omissions when carrying out duties on the basis of the public authority assigned to the Bank of Greece. In this context, it establishes that a collective body or member of staff would only be liable in the case of their wilful misconduct or gross negligence.

text: 2. General observations

text: 2.1 As regards the granting of new consumer-protection powers to the Bank of Greece, the ECB would draw attention to the fact that the new tasks described under paragraph 1.1 are not listed among the functions of the NCBs as specified in the Statute of the European System of Central Banks and of the European Central Bank. However, without prejudice to the Governing Council’s powers to take action under Article 14.4 of the Statute, the ECB does not consider that the abovementioned tasks would interfere with the objectives and tasks of the European System of Central Banks (ESCB). 2.2 Nonetheless, it should be noted that pursuant to the last sentence of Article 14.4 of the Statute, the new tasks described in paragraphs 1.1 and 1.2 would have to be performed on the responsibility and liability of the Bank of Greece, and would not be regarded as being part of the functions of the ESCB. 2.3 In more general terms, the ECB welcomes the allocation of new powers under the draft provision to the Bank of Greece to ensure the transparency of terms and procedures of transactions carried out by entities subject to its supervision (i.e. credit institutions, financial leasing companies, factoring companies, mutual guarantee companies, money-market broker companies, counterguarantee funds and bureaux de change). The imposition of specific transparency requirements for financial transactions, accompanied by effective monitoring of the compliance with those requirements, should allow consumers to compare more easily different products and services on offer and could therefore enhance competition between intermediaries. Moreover, such powers comply with the objectives of financial supervision as laid down in the Statute of the Bank of Greece. In this context, the ECB would draw attention to

text: Article 55

text: A of the Statute of the Bank of Greece, which states that ‘prudential supervision shall also be aimed at ensuring transparency of the procedures and terms of transactions carried out by those subject to supervision’. Indeed, prudential supervision and investor/consumer protection are both intended to safeguard the soundness of the financial market and the preservation of confidence in the marketplace. However, it is important to ensure that both functions have adequate and equal emphasis and that appropriate organisational requirements are in place to ensure it. Therefore, the Bank of Greece’s intention to

text: allocate the functions attributed by the draft provision to a specific department goes in the right direction.

text: 3. Specific observations

text: 3.1 Exclusive competence of the Bank of Greece It is the ECB’s understanding that all rule-making described under paragraphs 1.1 and 1.2 would fall under the Bank of Greece’s exclusive competence. Such exclusive competence in relation to the protection of consumers of financial services would also correspond with the Bank of Greece’s exclusive competence to supervise the entities described in

text: Article 55

text: A of its Statute. The ECB welcomes the fact that the Bank of Greece would have the power to establish rules in relation to the transparency of transactions in financial services and products offered by supervised entities, as this could improve the clarity and efficiency of the regulatory framework in Greece, simultaneously ensuring both adequate consumer protection and a level playing field. 3.2 Financial independence of the Bank of Greece The ECB observes that the new tasks described under paragraphs 1.1 and 1.2 are bound to require the Bank of Greece to commit considerable resources, both human and financial, to tasks other than the functions specified in the Statute. The ECB has consistently held the view that ‘Member States may not put their NCBs in the position of not having sufficient financial resources to carry out their ESCB or Eurosystem related tasks, as applicable’. The ECB therefore expects that, in planning the transfer of additional powers to the Bank of Greece, care will be taken to ensure that the Bank’s operational capacity to carry out Eurosystem-related tasks will not be affected. 3.3 Establishment of a joint consultative body Paragraph 3 of the draft provision could be enhanced by giving the consultative body to be established between the Bank of Greece and the Ministry of Development the task of organising consultations with consumer associations, evaluating such consultations and putting the results to practical use. This would be in line with envisaged Community best practices in the field of consumer protection . 3.4 Liability regime The ECB welcomes paragraph 4 of the draft provision, which adequately reflects the Core Principles for Effective Banking Supervision adopted by the Basel Committee on Banking Supervision by requiring protection from personal and institutional liability for supervisory actions

text: taken by bodies and staff of the Bank of Greece in good faith in the course of performing their supervisory duties. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 25 July 2006. [signed]

text: The President of the ECB

text: Jean-Claude TRICHET


text: Consolidated text: Dz. U. of 2005, No 1, Item 2, as amended.

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

text: Current membership of the Banking Supervision Commission: (i) the NBP’s President as Chair; and (ii) the Minister for Finance or the appointed Secretary/Undersecretary of State in the Ministry of Finance (as deputy Chair); and (iii) the representative of Poland’s President; and (iv) the Bank Guarantee Fund’s Chair; and (v) the Securities and Exchange Commission Chair or Deputy; and (vi) the representative of the Minister for Finance; and (vii) the General Inspector of Banking Supervision (Article 26(1) of the Law on NBP).

text: The draft law on supervision of financial market, as adopted by Sejm on 21 July 2006 (Sejm ref. No 802) and provided to Senat for review.

text: Opinion

text: of 9 March 2006 at the request of the Polish Minister of Finance on a draft law on the supervision of financial institutions.

text: The FSC is to be composed of: (i) the FSC Chair, appointed by the Prime Minister for a five-year term in office; and (ii) the two FSC Deputy Chairs, appointed and dismissed by the Prime Minister on a motion by the FSC Chair; and (iii) the Minister responsible for financial institutions or representative thereof; and (iv) the Minister responsible for social security or representative thereof; and (v) NBP’s President or the delegated Vice-President; and (vi) a representative of Poland’s President (

text: Article 5(1)

text: in conjunction with

text: Article 3(1)

text: Article 68

text: and Article 69(2) of the draft law on the supervision of the financial market).

text: Article 80(2) of the draft law on the supervision of the financial market. Additionally, as a result of winding-up the Securities and Exchange Commission its Chair will cease to be a member of the Banking Supervision Commission.

text: See International Monetary Fund, ‘Concluding Statement of the 2006 Article IV Consultation Mission’, 22 May 2006, paragraph 13, as published on the IMF website (www.imf.org); Organisation for Economic Co-operation and Development, ‘Economic Survey of Poland, 2006’, 28 June 2006, p. 4, as published on the OECD website (www.oecd.org).

text: Directive

text: of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions (recast) (OJ L 177, 30.6.2006, p. 201). See paragraph 6.1 of Opinion

text: Paragraph 2.1.2 of the Opinion

text: ; cf. paragraph 4 of ECB Opinion

text: of 25 May 2001 at the request of the Austrian Ministry of Finance on a draft Federal law establishing and organising the financial market supervisory authority [title shortened]; paragraph 5 of ECB Opinion

text: of 8 November 2001 at the request of the German Ministry of Finance on a draft law establishing an integrated financial services supervision.

text: NBP’s President is appointed and dismissed by Sejm, at the request of Poland’s President, for a term of six years (Article 9(1) of the Law on NBP).

text: NBP’s President appoints and dismisses the General Inspector of Banking Supervision, acting in agreement with the Minister for Finance (Article 29(3) of the Law on NBP).

text: The Fund’s Council appoints and dismisses the Bank Guarantee Fund’s Chair for the three-year term in office (while the Prime Minister, the Minister for Finance, NBP’s President and the Polish Bank Association are involved in appointing members to the Fund’s Council;

text: Article 9(1)

text: and (3) to (5),

text: Article 6(1)

text: to (3) of the Law on the Bank Guarantee Fund of 14 December 1994, consolidated text: Dz.U. of 2000, No 9, Item 131, as amended).

text: The Prime Minister appoints the Chair of the Securities and Exchange Commission, for a five-year term in office, acting on a motion he Minister responsible for financial institutions presented in agreement with NBP’s President (Article 8(2) of the Law of 29 July 2005 on supervision of the capital market, Dz. U. 2005 No 183, Item 1537).

text: Such would be the status of the following members: a representative of the Prime Minister in their capacity as the Commission’s Chair, a representative of Poland’s President, three Sejm representatives and a representative(s) of the Minister for Finance.

text: See Bank for International Settlements, Core Principles for Effective Banking Supervision, September 1997, Principle 1; see the Consultative Document on the Core Principles for Effective Banking Supervision, April 2006, Principle 1; documents available on the BIS website (www.bis.org).

text: See paragraph 3.1.1 of Opinion

text: The closest legislative provision which may currently imply NBP’s financial stability role is its statutory objective to ‘establish the necessary conditions for the development of the banking system’ (

text: Article 3(2)

text: (6) of the Law on NBP). See paragraph 2.2.1 of Opinion

text: See paragraph 2.2.2 of Opinion

title: Opinion of the European Central Bank of 2 August 2006 at the request of Poland’s Sejm Marshall on a draft law amending the Law on Narodowy Bank Polski (CON/2006/39)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 2 August 2006 at the request of Poland’s Sejm Marshall on a draft law amending the Law on Narodowy Bank Polski (

text: ) Introduction and legal basis

text: On 14 June 2006, the European Central Bank (ECB) received a request from Poland’s Sejm Marshall for an opinion on a draft law (hereinafter the ‘draft law’) amending the Law on Narodowy Bank Polski of 29 August 1997 (hereinafter the ‘Law on NBP’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and the third and sixth 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 , as the draft law relates to a national central bank, namely Narodowy Bank Polski (NBP), 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: The draft law proposes to amend the Law on NBP by modifying the composition of the Banking Supervision Commission, currently a seven-member body chaired by the President of NBP and supported by NBP staff . Following the draft law: (i) the membership of the Commission would be expanded to include, in addition to the current members, three representatives of Sejm (one of the two Parliamentary chambers) and a representative of the Council of Ministers’ President (the Prime Minister); and (ii) the chair of that Commission would be re-allocated from NBP’s President to a representative of the Prime Minister .

text: 2. General observations

text: 2.1 The draft law was proposed in parallel with another legislative proposal aiming at a broader

text: modification of the institutional set-up for banking supervision in Poland, i.e. the draft law on the

text: supervision of the financial market , on whose earlier version the ECB commented in ECB Opinion

text: . In its current version, the draft law on the supervision of the financial market

text: foresees the taking over of the banking supervision responsibilities from 1 January 2008 by a

text: consolidated financial supervisor under the name of the Financial Supervision Commission (FSC) .

text: In the temporary period before 1 January 2008, the Banking Supervision Commission would be

text: chaired by the Financial Supervision Commission’s Chair, appointed by the Prime Minister .

text: 2.2 The ECB understands that only one of the legislative proposals in question – i.e. either the draft

text: law subject to current consultation or the draft law on the supervision of the financial market –

text: would be subject to further legislative work. Whatever the Polish legislator’s final decision, the

text: ECB would like to reaffirm its very positive assessment of the current institutional model for the

text: prudential supervision of credit institutions in Poland, which ensures effective synergies between

text: the Banking Supervision Commission and NBP. In concurrence with the recent comments by

text: international bodies , the ECB notes that any modification to the current arrangements will need to

text: safeguard the effectiveness of the Polish supervisory system and smooth interaction between the

text: relevant authorities. The on-going implementation of the recast Capital Requirements Directive is

text: one area where there is a particular need to ensure the continuity of supervisory activities and

text: macro-prudential monitoring.

text: 2.3 In general, the ECB has consistently favoured the involvement of central banks in prudential

text: supervision. As already noted in the ECB Opinion

text: and previous ECB opinions ,

text: maintaining close involvement of NCBs in prudential supervision is an important condition for allowing the Eurosystem to contribute adequately to monitoring the risks to financial stability in the euro area, in accordance with Article 105(5) of the Treaty, and to safeguard smooth cooperation between the central bank functions exercised at the Eurosystem’s level and the supervisory functions carried out at national level.

text: 3. The banking supervisor’s operational independence

text: 3.1 In the composition of the Banking Supervision Commission proposed by the draft law, only a minority of the members would exercise their function ex officio, i.e. as a result of a nomination for a specified public office (those include: NBP’s President , the General Inspector of Banking 13 14 Supervision , the Chair of the Bank Guarantee Fund , the Chair of the Securities and Exchange Commission and the Minister for Finance, if he chooses to participate directly in the Commission’s work). The remaining six members, including the Chair, would be representatives of the appointing institutions, subject to recalling of their mandate at any time . Moreover, the ECB notes that the draft law provides neither for such members’ appropriate technical expertise nor for adequate safeguards against conflicts of interest. 3.2 The ECB recommends that any legislative provisions setting out an institutional framework for prudential supervision foresee for the members of the supervisory authority the appropriate criteria for technical expertise and for the avoidance of any conflict of interests, as well as adequate safeguards for decision-making autonomy in pursuance of the supervisory mandate. The adopted legislative rules should ensure the supervisory authority’s operational independence, in compliance with international standards for the operational independence of banking supervisors .

text: 4. The central bank’s financial stability role

text: 4.1 Under the current provisions of the Law on NBP, NBP’s President acts both as the Chair of the Banking Supervision Commission and supervisor of the General Inspectorate of Banking

text: Supervision, which is an organisational unit within NBP’s structure, functioning as the Banking Supervision Commission’s executive arm and closely cooperating with other relevant NBP departments. As already noted in ECB Opinion

text: , this current structure allows NBP to properly fulfill its financial stability role and, from a more specific Eurosystem perspective, is particularly well-designed to facilitate NBP’s contribution to the prudential supervision of credit institutions and the financial system’s stability, as required, also in the future euro accession context, under Article 105(5) of the Treaty . 4.2 It is noted in this context that NBP’s financial stability role – as currently exercised on the basis of the abovementioned institutional arrangements – lacks specific legislative definition in the Law on NBP . Assuming the implementation of a supervisory reform weakening the existing institutional relationship between NBP and the banking supervisory authority, the ECB recommends amending the Law on NBP, so as to specify that NBP has a formal responsibility for contributing to financial stability by monitoring and assessing the financial system as a whole, as a separate function from hands-on supervision and financial regulation .

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

text: Done at Frankfurt am Main, 2 August 2006.

text: [signed]

text: The President of the ECB

text: Jean-Claude TRICHET


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

text: See the document entitled ‘Decisions taken by the Governing Council of the ECB (in addition to decisions setting interest rates)’ for July 2005 and the related ECB press release of 22 July 2005 entitled ‘Eurosystem collateral framework: Inclusion of non-marketable assets in the Single List’, available on the ECB’s website at www.ecb.int.

text: See also the abovementioned document entitled ‘Decisions taken by the Governing Council of the ECB (in addition to decisions setting interest rates)’ for July 2005 and related ECB press release of 22 July 2005, the latter under the subheading ‘Additional legal requirements’.

text: Article 8 of the Law of 15 December 2004 on financial collateral and various tax provisions in relation to in rem collateral arrangements and loans for financial instruments.

text: See also paragraph 8 of ECB Opinion

text: of 3 November 2005 at the request of the Belgian Ministry of Finance on a draft law abolishing bearer securities and a draft royal decree concerning dematerialised corporate securities.

title: Opinion of the European Central Bank of 3 August 2006 at the request of the Belgian Ministry of Finance on a draft law amending the Organic Statute of the Nationale Bank van België/Banque Nationale de Belgique (CON/2006/40)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 3 August 2006 at the request of the Belgian Ministry of Finance on a draft law amending the Organic Statute of the Nationale Bank van België/ Banque Nationale de Belgique (

text: ) Introduction and legal basis

text: On 8 May 2006 the European Central Bank (ECB) received a request from the Belgian Ministry of Finance for an opinion on a draft law amending Article 7 of 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 Article 105(4) of the Treaty establishing the European Community and on the fifth and sixth 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 , as the draft law concerns the conditions under which claims (schuldvorderingen/créances) can be pledged to the Nationale Bank van België/Banque Nationale de Belgique (NBB) as collateral for the NBB’s credit operations. 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 purpose of the draft law is to introduce in Belgian law a specific technique for pledging claims to the NBB, thereby strengthening the protection of the NBB’s rights as a pledgee without this protection being dependent on ex ante notification of the pledge to the debtor. This protection should be viewed in the light of the requirement under primary Community law that Eurosystem credit operations are based on adequate collateral (Article 18.1 of the Statute of the European System of Central Banks and of the European Central Bank). As a result, the ECB has to ensure that appropriate legal rules and/or other measures exist. The ECB understands that the draft law will, in this respect only, replace the general Belgian regime applicable to pledges (see paragraph 2.2 below). The technique introduced by the draft law consists of entering the pledge in a register held by either the NBB or a third party authorised by the

text: NBB (hereinafter the ‘register’). This entry results, amongst other things, in the pledge being effective against third parties (erga omnes tegenwerpelijk/opposable erga omnes) except the debtor of the pledged claim, to whom the pledge is generally not notified ex ante (see paragraph 3.3 below). The register may only be consulted by third parties who are considering accepting in rem rights (including in rem security rights) over claims which are eligible to be pledged to the NBB. Only third parties who are entitled to consult the register are deemed by law to be acting in bad faith if they seek to exercise their right to a claim that has already been pledged to the NBB and entered in the register. The ECB understands that other third parties are only deemed to be acting in bad faith if they have actual knowledge of the pledge (e.g. the pledgor).

text: 2. General observations

text: 2.1 The pledging technique in the draft law enables the NBB to avoid certain legal risks relating to issues of priority that might arise under the general Belgian regime applicable to pledges (see paragraph 2.2 below). The ECB therefore welcomes the draft law. The draft law will become particularly relevant when the NBB accepts credit claims meeting the Eurosystem eligibility criteria as collateral following the introduction of a single list of eligible collateral for the Eurosystem’s credit operations, which will include credit claims (see also the explanatory memorandum accompanying the draft law, p. 1) from 1 January 2007 . 2.2 The present opinion is restricted to the draft law and does not cover claims collateralisation rules under the laws of other Member States that have adopted the euro (hereinafter ‘participating Member States’). The ECB nonetheless understands that Belgium is one of the participating Member States in which claims can be validly collateralised (e.g. through a pledge) without such validity being dependent on ex ante notification to, or recognition by, the debtor. Under the general Belgian regime applicable to pledges, the mere conclusion of the pledge agreement renders this pledge effective against all third parties, except against the debtor of the pledged claim (against whom the pledge is only effective if the pledge has been either notified to the debtor or the latter has recognised it). As a consequence, any debtor which has not been notified and which has not recognised the pledge can validly continue to pay the original creditor, provided that the debtor is acting in good faith (i.e. without having actual knowledge of the pledge through other means). Such notification or recognition is also relevant in determining the priority of claims in the event that two or more parties, acting in good faith, seek to exercise conflicting rights to the pledged claim (e.g. because the claim has been re-pledged or because ownership of the claim has been transferred), as the party which first notified the pledge to the debtor or to whom the debtor first recognised the pledge will have priority. This notification or recognition also determines whether the debtor, acting in good faith, is entitled to diminish or extinguish its debt through set-off or

text: another similar mechanism. Thus, while debtor notification might, in participating Member States such as Belgium, not be a statutory requirement for the validity of collateralisation of a claim, such notification may nonetheless be relevant for the value and effectiveness of the rights of the party that the collateral is intended to protect (in the present case the NBB). 2.3 In view of the diversity of national law regarding debtor notification, the consequences of an absence of such notification and the methods to address these consequences , the ECB does not require such notification in participating Member States where ex ante notification is not required for collateralisation of a claim to be valid. The pledging technique in the draft law guarantees the priority of the NBB’s rights in relation to a pledge that has been registered over in rem (security) rights that third parties subsequently establish on this pledged claim, since the pledging technique in the draft law deems such third parties by law to be acting in bad faith. However, given that the right to consult this register is restricted to third parties who intend to accept ‘an in rem (security) right’ on a claim that is eligible to be pledged to the NBB, the ECB understands that, for instance, the substitution of the debtor (delegatie/délégation) does not fall within this category. Consequently, as this technique and other similar techniques may still affect the rights of the NBB, it might be necessary to address this issue through other rules (e.g. contractual arrangements) or techniques. Also, it is not clear whether under the pledging technique in the draft law, a third party which had acquired an in rem right to a claim which was subsequently pledged to the NBB and entered in the register would have priority in the event that the third party’s right was notified to, or recognised by, the debtor after the NBB’s pledge was entered in the register. The ECB questions whether, in this specific case, making priority of the third party’s right dependent on its notification to, or recognition by, the debtor before the entry of the NBB’s pledge in the register might not provide more legal certainty than a ‘declaration of honour’ by the credit institution (pledgor) to the NBB of the absence of such a right. The ECB understands that there is a similar rule under the general Belgian regime applicable to pledges. Finally, the ECB notes that the benefit of the draft law is currently limited to claims pledged to the NBB and therefore does not apply to claims pledged under the pledging technique in the draft law to another Eurosystem central bank. Such an extension could, for instance, be relevant for the cross-border collateralisation of claims in the framework of Eurosystem credit operations if the NBB acts as correspondent agent for another Eurosystem central bank. In any event, the ECB understands that, even if the benefit of the draft law remains only applicable to claims pledged to the NBB, the general Belgian regime applicable to pledges, i.e. with ex ante notification not being a precondition for the pledge’s validity (see paragraph 2.2 above), will still allow such cross-border collateralisation. 2.4 While debtor notification might not be required for collateralisation of a claim to be valid under the general Belgian regime applicable to pledges (see paragraph 2.2 above), it might still affect the

text: value and effectiveness of the pledgee’s rights. Indeed, the question of whether or not the debtor can validly pay its creditor (the pledgor) or a third party (e.g. in the event of a subsequent pledge of the same claim) or validly diminish or even extinguish its debt through set-off depends on whether and when the pledge has been notified to, or recognised by, the debtor. The pledging technique in the draft law does not entirely eliminate the possibility of such payment and set-off, as Article 6 of the draft law only contains a prohibition on set-off by the debtor and an obligation for the debtor to pay the claim to the NBB in the event of the insolvency of the credit institution that pledged the claim to the NBB (see also paragraph 3.4 below). The NBB would be fully legally protected if the pledge would, by the mere fact of registration, also be effective against the debtor. In the absence of such a provision, the effects of the debtor’s payment and set-off possibility may be similar to in other participating Member States where debtor notification is not required for the collateralisation of a claim to be valid.

text: 3. Specific observations

text: 3.1 Article 6 of the draft law lists certain specific consequences of the pledge in the event that the credit institution that pledged the claim to the NBB becomes insolvent. Since the Eurosystem’s and the NBB’s credit operations also include intraday credit operations and as the counterparties who are eligible to conduct such operations are not restricted to credit institutions, the scope of

text: Article 6

text: , which only covers credit institutions, might be too narrow. Even though the ECB understands that, in practice, the NBB only envisages receiving credit claims as collateral from counterparties that are credit institutions, it might be more appropriate to instead refer to any counterparty that is eligible for central bank credit operations and thus eligible to pledge a claim to the NBB. 3.2 One specific consequence of the credit institution’s possible insolvency is that, if the NBB notifies the pledge to the debtor, the debtor can thereafter only validly make payment to the NBB. Although this is not explicitly stated in the draft law, which is a lex specialis compared to the general Belgian regime applicable to pledges, the ECB understands the draft law leaves the NBB the possibility of notifying the pledge to the debtor outside the specific situation of the credit institution’s insolvency, if the NBB wishes to have recourse to such notification for whatever reason. Such notification will then result in the debtor being deemed to be acting in bad faith because of its actual knowledge of the pledge and, hence, will ensure that only a payment to the NBB validly releases the debtor from its obligation to pay. Furthermore, irrespective of whether or not the credit institution is insolvent, the NBB will not have any repayment claim against the payee if the payee is not an entity that is entitled to consult the register (as only such entities can be deemed to be acting in bad faith; see paragraph 1 above) or an entity that has actual knowledge of the pledge, the latter possibility being less likely in practice.

text: 3.3 The ECB also understands that the prohibition in Article 6 of the draft law on set-off in the event of insolvency of the credit institution (i.e. the NBB’s pledgor) does not prevent a valid reduction or even extinction of the claim through set-off, if the conditions for such set-off have been fulfilled before the credit institution’s insolvency (see paragraph 2.4 above). 3.4 Finally, the ECB welcomes the fact that Article 6 of the draft law applies the simplified enforcement procedure laid down in Belgian law in relation to in rem collateral arrangements and loans for financial instruments, with regard to claims pledged to the NBB . The ECB notes that the application of this procedure is normally not limited to insolvency proceedings, but encompasses, for instance, attachments. In view of the benefits of such a wide scope of application in the event of enforcement of the NBB’s pledge under the draft law, the ECB suggests including this simplified enforcement procedure in a separate provision of the draft law instead of in

text: Article 6

text: , as this Article seems to limit the procedure to insolvency situations.

text: Done at Frankfurt am Main, 3 August 2006.

text: [signed]

text: The President of the ECB

text: Jean-Claude TRICHET


text: Official Gazette of the Republic of Slovenia, Nos 99/2004 and 9/2005.

title: Opinion of the European Central Bank of 10 August 2006 at the request of Banka Slovenije on a draft decision on minimum reserves (CON/2006/41)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 10 August 2006 at the request of Banka Slovenije on a draft decision on minimum reserves (

text: ) Introduction and legal basis

text: On 26 July 2006 the European Central Bank (ECB) received a request from Banka Slovenije for an opinion on a draft decision on minimum reserves (hereinafter the ‘draft decision’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and

text: Article 2(2) 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 , as the draft decision relates to an instrument of monetary policy of a non-participating Member State. 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 decision

text: The draft decision lays down a comprehensive legal regime governing persons subject to reserve requirements (i.e. banks and savings banks). Its provisions cover, inter alia, the reserve base, reserve ratios, fulfilment of reserve requirements, remuneration, the special regime in the case of mergers and divisions, and sanctions for non-compliance with reserve requirements. In comparison to the existing Decision on minimum reserves , the new elements introduced by the draft decision are the following: (i) maintenance periods are aligned with the Eurosystem’s maintenance period calendar; (ii) the reserve base is calculated on the basis of end-of-month balance sheet information reported within the framework of statistical reporting; and (iii) an allowance of EUR 100 000 is introduced for all persons subject to reserve requirements. The draft decision is intended to apply for the last three maintenance periods in 2006 before Slovenia adopts the euro, i.e. from 27 September to 31 December 2006.

text: 2. General observations

text: The ECB welcomes the draft decision as a part of the intensive preparations for adoption of the euro in Slovenia. Within the framework of monetary policy, which currently remains a competence of Banka Slovenije, the draft decision is intended to make the Slovenian minimum reserves system consistent with the Eurosystem standards that will apply after adoption of the euro. This step should help Slovenian credit institutions to become acquainted with the Eurosystem’s requirements and ensure a smooth start to compliance with the Eurosystem’s reserve requirements in January 2007. To this end, the draft decision adequately reflects the Eurosystem legal framework on minimum reserves, especially Regulation ECB/2003/9 of 12 September 2003 on the application of minimum reserves .

text: 3. Calculation of the reserve base in the last maintenance period of 2006

text: 3.1 During the consultation procedure, Banka Slovenije suggested that the draft decision should be amended so as to enable Slovenian credit institutions to deduct from their reserve bases for the maintenance period starting on 13 December 2006 any liabilities owed to Eurosystem institutions subject to minimum reserves. 3.2 The Eurosystem rule, pursuant to which liabilities owed to Eurosystem institutions that are subject to Eurosystem reserve requirements may be deducted from the reserve base, is intended to ensure that the same liabilities are not made subject twice to reserve requirements imposed by the same authority (i.e. the ECB). The ECB notes that until 1 January 2007, this justification will not apply to the Slovenian minimum reserves system, as it will still be Banka Slovenije that imposes reserve requirements on Slovenian institutions and not the ECB. Until Slovenia adopts the euro, however, the monetary policy field (including minimum reserves) falls within the competence of Banka Slovenije, and Banka Slovenije may therefore decide to include such a provision in the draft decision. To do so could facilitate a smooth integration into the full Eurosystem minimum reserves regime on 1 January 2007, as the reserve bases of Slovenian institutions subject to reserve requirements would already be calculated taking into account liabilities owed to Eurosystem institutions subject to minimum reserves.

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

text: Done at Frankfurt am Main, 10 August 2006. [signed]

text: The President of the ECB

text: Jean-Claude TRICHET