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

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 2 See Article III of the draft amendment, inserting a new

text: Article 113(1)

text: in Book 6 of the Dutch Civil Code.

text: Article 113(2)

text: in Book 6 of the Dutch Civil Code. 4 See Opinion

text: . All ECB opinions are published on EUR-Lex.

text: See, for example, paragraph 2.4 of Opinion

text: , paragraph 2.1 of Opinion

text: , paragraph 9.2.1 of Opinion

text: , paragraph 2.3 of Opinion

text: , paragraph 7.2.1 of Opinion

text: , paragraph 2.1 of Opinion

text: , paragraph 2.1 of Opinion

text: , paragraph 1.7 of Opinion

text: of the European Central Bank of 13 October 2023 on a proposal for a regulation on the legal tender of euro banknotes and coins (OJ C, C/2023/1355, 1.12.2023, ELI: http://data.europa.eu/eli/C/2023/1355/oj), paragraph 2.1 of Opinion

text: , paragraph 2.4 of Opinion

text: , paragraph 2.1 of Opinion

text: and paragraph 2.1 of Opinion

text: . 6 See, for example, paragraph 2.1 of Opinion

text: , paragraph 9.2.1 of Opinion

text: , paragraph 2.3 of Opinion

text: , paragraph 2.1 of Opinion

text: , paragraph 2.4 of Opinion

text: , paragraph 2.1 of Opinion

text: and paragraph 2.1 of Opinion

text: . 7 See paragraph 2.2 of Opinion

text: , paragraph 2.1 of Opinion

text: and paragraph 2.4 of Opinion

text: . 8 See paragraph 2.2 of Opinions

text: and

text: . 9 See ‘The Eurosystem cash strategy’, available on the ECB’s website at www.ecb.europa.eu. See also paragraph 1.7 of Opinion

text: . 10

text: Article 128(1)

text: , first and third sentences, of the Treaty and

text: Article 16

text: , first and third sentences, of the Statute of the European System of Central Banks and of the European Central Bank. 11

text: Article 11 of Council Regulation (EC) No 974/98 of 3 May 1998

text: on the introduction of the euro (OJ L 139, 11.5.1998, p. 1). 12

text: Commission Recommendation 2010/191/EU of 22 March 2010

text: on the scope and effects of legal tender of euro banknotes and coins (OJ L 83, 30.3.2010, p. 70).

text: and

text: , EU:C:2021:63, paragraphs 46 to 49. 14 See judgment of the Court of Justice of 26 January 2021, Hessischer Rundfunk,

text: and

text: , EU:C:2021:63, paragraph 45. 15 See judgment of the Court of Justice of 26 January 2021, Hessischer Rundfunk,

text: and

text: , EU:C:2021:63, paragraphs 50 to 52. 16 COM(2023) 364 final. 17 See section 3, page 4 of the explanatory memorandum of the proposed regulation on the legal tender of euro cash and the final report of ELTEG of 6 July 2022, available on the Commission’s website at www.ec.europa.eu. See also Opinion

text: . 18

text: Article 128(1)

text: , third sentence, of the Treaty and

text: on the introduction of the euro (OJ L 139, 11.5.1998, p. 1). 19 See judgment of the Court of Justice of 26 January 2021, Hessischer Rundfunk,

text: and

text: , EU:C:2021:63, paragraphs 49 and 55.

text: and

text: , EU:C:2021:63, paragraph 55. 21 See judgment of the Court of Justice of 26 January 2021, Hessischer Rundfunk,

text: and

text: , EU:C:2021:63, paragraphs 56 to 58.

text: See paragraph 1.1 of Opinion

text: and paragraph 2.9 of this Opinion. See also the judgment of the Court of Justice of 26 January 2021, Hessischer Rundfunk,

text: and

text: , EU:C:2021:63, paragraphs 45 and 51.

title: Opinion of the European Central Bank of 6 December 2024 on the obligation to accept cash payments (CON/2024/39)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 6 December 2024 on the obligation to accept cash payments (

text: ) Introduction and legal basis

text: On 21 October 2024 the European Central Bank (ECB) received a request from the Dutch Minister of Finance for an opinion on a draft amendment (hereinafter the ‘draft amendment’) to a legislative proposal regarding the law on an anti-money laundering action plan containing limitations to cash payments (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and Article 2(1), second indent, of

text: Council Decision 98/415/EC

text: , as the draft amendment relates to means of payment. In accordance with

text: Article 17.5

text: 1. Purpose of the draft amendment

text: 1.1 The draft law prohibits natural or legal persons trading in goods from receiving or making a payment in cash in an amount equal to or greater than EUR 3 000. The draft amendment provides that if a debtor is a natural person who is acting for purposes which are outside his or her business, trade or profession (hereinafter a ‘consumer’), and the respective creditor is not a natural person acting for purposes outside his or her business, trade or profession, the creditor must accept the commitment to pay a sum of money in cash up to the amount of below EUR 3 000 . 1.2 The explanatory memorandum accompanying the draft amendment (hereinafter the ‘explanatory memorandum’) argues that, although cash is legal tender, the law does not currently require individual organisations to accept it. They may refuse cash (the explanatory memorandum continues) and in fact more and more places, for instance pharmacies, cinemas and parking garages, are doing so. The explanatory memorandum explains that the rationale behind the draft amendment is to respond to the declining use of cash in Dutch society. Several vulnerable groups in society, including refugees and senior citizens, still use cash on a regular basis, sometimes out of necessity. It is also stated that 2.6 million Dutch people aged 18 and older struggle with the digital payment world. Furthermore, according to the explanatory memorandum, broad acceptance of cash is necessary to create a resilient infrastructure for payments that can withstand events such as disruptions to digital payment infrastructures. It is argued that when such disruptions occur, people divert to alternatives

text: but that not everyone can quickly move to other regions not affected by the disruption or postpone certain purchases for a longer period of time. 1.3 The draft amendment embeds the obligation to accept cash payments in Book 6 of the Dutch Civil Code, which covers contract law. 1.4 The draft amendment provides that the Dutch legislator may lay down exceptions to the obligation to accept cash payments via an order in council if this is necessary due to reasons of safety or the specific nature of the relevant activities . The explanatory memorandum gives as a specific example unmanned petrol stations, where it may be undesirable, on grounds both of feasibility and of safety, to impose an obligation to accept cash to fulfil payment obligations.

text: 2. General observations

text: 2.1 The ECB has previously adopted an opinion on the draft law, of which the draft amendment forms part . 2.2 The ECB understands that the draft amendment effectively establishes that professional parties, regardless of whether they are publicly or privately owned, must accept cash for payment from consumers to fulfil contractual payment obligations of a value below EUR 3 000. The draft amendment does not impose any obligations in relation to the fulfilment of contractual pecuniary obligations on consumers. Hence, the draft amendment covers what are hereinafter referred to as business-to-consumer transactions. 2.3 The obligation to accept cash included in the draft amendment does not apply to payments equal to or greater than EUR 3 000. This is due to the fact that the draft law also introduces a general cash restriction for payments equal to or greater than EUR 3 000 based on anti-money laundering considerations. 2.4 The ECB understands that under Dutch law parties are in principle free to deviate from Book 6 of the Dutch Civil Code in the exercise of their freedom of contract, unless a mandatory rule set out in Book 6 of the Dutch Civil Code applies. Since the draft amendment only gives the option to deviate from the obligation to accept cash payments on the basis of an order in council, the ECB understands that the obligation embedded in the draft amendment is such a mandatory rule and cannot be overridden by way of a contractual agreement. 2.5 Although electronic payment instruments are increasingly used for retail payments in a number of Member States, cash continues to play an important role in society and is still widely used throughout the entire population. The ability to pay in cash remains particularly important for those who, for various legitimate reasons, prefer to use physical money for payments rather than other payment instruments, or do not have access to the banking system and electronic means of payment. These groups include not only elderly people but also people with disabilities, immigrants, socially

text: vulnerable people, minors and others with limited or no access to digital payment services . Cash is generally also useful as a payment instrument because it is widely accepted, fast and facilitates control over the payer’s spending. Moreover, it is currently the only payment instrument that allows everyone to settle a payment transaction in central bank money, which is also settled instantly while, importantly, ensuring privacy. Furthermore, cash could play an important role in the event of a 6 7 disturbance in the payment system and it is robust against cyber-crime . Cash also has an important function as a store of value. The availability and accessibility of cash and its fallback function in case of disruptions to electronic payment systems contribute to trust in the financial system, which is important for the smooth functioning of monetary policy . 2.6 The ECB is, thus, fully committed to ensuring that euro cash remains accepted in payments throughout the euro area, in line with the Eurosystem’s cash strategy . Against this backdrop, the ECB welcomes the draft amendment, which will clarify and strengthen the obligation to accept cash as a means of payment in business-to-consumer transactions in the Netherlands. 2.7 The ECB has the exclusive right to authorise the issue of euro banknotes within the Union, and the euro banknotes issued by the ECB and the national central banks of the euro area are the only banknotes with legal tender status within the euro area . The legal tender status of euro coins is provided for in secondary Union law . 2.8 The concept of ‘legal tender’ as a means of payment denominated in a currency unit has been considered by the Court of Justice of the European Union. In particular, the Court of Justice has clarified that the concept of ‘legal tender’ signifies that this specific means of payment cannot generally be refused in settlement of a debt denominated in the same currency unit, at its full face value, with the effect of discharging the debt. In clarifying the concept of ‘legal tender’ under Union law, the Court of Justice took into consideration

text: Commission Recommendation 2010/191/EU

text: , which provides useful guidance for the interpretation of the relevant provisions of Union law. Point 1 of Recommendation

text: states that, where a payment obligation exists, the legal tender of euro banknotes and coins should imply (a) mandatory acceptance of those banknotes and coins; (b) their acceptance at full face value; and (c) their power to discharge from payment obligations.

text: According to the Court of Justice, this shows that the concept of ‘legal tender’ encompasses, inter alia, an obligation in principle to accept banknotes and coins denominated in euro for payment purposes . 2.9 The Court of Justice has clarified that the concept of ‘legal tender’ is a concept of Union law that must be given an autonomous and uniform interpretation throughout the Union . It has also established that Article 133 of the Treaty empowers the Union legislature alone to specify the legal rules governing the status of legal tender accorded to banknotes and coins denominated in euro, insofar as that is necessary for the use of the euro as the single currency. Furthermore, the Union legislature’s exclusive competence precludes any competence on the part of the Member States in the matter, unless they have been empowered by the Union to do so or for the implementation of Union acts . In this respect, the ECB notes that, on 28 June 2023, the Commission published a proposal for a Regulation of the European Parliament and of the Council on the legal tender of euro banknotes and coins (hereinafter the ‘proposed regulation on the legal tender of euro cash’), which will establish rules on the legal tender of euro banknotes and coins in binding Union secondary law The explanatory memorandum to the proposed regulation on the legal tender of euro cash states that discussions within the Euro Legal Tender Expert Group (ELTEG) confirmed the existence of legal uncertainty regarding the legal tender of euro cash and differing application of its principles in the euro area . These differences would justify establishing rules on the legal tender of euro cash in a regulation adopted under Article 133 of the Treaty.

text: 3. Specific observations

text: 3.1 The ECB has three specific observations on the obligation to accept cash included in the draft amendment. First, the ECB recalls that the Court of Justice has recognised that the legal tender status of euro banknotes and coins, as enshrined in primary and secondary Union law, respectively , entails a fundamental obligation, in principle, to accept those banknotes and coins . This obligation guarantees, as the other side of the same coin, that every debtor has the possibility, as a general rule, to discharge a payment obligation in euro cash. Thus, the ECB considers the sentence from the explanatory memorandum that states that, although cash is legal tender, the law does not currently require individual organisations to accept it, as incorrect. The obligation to accept cash embedded in the draft amendment will clarify and strengthen the mandatory acceptance of cash, which is a key

text: element of the legal tender status of euro banknotes and coins enshrined in Union law, in the context of business-to-consumer transactions. It will not create ex novo an obligation to accept cash. 3.2 Second, it must be considered whether the obligation to accept cash included in the draft amendment establishes legal rules governing the status of legal tender of euro banknotes and coins, which an area of exclusive competence of the Union under Article 133 of the Treaty, or whether it is a measure taken in the exercise of a competence of the Member States. 3.3 In this respect the ECB notes that the Court of Justice has held that the status of banknotes denominated in euro as legal tender calls only for acceptance in principle of such banknotes as a means of payment, not for absolute acceptance . The Court of Justice held that the Union’s exclusive competence in matters of monetary policy is without prejudice to the competence of the Member States whose currency is the euro, in the exercise of their own powers, to regulate the procedures for settling pecuniary obligations, whether under public law or private law, provided, in particular, that the legislation does not affect the principle that, as a general rule, it must be possible to discharge a payment obligation in cash. This also includes that Member States may introduce stricter rules, which will strengthen the mandatory acceptance of euro cash in their territory, in the exercise of their own powers, such as the organisation of their public administration or in the field of consumer protection. The Court of Justice has also held that one must assess the objective and content of a national law measure that provides for an obligation to accept euro cash to determine whether that measure has been adopted within the framework of the Member States’ own competences . 3.4 The draft amendment’s obligation to accept cash is limited to business-to-consumer transactions. It does not extend to cases in which the debtor of the pecuniary debt is not a consumer (e.g. businessto-business transactions) or where both the creditor and the debtor are consumers (i.e. consumerto-consumer transactions). According to the explanatory memorandum, the obligation for professional parties to accept cash from consumers will protect people who struggle with the digital payment world in general, and vulnerable groups in society in particular, from further decline in levels of cash acceptance by individual organisations such as pharmacies and parking garages. The explanatory memorandum also explains that cash acceptance provides citizens with a valuable alternative in the event of disruptions to digital payment infrastructures because they do not then have to move to other regions not affected by the disruption or postpone certain purchases for a longer period of time when such disruptions occur. Furthermore, the draft amendment embeds the obligation to accept cash payments in title 1, chapter 11 of Book 6 of the Dutch Civil Code, which covers Dutch contract law. Book 6 of the Dutch Civil Code includes several provisions intended to protect consumers when entering into contracts with professional parties. For instance, Articles

text: and

text: in title 5, chapter 2B of Book 6 of the Dutch Civil Code contain a list of contractual terms which are deemed or presumed to be unreasonable for consumers. The ECB therefore understands that the draft amendment’s obligation to accept cash is intended as a national measure which regulates the procedures for settling pecuniary obligations in the exercise of national powers,

text: particularly in the field of consumer protection. It does not seem to establish legal rules governing the status of legal tender of euro banknotes and coins. 3.5 Third, the ECB notes that the obligation to accept cash embedded in the draft law may contribute to ensuring that consumers purchasing goods or services in the Netherlands are not denied the possibility to pay in cash. Yet it will not resolve the legal uncertainty regarding the concept of legal tender of euro banknotes and coins at Union level. In this respect, the ECB stresses that it strongly supports the establishment of rules on the legal tender status of euro banknotes and coins throughout the euro area in secondary Union law. Only such rules can promote the necessary legal certainty regarding the concept of legal tender in Union law and ensure that this concept is given an autonomous and uniform interpretation throughout the Union .

text: This opinion will be published on EUR-Lex.

text: Done at Frankfurt am Main, 6 December 2024.

text: [signed]

text: The President of the ECB

text: Christine LAGARDE


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

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 3 Available on the ECB’s website at www.ecb.europa.eu. 4 Articles 1(3) of the draft ordinance.

text: Article 2(1)

text: , point (1), of the draft ordinance. 8 Calculated in accordance with the requirements of

text: Regulation (EU) No 575/2013

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

text: Regulation (EU) No 648/2012

text: (OJ L 176, 27.6.2013, p. 1). 9 See

text: Article 92(1)

text: , points (a) to (d), of

text: Regulation (EU) No 575/2013

text: . 10 Article 3 of the draft ordinance. 11 Article 4 of the draft ordinance.

text: See paragraph 1.2 of the ELA Agreement. See also paragraph 2.1 of Opinion

text: . All ECB opinions are published on EUR-Lex. 18 With respect to the possibility to extend the provision of ELA to entities that are not credit institutions, see paragraph 2.3 of Opinion

text: . 19 See Section 3.5 of the ELA Agreement. 20 See Section 8.1 of the ELA Agreement.

publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 16 December 2024 on the provision of emergency liquidity assistance (CON/2024/40)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 16 December 2024 on the provision of emergency liquidity assistance (

text: ) Introduction and legal basis

type: rubrik

text: On 4 November 2024 the European Central Bank (ECB) received a request from Българска народна банк (Bulgarian National Bank (BNB)) for an opinion on an ordinance of the Bulgarian National Bank on the provision of emergency liquidity assistance (hereinafter the ‘draft ordinance’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and Article 2(1), third and sixth indents, of

text: Council Decision 98/415/EC

text: , as the draft ordinance relates to BNB and rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets. In accordance with

text: Article 17.5

text: , first sentence, 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 ordinance

text: 1.1 The draft ordinance aims to implement Article 48 of the Law on Bulgarian National Bank (hereinafter the ‘Law on BNB’) and to regulate the conditions, rules and procedures under which BNB, in its future capacity as a Eurosystem central bank and outside the scope of Eurosystem monetary policy operations, may provide emergency liquidity assistance (ELA) to a credit institution experiencing liquidity stress . 1.2 The draft ordinance provides that BNB may provide ELA in compliance with the Treaty, the Law on BNB, the Agreement on emergency liquidity assistance (hereinafter the ‘ELA Agreement’) adopted by the Governing Council on 27 September 2024 on the basis of Article 14.4 of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’), and other applicable acts of the ECB . The draft ordinance explicitly clarifies that BNB may provide ELA at its discretion . 1.3 The draft ordinance provides that BNB may provide ELA only in euro .

text: 1.4 The draft ordinance provides that BNB may grant ELA only to a solvent credit institution that experiences liquidity stress for which it cannot quickly provide liquidity from other sources . For this purpose, a credit institution is to be considered solvent if its Common Equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio, as well as the leverage ratio on an individual and (when applicable) consolidated basis, are in line with the minimum capital requirement levels laid down in

text: Regulation (EU) No 575/2013

text: . Furthermore, a credit institution is to be considered solvent where this requirement is not met but there is a strong likelihood of recapitalisation that would restore the regulatory capital to the specified levels within 24 weeks after the end of the quarter for which the data shows that the credit institution does not comply with the relevant requirements. In duly justified exceptional cases, BNB may request the Governing Council to extend the abovementioned 24-week period . 1.5 The draft ordinance specifies that ELA will be granted in exchange for collateral and contains detailed rules concerning such collateral . The draft ordinance provides that if ELA is not reimbursed by a credit institution within the agreed period, BNB must proceed with compulsory collection, without initiating legal proceedings, selling the received collateral or acquiring the ownership rights in respect of assets pledged by the recipient bank, up to an amount that satisfies all BNB’s claims arising from the ELA granted . 1.6 The draft ordinance provides that ELA may be granted for a term of up to six months and if necessary up to 12 months , but also provides that under certain conditions this term may be extended beyond 12 months . 1.7 The draft ordinance provides that BNB is to establish an interest rate for the ELA granted that cannot be lower than the Eurosystem’s marginal lending facility rate, increased by 100 basis points. In the case of intra-day ELA reverse transactions, BNB is to establish an interest rate that cannot be lower than 1 % on an annual basis . 1.8 The draft ordinance contains detailed provisions governing the procedure for the granting of ELA to a credit institution and the information to be provided by the credit institution to BNB and the ECB when ELA is granted .

text: 2. General observations

text: 2.1 The provision of ELA refers to the provision by a Eurosystem national central bank (NCB) of central bank money and/or any assistance that may lead to an increase in the provision of central bank money to a solvent financial institution or a group of solvent financial institutions facing temporary liquidity problems, where this operation is not part of the single monetary policy . 2.2 The ELA Agreement is based on the understanding that the main responsibility for the provision of ELA lies with the NCB concerned. This means that any costs and risks arising from the provision of ELA are incurred by the relevant NCB. However, pursuant to Article 14.4 of the Statute of the ESCB, the Governing Council may object to the provision of ELA by limiting or prohibiting ELA operations if it finds that these interfere with the objectives and tasks of the ESCB. As the Governing Council must be informed of such operations in a timely manner in order for it to adequately assess such interference, the ELA Agreement imposes corresponding obligations on NCBs. As the ELA Agreement was adopted by the Governing Council on the basis of Article 14.4 of the Statute of the ESCB, it applies to BNB upon the latter’s accession to the Eurosystem.

text: 3. Specific observations

text: 3.1 As noted in paragraph 2.1 of this opinion, the ELA Agreement contemplates the possibility that ELA may be granted to a financial institution or a group of financial institutions facing liquidity problems . The ECB understands that the limitation under the draft ordinance whereby ELA may only be extended to credit institutions stems from Article 48 of the Law on BNB, under which the draft ordinance is to be adopted. 3.2 The ELA Agreement also contemplates the possibility that an NCB might enter into a liquidity arrangement with a non-Eurosystem central bank or monetary authority with the purpose of facilitating the provision of emergency foreign currency liquidity . However, the ECB notes that the draft ordinance does not include a provision covering this possibility. 3.3 The draft ordinance contains several provisions on the collateralisation of ELA, including a reference to ‘collateral principles approved by the ECB’s GC’. In contrast to Eurosystem monetary policy operations, the ECB has not set out any publicly available collateral principles for ELA other than the condition that ELA collateral should sufficiently protect the NCB against risks emerging from ELA operations . 3.4 The ECB welcomes the provision in the draft ordinance that if ELA is not reimbursed by the institution within the agreed period, BNB is to proceed with compulsory collection, without initiating legal proceedings, selling the received collateral or acquiring the ownership rights in respect of assets pledged by the recipient bank, up to an amount that satisfies all BNB’s claims arising from the ELA

text: granted . This should facilitate BNB’s enforcement of its collateral rights against defaulting counterparties in the event that ELA is provided. This opinion will be published on EUR-Lex. Done at Frankfurt am Main, 16 December 2024. [signed]

text: The President of the ECB

text: Christine LAGARDE

type: vagledning

utgivare: ecb


text: Council Directive (EU) 2022/2523 of 14 December 2022

text: on ensuring a global minimum level of taxation for multinational enterprise groups and large-scale domestic groups in the Union (OJ L 328, 22.12.2022, p. 1).

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

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

text: See Opinion

text: . All ECB opinions are published on EUR-Lex.

text: See Opinions

text: and

text: See paragraph 1.1 of Opinion

text: See paragraph 2.2 of Opinion

text: and paragraph 2.2 of Opinion

text: See paragraph 3.4 of Opinion

text: and paragraph 3.4 of Opinion

text: See Opinions

text: and

text: See paragraph 3.2.2 of Opinion

text: , paragraph 2.1 of Opinion

text: , paragraph 3.1 of Opinion

text: , paragraph 3.1 of Opinion

text: and paragraph 4.1 of Opinion

text: See paragraph 3.4 of Opinion

text: , paragraph 3.7 of Opinion

text: and paragraph 4.6 of Opinion

title: Opinion of the European Central Bank of 17 December 2024 on a tax on the net interest and commission income of certain financial institutions (CON/2024/41)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 17 December 2024 on a tax on the net interest and commission income of certain financial institutions (

text: ) Introduction and legal basis

text: On 28 November 2024 the European Central Bank (ECB) received a request from the Banco de España, on behalf of the Spanish Parliament, for an opinion on a draft law establishing a tax on net interest and commission income of certain financial entities (hereinafter the ‘draft law’). This draft law is part of a comprehensive draft law on a complementary tax to guarantee a minimum overall level of taxation for multinational groups and large-scale national groups, implementing into Spanish law Council Directive 2022/2523 , a tax on the net interest and commission income of certain financial entities and a tax on liquids for electronic cigarettes and other tobacco-related products and other amendment of tax rules. The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and Article 2(1), sixth indent, of

text: Council Decision 98/415/EC

text: , as the draft law concerns the rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets, and the ECB’s tasks concerning the prudential supervision of credit institutions pursuant to Article 127(6) of the Treaty. In accordance with

text: Article 17.5

text: 1. Purpose of the draft law

text: 1.1 The draft law establishes a direct tax on the net interest and commission income obtained by credit institutions established in Spain, by specialised lending institutions, and by branches of foreign credit institutions established on Spanish territory (hereinafter ‘financial institutions’) arising from their activity in Spain. The taxable base of the tax is the positive margin of interest and fees income obtained in Spain after offsetting interest and commission expenses, and hence excludes those attributable to branches located abroad. The liquid base of the tax is the result of reducing the taxable base by EUR 100 million. 1.2 The draft law establishes a scale of five specific tax rates that are to be applied to the liquid base in order to obtain the gross tax charge: a tax rate of 1 % will be applied to a positive liquid base up to EUR 750 million; a tax rate of 3,5 % will be applied to the portion of the liquid base from EUR

text: 750 million up to EUR 1500 million; a tax rate of 4,8 % will be applied to the portion of the liquid base from EUR 1500 million up to EUR 3000 million; a tax rate of 6 % will be applied to the portion of the liquid base from EUR 3000 million up to EUR 5000 million; and a tax rate of 7 % will be applied to the portion of the liquid base from EUR 5000 million upwards. 1.3 The gross tax charge is to be reduced by the amount resulting from applying 25 % of the liquid amount of the corporate tax that the financial institution is to pay in that same tax period, or the nonresident income tax in the case of branches of foreign credit institutions, in order to obtain the liquid amount of the tax payable by the financial institution. 1.4 Financial institutions are entitled to make an extraordinary deduction of the liquid amount of the tax in accordance with a formula established in the draft law if their return on assets (ROA) – calculated by dividing the net income of the financial institution without including the expenses from the payment of the proposed tax by the total assets of the financial institution – is less than 0,7 %. 1.5 Financial institutions must make a split payment equal to 40 % of the liquid amount of the tax (or of the liquid amount of the tax after the ROA-related extraordinary deduction) within the first 20 calendar days of the second month following the end of the tax period. The addressees must pay the rest of the tax liability within the first 20 days of the ninth month following the end of the tax period. The proceeds from the tax are to be paid to the State Treasury. 1.6 The tax period will coincide with the fiscal year of the financial institution and the tax is legally accrued the first day after the expiration of the fiscal year. Nevertheless, the tax period may end earlier, when a financial institution or a foreign branch ceases to operate as such. The tax will be applicable for the first three consecutive tax periods beginning on 1 January in 2024, 2025 and 2026, respectively. This means that the tax base is to be calculated based on the amounts recognised during 2024, 2025 and 2026, respectively, but that financial institutions are legally bound to pay in 2025, 2026 and 2027, respectively.

text: 2. General observations

text: 2.1 The ECB adopted an opinion in 2022 on a draft Spanish law on the imposition of temporary levies on operators in the energy sector, credit institutions and by specialised lending institutions . Thereafter the ECB has adopted a series of opinions addressed to other Member States on draft laws introducing special, temporary or permanent taxes, levies, fees or solidarity contributions applicable to banks and/or financial institutions . In these opinions, the ECB considered legislative initiatives introducing such taxes, levies, fees or contributions from the monetary policy, financial stability and prudential supervision perspectives. 2.2 Unlike the draft Spanish law on the imposition of temporary levies on operators in the energy sector, credit institutions and by specialised lending institutions , the explanatory memorandum accompanying the draft law does not contain specific explanations on the rationale for the tax on the net interest and commission income of certain financial institutions.

text: 3. Monetary policy context

text: 3.1 The euro area inflation rate reached record levels over the course of 2022 and posed significant challenges for the conduct of monetary policy. Guided by its primary objective of maintaining price stability, the ECB has taken determined action to ensure a timely return of inflation to the 2 % target over the medium term. Key ECB policy rates were raised by a cumulative 450 basis points between July 2022 and September 2023, with the intention of dampening demand and guarding against the risk of a persistent upward shift in inflation expectations. Following a period of rate stabilisation, key interest rates have now been reduced in view of the ongoing disinflationary process. 3.2 Credit institutions play a special role in ensuring the smooth transmission of monetary policy measures to the wider economy, and thus in respect of the impact of monetary policy on aggregate demand and ultimately on inflation rates. The ECB's observations as to the impact of the draft law on monetary policy are set out below. 3.3 It is important to keep in mind that monetary policy decisions always have some distributional implications. Changes in monetary policy have effects on incomes and on the profitability of credit institutions. In this context, maintaining an adequate capital position helps credit institutions to avoid abrupt adjustments in their supply of credit to the real economy . 3.4 Credit institutions’ net interest income tends to increase on impact as policy rates increase. Obviously, this effect occurs at a faster pace the greater the weight of short-term or variable interest rate loans within the balance sheets of credit institutions. At the same time, however, the tightening cycle also typically results in lower lending volumes, higher costs of funding, eventual losses recorded in the securities portfolio and an increase in provisions owing to a potential deterioration of the quality of banks’ credit portfolio. The realisation of downside risks in that environment may significantly reduce the repayment capacity of debtors and translate into lower profitability of credit institutions. The net effect of tighter monetary policy on bank profitability may therefore be less positive, or even negative, over a longer time horizon . 3.5 ECB interest rate reductions will generally affect bank profit and balance sheet items with signs opposite to those discussed in paragraph 3.4 in respect of monetary tightening. The net effects on bank profitability of these reductions can also be positive or negative over different horizons of the easing cycle and vary as a function of the financial situation of the banking sector and macrofinancial conditions. 3.6 While credit institutions’ net interest income currently remains robust, and the latest reductions in past and expected key ECB interest rates have led to its stabilisation, care should be taken to ensure that any measures adopted do not hamper the ability of credit institutions to maintain solid capital bases and adequate provisions for impairments and ultimately transmit monetary policy decisions to firms and households.

text: 4. Financial stability context

text: 4.1 As indicated above, the ECB has previously opined on draft legislation introducing levies or taxes applicable to credit institutions in several Member States . It has recommended that a clear separation is necessary between the extraordinary account created out of tax proceeds and the general budgetary resources of a government to avoid their use for general fiscal consolidation purposes. The ECB has also underscored that imposing a special tax on the banking sector could reduce credit institutions’ ability to build additional capital buffers, as such measures reduce retained earnings, thereby weakening the banking sector’s resilience to economic shocks. It is recognised, however, that concerns regarding the resilience of the banking sector could be partially alleviated by introducing or strengthening capital buffers. In parallel, these taxes could have adverse economic effects by limiting credit institutions’ ability to provide credit, and potentially contributing to less favourable terms for customers on loans and other services . Maintaining a sound capital base is essential for credit institutions to fulfil their role as credit intermediaries within the economy. 4.2 As noted in paragraph 3.4, credit institutions may initially receive higher net interest income as interest rates increase but increasing interest rates can also contribute to a higher cost of funding and eventual losses on outstanding bank securities portfolios. Moreover, in a long-term perspective, higher interest rates may negatively impact borrowers’ financial situations, thereby increasing credit risk and reducing bank profitability. When it comes to the draft law, the ECB notes, as set out in paragraph 1.4, that due to the extraordinary deduction mechanism based on financial institutions’ profitability, financial institutions would not be affected by the tax if they record net losses. If profits are positive but lower than the 0,7 % ROA threshold, the extraordinary deduction decreases as financial institutions’ profitability increases towards the prescribed ROA threshold. In these circumstances, the tax would still negatively affect the capacity of financial institutions to maintain a solid capital position or to rebuild buffers. Moreover, in periods of high profitability, the deduction would not operate, and thus the tax would limit the capacity to accumulate buffers against future negative shocks. 4.3 Due to the heterogeneous nature of such taxes in relation to the banking sector, the tax, similarly to other taxes of this kind across the Union, may lead to fragmentation in the European financial system and impair the level playing field across the banking union. Furthermore, the application of a progressive scale may give rise to competitive asymmetries based on bank size. 4.4 In the light of the above, and given that the draft law will apply over the next three years, the ECB reiterates the need for continued monitoring of its implications from a financial stability perspective, particularly regarding the potential long-term adverse effects on the resilience of the banking sector and the possibility of market distortions. As noted in previous opinions , the ECB recommends a thorough analysis detailing the specific impact of the tax on credit institutions’ longer-term profitability and capital base, access to funding, potential impact on liquidity, the provision of new lending and

text: competition conditions in the market.

text: 5. Considerations relating to the prudential supervision of credit institutions

text: 5.1 The ECB understands that the tax would, as a practical matter, mostly apply to credit institutions directly supervised by the ECB within the framework of the Single Supervisory Mechanism. 5.2 Despite the extraordinary deduction on the amount of the liquid amount of the tax (based on net profitability), the basis on which the tax would be established does not take into consideration the full business cycle and does not include, inter alia, operational expenses and the cost of credit risk. As a result, the amount of the tax may not be fully commensurate with the profitability of a credit institution and its capital generation capacity. As a result of the general application of the tax, credit institutions that have lower solvency positions or challenging capital projections could become less able to absorb the potential downside risks of an economic downturn. This latter risk is further exacerbated by the progressive character of the applicable tax rate as the liquid base increases. This could lead to a situation where certain credit institutions with lower net profitability (or even a loss following the deduction of credit losses) end up paying tax at a higher effective rate, since the implicit assumption in the tax calculation that credit institutions with a higher liquid base have higher net profits is not necessarily always true. 5.3 The ECB understands that the draft law leads to the recognition of the expenses resulting from the tax in 2024 eroding the profitability and market profile of the relevant credit institutions, assuming the temporary levy on credit institutions’ windfall profits is also recorded in 2024. The ECB recommends analysing the accounting effects of the tax in order to avoid unintended consequences for credit institutions’ solvency and competitive positions.

text: This opinion will be published on EUR-Lex.

text: Done at Frankfurt am Main, 17 December 2024.

text: [signed]

text: The President of the ECB

text: Christine LAGARDE


title: Opinion of the European Central Bank of 30 December 2024 on oversight of payment systems (CON/2024/42)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 30 December 2024 on oversight of payment systems (

text: ) Introduction and legal basis

text: On 27 September 2024, the European Central Bank (ECB) received a request from the Banco de Portugal (BdP) for an opinion on a draft notice and a draft instruction on oversight of payment systems (hereinafter together referred to as the ‘draft regulations’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and Article 2(1), third and fifth indents, of

text: Council Decision 98/415/EC

text: , as the draft regulations relate to the BdP and to payment and settlement systems. In accordance with

text: Article 17.5

text: , first sentence, of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft regulations

text: 1.1 According to the Organic Law of the Banco de Portugal and the Legal Framework of Credit Institutions and Financial Companies , one of the tasks of the BdP is to regulate, oversee and promote the smooth operation of payment systems, within the scope of its participation in the European System of Central Banks (ESCB). The Legal Framework of Credit Institutions and Financial Companies further provides that entities carrying out any activity within the scope of payment systems must inform the BdP that they are carrying out such activity and provide to the BdP all the information that it may request . 1.2 The draft regulations are the first regulations issued by the BdP based on the above legal provisions. They aim at providing a more robust legal framework for the function of overseeing payment systems in Portugal by defining the obligations of certain entities that carry out activities within the scope of such systems. As mentioned in the explanatory memorandum accompanying the draft notice, it is intended to strengthen the conditions under which the BdP exercises its oversight function, as it was considered necessary to adopt regulatory instruments to establish a legal framework at national level that more clearly specifies the information, notification and/or communication obligations that such

text: 2 Lei Orgânica do Banco de Portugal, aprovada pela Lei n.º 5/98, de 31 de Janeiro. See

text: Article 14

text: 3 Regime Geral das Instituições de Crédito e Sociedades Financeiras – RGICSF, aprovado pelo Decreto-Lei n.º 298/92, de 31 de Dezembro. See

text: Article 92(1)

text: , subparagraph (a).

text: 4 See

text: Article 117

text: -B of the Legal Framework of Credit Institutions and Financial Companies. entities must comply with. Thus, the draft regulations seek to increase the transparency of these obligations while creating a legally binding framework at national level for such entities. 1.3 Scope of the draft regulations The draft regulations define the entities that fall within their scope and are not currently covered by other prudential, macroprudential, or conduct-monitoring measures issued by the BdP with the very same purpose. These entities are, in particular, specified as those that (1) operate or process retail payment systems; (2) hold payment instrument schemes or payment instrument arrangements; or (3) provide cash withdrawal services through automated teller machines (ATMs) (hereinafter the ‘specified entities’) . 1.4 General reporting obligations The draft regulations establish reporting obligations under which all of the specified entities that carry out their activity in Portugal will be obliged to notify the BdP of the commencement, modification and termination of their activity . In particular, the draft regulations specify the information to be communicated by those entities at each of these stages . The draft regulations provide that an activity is considered to be carried out in Portugal whenever the services provided under such activity are made available to payment services users and/or providers established in Portugal . Therefore, entities that carry out their activity in Portugal, but which are not established in Portugal, will be subject to such reporting obligations. However, the remaining obligations discussed in paragraphs 1.5 to 1.7 will not be applicable to such entities, since these are only applicable to entities that are established in Portugal and which carry out their activities in the context of payment systems. 1.5 Assessment actions The draft regulations envisage that, in its oversight function in the context of the ESCB, the BdP undertakes assessment actions in respect of entities established in Portugal which carry out their activities in the field of payment systems . These assessments are performed on the basis of existing Eurosystem frameworks and guidance. In this context, these entities are obliged to provide certain information to the BdP . It is expressly clarified that these assessment actions are carried out without prejudice to the possibility of the BdP requesting additional information or carrying out other assessment actions in compliance with the applicable framework laid down by the ESCB . The draft regulations further clarify that all of the specified entities that are established in Portugal must provide the BdP with any information it deems necessary to enable it to monitor their activities in the context of the performance of its oversight function. The draft regulations also contain various provisions of a procedural nature related to assessments and other oversight actions of the BdP which may give rise to the issuance of recommendations and observations by the BdP .

text: 5 See Articles 1 and 2 of the draft notice.

text: 8 See

text: Articles 3

text: to 5 of the draft notice.

text: 10 See Article 8 of the draft notice.

text: 11 See points 2 to 6 of the draft instruction.

text: 13 See points 7 to 10 of the draft instruction. 1.6 Reporting of major incidents The draft regulations provide that entities established in Portugal which (1) operate or process retail payment systems or (2) hold payment instrument schemes or payment instrument arrangements must report to the BdP all major incidents that may affect their activity and may have an operational or security-related nature . For this purpose, major incidents are defined as consisting of one or a series of connected unforeseen events which have or may have an adverse impact on the integrity, availability, confidentiality, authenticity and/or continuity of payment-related services . These entities will be obliged to provide certain information to allow the BdP to assess the incident in question. 1.7 Reporting of statistical information The draft regulations provide that entities established in Portugal which (1) operate or process retail payment systems or (2) provide cash withdrawal services through ATMs must report to the BdP statistical information on their operations and payment services . The specific statistical information to be sent by these entities is already established in a previous regulation issued by the BdP .

text: 2 General observations

text: 2.1 Pursuant to

text: Article 127(2)

text: , fourth indent, of the Treaty, as mirrored in

text: Article 3.1

text: , fourth indent, of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’), the Eurosystem has the task of promoting the smooth operation of payment systems. Article 22 of the Statute of the ESCB furthers the performance of this task. Based on the foregoing, the ECB and the national central banks (NCBs) should use the powers available to them to promote the smooth operation of clearing and payment systems. Oversight responsibilities are, inter alia, key to this basic task . 2.2 The ECB emphasises that the draft regulations are based on the relevant provisions of the Organic Law of the Banco de Portugal , which states that it is the BdP’s responsibility to regulate, oversee and promote the proper functioning of payment systems, specifically in the context of its participation in the ESCB. 2.3 The ECB welcomes that the explanatory memoranda accompanying the draft regulations expressly indicate that the draft regulations must not hinder the oversight to be performed by other central banks within the ESCB, including the ECB, over entities that carry out their activities in the field of payment systems . Subject to the specific observations set out below, the ECB further welcomes that the draft regulations are based on existing Eurosystem oversight frameworks and guidance,

text: 16 See point 12 of the draft instruction.

text: 18 See Instruction No 19/2012.

text: 19 See Section 3.1 of the Eurosystem oversight policy framework, revised version (July 2016), available on the ECB’s website at www.ecb.europa.eu. See also paragraph 2.2 of Opinion

text: 20 See Article 14 of the Organic Law of the Banco de Portugal, approved by Law No 5/98 of 31 January.

text: 21 See page 2 of the explanatory memorandum accompanying the draft notice. where available, and that the intention of the draft regulations is not to overlap with other applicable ESCB frameworks. The ECB also welcomes that the draft regulations cover the collection of information required for the exercise of the BdP’s oversight tasks in the context of these frameworks. 2.4 Based on the above, the ECB understands that the draft regulations are without prejudice to the principles and rules set out under any existing or future Eurosystem framework and/or ECB regulations potentially applicable to entities established in Portugal, including in the event that these entities become of pan-European relevance in accordance with the applicable Eurosystem frameworks and/or regulations. In the same vein, the ECB notes that the draft regulations are to be adopted by the BdP without prejudice to the general regulatory power of the ECB under Article 22 of the Statute of the ESCB. In the exercise of such power, the ECB may in the future adopt new regulations which would be applicable to the entities that fall under the Eurosystem frameworks referred to in the draft regulations. In such a case, the ECB regulations would prevail over national regulations. 2.5 The above observations are in line with the Eurosystem oversight policy framework, which describes the role of the Eurosystem in the field of oversight. They are also in line with the respective applicable Eurosystem frameworks, i.e. the Eurosystem revised oversight framework for retail payment systems (hereinafter the ‘RPS framework’) and the Eurosystem oversight framework for electronic payment instruments, schemes and arrangements (hereinafter the ‘PISA framework’). Pursuant to the Eurosystem’s policies, for the purpose of overseeing individual payment systems, schemes and arrangements, the Eurosystem assigns primary oversight responsibility to the central bank that is best placed to fulfil this function, either by virtue of its proximity to the overseen entity (e.g. where the system is legally incorporated in its jurisdiction) or by virtue of national laws that attribute specific oversight responsibilities to the central bank concerned, subject to any Treaty-based requirements. This is typically the case for systems and entities with a clear national anchor, i.e. being legally incorporated in a jurisdiction or serving that particular national market , such as the payment systems and entities intended to be covered by the draft regulations . When there is no national anchor, the body entrusted with primary oversight responsibility is the NCB of the country where a system, scheme or arrangement is legally incorporated, unless the Governing Council decides otherwise and assigns the primary oversight responsibilities to the ECB. 2.6 Under the draft regulations, the BdP’s assessment of retail payment systems will be based on the RPS framework as well as the Eurosystem’s Cyber Resilience Oversight Expectations (CROE) and the BdP’s assessment of the obliged entities responsible for the functioning of payment schemes and arrangements will be based on the PISA framework. The ECB welcomes the draft regulations, which provide a more robust legal basis for the BdP’s tasks relating to the oversight of these entities, thereby strengthening its oversight function . Transitioning from a national framework based on soft law instruments and recommendations to a legally binding framework will facilitate the addressing of compliance issues by entities carrying out payment system-related activities. The ECB also

text: 22 See Section 5.2 of the Eurosystem oversight policy framework, revised version (July 2016).

text: 23 See paragraph 2.3 of Opinion

text: 24 See point 3 of the draft instruction.

text: 25 See, for example, paragraph 2.1 of Opinion

text: , paragraph 2.3 of Opinion

text: and paragraph 2.1 of Opinion

text: . welcomes the BdP’s intention to reinforce and clarify its role as overseer of payment systems and payment schemes and arrangements by imposing legally binding requirements on the obliged entities. The draft regulations are thus expected to facilitate the consistent and harmonised application by the BdP of Eurosystem standards when conducting its oversight of payment systems in Portugal . 2.7 On that note, the ECB highlights the importance of the draft regulations’ consistency with the existing Eurosystem frameworks. To achieve such consistency, considering also that the Eurosystem frameworks are subject to amendments and alterations, the BdP might consider favouring the use of cross-references to these frameworks in the draft regulations, instead of further specifications when these simply repeat the content of such frameworks . 2.8 The ECB understands that the BdP continues to apply Eurosystem oversight expectations for links between retail payment systems .

text: 3. Specific observations

text: 3.1 Scope of the draft regulations 3.1.1 According to the explanatory memoranda accompanying the draft regulations, the draft regulations should not hinder the oversight to be performed by other central banks within the ESCB, including the ECB, over entities that carry out their activities in the context of payment systems. Even in the absence of direct references in the provisions of the draft regulations themselves, the ECB understands that the draft regulations do not intend to interfere with the implementation of

text: Regulation (EU) No 795/2014

text: of the European Central Bank (ECB/2014/28) (hereinafter the ‘SIPS Regulation’), which applies to systemically important payment systems (SIPS) on the basis of certain quantitative and qualitative criteria . 3.1.2 Having said that, the draft regulations do not define ‘payment systems’ or provide an exhaustive list of entities considered to operate in the field of retail payment systems or, in particular, expressly exclude SIPS from their scope of application . The ECB would therefore welcome the introduction of an explicit clarification in the draft regulations to the effect that their scope of application does not cover payment systems classified as SIPS under the SIPS Regulation. Additionally, the ECB would welcome further clarification to the effect that the draft regulations only apply to prominently important retail payment systems and other retail payment systems as defined under the RPS framework.

text: 26 See paragraph 2.1 of Opinion

text: 27 See, for example, points 2.3.2 and 5.3.2 of the draft instruction.

text: 28 Eurosystem, ‘Oversight expectations for links between retail payment systems’, 29 November 2012, available on the ECB’s website at www.ecb.europa.eu.

text: 29 See Regulation of the European Central Bank

text: (EU) No 795/2014

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

text: 31 See Article 2 of the draft notice.

text: 32 In particular, in Article 1 of the draft notice. 3.1.3 The ECB would further welcome the introduction of a provision specifying that the exercise of the BdP’s oversight tasks and the obligations introduced by the draft regulations are without prejudice to the oversight powers and tasks of the ECB and other NCBs resulting from the application of Eurosystem frameworks and will respect the ECB’s competences as primary overseer and the legitimate exercise of other NCBs’ oversight powers and tasks in the context of the ESCB, thereby reflecting in the enacting terms the clarification contained in the explanatory memoranda accompanying the draft regulations. The introduction of this provision would clarify that obligations under the draft regulations relating to assessments under the existing Eurosystem frameworks will respect the Eurosystem’s assignment of the primary oversight responsibility in line with the Eurosystem frameworks and as determined by the Governing Council. The ECB also points out that the application of the obligations under the draft regulations and the exercise of the BdP’s oversight tasks must respect the principles of proportionality and ensure that duplication of reporting requirements is avoided to the extent possible. 3.1.4 Furthermore, regarding the interplay of the draft regulations with the Eurosystem frameworks, it should be clarified whether the draft regulations are to cover only the entities that fall within the RPS and PISA frameworks following the respective Eurosystem classification exercises. With regard to the entities that fall under the PISA framework, the ECB draws attention to the Eurosystem exemption policy that complements the PISA framework pursuant to which every three years the ECB coordinates a Eurosystem-wide exercise to identify those payment schemes/arrangements that fall within the scope of the PISA framework and those that should be exempted from it, also in view of the Eurosystem oversight focus on those schemes and arrangements that have reached a considerable level of importance for the euro area. On the basis of the above, considering that the oversight assessments on payment instruments and schemes in the draft regulations are based on the PISA framework, clarification as to whether the draft regulations also cover entities that are granted an exemption from the PISA framework would be advisable. 3.1.5 In the same vein, the ECB also notes that, under the draft instruction, the respective entities must carry out self-assessments under the RPS and PISA frameworks within a maximum of one year after starting their activities. The ECB highlights that the stipulated timelines risk not taking into account the outcome of the Eurosystem’s classification exercises and the exemption policy enshrined in the PISA framework. The ECB therefore suggests that the timeline for conducting the self-assessment should be initiated only following the notification to the relevant entity that it is subject to the draft regulations and/or Eurosystem frameworks. 3.1.6 Further to the above, the ECB would suggest the introduction of clarifications on the subject matter of the draft regulations, particularly in the article setting out their object and scope , which, as currently drafted, does not reflect their actual scope, which extends beyond information reporting to cover the BdP’s assessment of the required information and issues of compliance with the principles underpinning the Eurosystem frameworks and related oversight actions. In particular, it is suggested to include a provision clearly setting out that the BdP will use the information collected from entities established in Portugal that fall within the scope of the draft regulations for the conduct of

text: 33 In particular, in Article 1 of the draft notice.

text: 34 Article 1 of the draft notice. assessments under the Eurosystem frameworks and also for other oversight actions. The ECB takes the view that this would be in line with the articles introduced in the draft regulations that specify the BdP’s oversight duties , as well as the provisions that set out obligations for entities to conduct selfassessments and those that specify that the BdP’s assessments and other oversight actions may result in the issuance of recommendations and/or observations by the BdP . 3.1.7 Additionally, the provision setting out the scope of application provides that an entity is considered to operate within the field of retail payment systems ‘in particular’ when it falls into one of the predefined categories. The use of the expression ‘in particular’ indicates that the list of entities which may fall within the draft regulations’ scope of application is non-exhaustive, potentially giving rise to issues of legal uncertainty. 3.1.8 Finally, the draft regulations provide that an entity will be considered to operate in the field of retail payment systems and, therefore, subject to the draft regulations, where, inter alia, it holds payment schemes and payment arrangements . The Eurosystem oversight framework for electronic payment instruments, schemes and arrangements provides that the principles contained therein are aimed at the governance bodies of such schemes and arrangements . The achievement of consistency in the terminology used in the draft regulations regarding its application to payment schemes and arrangements with that used in the Eurosystem oversight framework would ensure greater coherence and legal certainty. 3.2 Enforcement measures 3.2.1 The ECB understands that the BdP has the possibility to apply enforcement measures or sanctions in respect of the entities included within the scope of application of the draft regulations through the general provisions contained in the Legal Framework of Credit Institutions and Financial Companies , even though the draft regulations do not expressly refer to the enforcement measures available to the BdP in the event of non-compliance with the notification requirements pertaining to commencement, modification or cessation of business and the information required for the oversight assessments . In this context, the ECB also notes that, in respect of the assessments carried out 42, by the BdP under the draft regulations, the BdP may issue recommendations and/or observations but the draft regulations do not explicitly set out the distinction between each type of measure, their legal nature and whether or not they are legally binding. The draft regulations are also silent on the ultimate consequences that stem from the issuance of an observation. The recommendations are ranked by reference to their degree of criticality . Entities subject to a recommendation must draw

text: 35 See Article 8 of the draft notice.

text: 36 See Articles 7, 8 and 9 of the draft instructions.

text: 39 See Section 3 of the Eurosystem oversight framework for electronic payment instruments, schemes and arrangements.

text: 40 See, in particular,

text: Articles 117

text: -B(2) and 210(i) of the Legal Framework of Credit Institutions and Financial Companies.

text: 41 See Articles 3, 4 and 5 of the draft notice.

text: 42 See point 8.1 of the draft instruction.

text: 43 See point 9.2 of the draft instruction. up an action plan for the implementation of the recommendation and share it with the BdP , which is to monitor its implementation . 3.3 Pan-European service providers established outside Portugal 3.3.1 The ECB notes that pan-European payment service providers that carry out activities in Portugal, but which are not established in Portugal, will only be subject to the limited set of obligations contained in the draft regulations to notify the BdP of the commencement, modification and termination of their activity in Portugal. The ECB therefore understands that, apart from these very limited notification obligations, the primary purpose of the draft regulations is to regulate payment system activities undertaken by entities that are established in Portugal. 3.4 Alignment of the draft regulations with other Eurosystem frameworks and guidance 3.4.1 The ECB understands that the draft regulations also cover the BdP’s oversight responsibilities in respect of entities responsible for the provision of critical services to payment systems, schemes and arrangements . The BdP’s assessment of the provision of these critical services is to be based on the assessment methodology for the oversight expectations applicable to critical service providers , published by the Bank for International Settlements (BIS) . The ECB also notes that the BdP’s assessment should follow any relevant Eurosystem guidance. 3.4.2 Regarding the assignment by the draft regulations of oversight responsibilities to the BdP in respect of the cyber resilience of retail payment systems, the ECB welcomes that the exercise by the BdP of its oversight responsibilities in this respect is to be based on the CROE . 3.4.3 The draft regulations require the obliged entities to report to the BdP any major incidents affecting their activity, which may be operational or security incidents. The ECB welcomes the alignment of the draft regulations with Eurosystem guidance regarding major incident reporting. Additionally, the ECB recommends that the draft regulations should clarify that the BdP will share relevant information about major incidents with the Eurosystem and on a case-by-case basis with the ESCB. 3.5 Collection of statistical information 3.5.1 Regarding the requirements under the draft regulations for obliged entities to provide the BdP with statistical information on the payment transactions and services carried out in the course of their activities , and for the BdP to detail, by way of a regulation, the statistical information to be provided by the obliged entities , the ECB understands that such information is currently specified in a previous regulation issued by the BdP . The obliged entities may already be required to report information concerning their payment activities under

text: Directive (EU) 2015/2366

text: of the European

text: 44 See point 9.3 of the draft instruction.

text: 45 See point 9.4 of the draft instruction.

text: 46 See point 6.1 of the draft instruction.

text: 47 See Bank of International Settlements, ‘Assessment methodology for the oversight expectations applicable to critical service providers’ (December 2014), available on the BIS’s website at www.bis.org.

text: 48 See point 6.2 of the draft instruction.

text: 49 Eurosystem ‘Cyber resilience oversight expectations for financial market infrastructures’ (December 2018), available on the ECB’s website at www.ecb.europa.eu.

text: 52 See Instruction No 19/2012. Parliament and of the Council to the designated national competent authority and, under

text: Regulation (EU) No 1409/2013

text: (ECB/2013/43) , to the BdP. Any further reporting requirements imposed by the BdP should take account of, and not duplicate or conflict with, the reporting requirements imposed on the obliged entities under

text: Directive (EU) 2015/2366

text: and

text: Regulation (EU) No 1409/2013

text: (ECB/2013/43). This is necessary to comply with the statistical principles that govern the production of statistics by the ESCB under

text: Article 3

text: a of

text: Council Regulation (EC) No 2533/98

text: , including costeffectiveness and minimisation of the reporting burden. This opinion will be published on EUR-Lex. Done at Frankfurt am Main, 30 December 2024. [signed] The President of the ECB Christine LAGARDE

text: Directive (EU) 2015/2366

text: of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market, amending Directives

text: and

text: and

text: Regulation (EU) No 1093/2010

text: , and repealing Directive

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

text: Regulation (EU) No 1409/2013

text: of the European Central Bank of 28 November 2013 on payments statistics (ECB/2013/43) (OJ L 352, 24.12.2013, p. 18).

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).


text: Proposition de loi relative à la surveillance des fournisseurs de services de messagerie financière/Wetsvoorstel houdende het toezicht op aanbieders van financiële berichtendiensten, Chambre des représentants/Kamer van volksvertegenwoordigers, 2024-2025, No. 56-0610/001.

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

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

text: Loi du 22 février 1998 fixant le statut organique de la Banque Nationale de Belgique / Wet van 22 februari 1998 tot vaststelling van het organiek statuut van de Nationale Bank van België, telle que modifiée/zoals nader gewijzigd, Moniteur Belge/Belgisch Staatsblad, 28.3.1998, p. 9377.

text: Regulation of the European Central Bank

text: (EU) No 795/2014

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

text: See

text: Articles 5

text: to 8 of the draft law.

text: See

text: Articles 9

text: to 73 of the draft law.

text: See

text: Articles 5

text: to 7, 11, 17, 18 and 19, 23, 24, 27, 29, 30, 35, 36, 37 and 38, 39, 40 and 41, 42, 45, 51, 59, 61, 65, 68 and 69, 74 to 80, 82 to 86, and 88 to 92 of the draft law.

text: See Article 81 of the draft law.

text: See Article 94 of the draft law.

text: See paragraph 3.1 of Opinion

text: ; paragraph 2.8 of Opinion

text: ; paragraph 2.1 of Opinion

text: ; and paragraph 2.6 of Opinion

text: . All ECB opinions are published on EUR-Lex.

text: See Article 81 of the draft law.

text: See, inter alia, Regulation of the European Central Bank

text: (EU) No 795/2014

text: of 3 July 2014 on oversight requirements for systemically important payment systems (OJ L 217 23.7.2014, p. 16), as amended;

text: Regulation (EU) 2022/2554

text: of the European Parliament and of the Council of 14 December 2022 on digital operational resilience for the financial sector and amending Regulations

text: (EC) No 1060/2009

text: (EU) No 648/2012

text: (EU) No 600/2014

text: (EU) No 909/2014

text: and

text: (EU) 2016/1011

text: (OJ L 333, 27.12.2022, p. 1); and Proposal for a Regulation of the European Parliament and of the Council on payment services in the internal market and amending

text: Regulation (EU) No 1093/2010

text: (COM/2023/367 final).

title: Opinion of the European Central Bank of 17 January 2025 on the oversight of providers of financial messaging services (CON/2025/1)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 17 January 2025 on the oversight of providers of financial messaging services (

text: ) Introduction and legal basis

text: On 7 January 2025 the European Central Bank (ECB) received a request from the Governor of the Banque Nationale de Belgique/Nationale Bank van België (NBB), on behalf of the Belgian Government, for an opinion on a draft law on the oversight of providers of financial messaging services that are established in Belgium (hereinafter the ‘draft law’) . The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and Article 2(1), third and fifth indents, of

text: Council Decision 98/415/EC

text: , as the draft law relates to the NBB and to payment and settlement systems. In accordance with

text: Article 17.5

text: , first sentence, 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 According to the explanatory memorandum to the draft law (hereinafter the ‘explanatory memorandum’), the draft law aims to subject systemically important financial messaging service providers (SIFMSPs) established in Belgium, which play an important role in the proper functioning of clearing, settlement and payment systems, to certain requirements pertaining to their organisation, management and governance, and to specifically provide that they are subject to direct statutory oversight by the NBB. The oversight activities carried out by the NBB with respect to financial market infrastructures and financial messaging service providers (FMSPs), in particular the Society for Worldwide Interbank Financial Telecommunication (SWIFT), is currently mainly based on standards that are not legally enforceable (soft law) and on moral suasion. The central objective of the draft law is to base at least part of the oversight of SIFMSPs on a legally binding and enforceable framework. 1.2 By way of background, the explanatory memorandum notes that, pursuant to Article 8 of the Organic Law of the NBB , the NBB oversees the proper functioning of clearing, settlement and payment

text: systems (financial market infrastructures) and verifies their effectiveness and soundness in accordance with the applicable statutory provisions. Oversight is generally based on voluntary adherence and historical relationships with key players in the financial markets and entails the NBB engaging in dialogue with the entities operating financial market infrastructures and, where appropriate, on the basis of moral suasion, seeking to persuade them to comply with the standards intended to ensure the proper functioning, effectiveness and soundness of the systems concerned. As a result, these standards are usually not laid down in a legally binding framework and are therefore not legally enforceable. At the international level, the oversight standards for financial market infrastructures are primarily reflected in the Principles for Financial Market Infrastructures (PFMIs), developed in 2012 in cooperation between, on the one hand, the Committee on Payment and Market Infrastructures (CPMI) within the Bank for International Settlements (BIS) and, on the other hand, the Technical Committee of the International Organisation of Securities Commissions (IOSCO). At Eurosystem level, oversight of payment systems that are not systemically important is exercised on the basis of the PFMIs. An important exception with regard to voluntary adherence concerns the oversight of systemically important payment systems (SIPS), which is enshrined in a legally binding Regulation of the ECB on oversight requirements for systemically important payment systems . 1.3 By way of further background, the explanatory memorandum notes that the NBB’s oversight, which takes place within the Eurosystem, relates to operators of financial market infrastructures or payment schemes and arrangements, which are closely related to such infrastructures. The PFMIs also contain specific oversight expectations for critical service providers that do not themselves qualify as financial market infrastructures, but which provide services critical to the functioning of financial market infrastructures, such as specific information and communication technology (ICT) services and messaging services. Overseers may establish specific expectations with regard to critical service providers in order to support the security and sound functioning of financial market infrastructures. 1.4 The explanatory memorandum notes that a large number of financial institutions and financial market infrastructures of systemic importance depend on SWIFT for their daily messaging needs. As a provider of critical financial messaging services to these infrastructures, SWIFT is itself systemic in nature. The NBB exercises oversight over SWIFT, which operates globally, together with other central banks. The NBB acts as lead overseer and coordinates this cooperative oversight since SWIFT’s registered office is located in Belgium. 1.5 The explanatory memorandum states that the system of oversight based on voluntary adherence reached its limits for some market infrastructures and was unable to consistently and effectively ensure robust compliance with soft law oversight standards. This has resulted in a trend towards better legal enshrinement of oversight standards in legally binding frameworks, given the increasingly integrated market for the execution of financial transactions and the increasingly complex relationships between participants in these transactions. SWIFT overseers therefore believe that some of these standards should be codified, to act as a legal backstop and ensure a level playing field with regard to financial sector oversight. In addition to the enhanced oversight envisaged by the draft law, the NBB may continue to perform classical oversight, based on moral suasion, over

text: SIFMSPs. Moreover, the classical oversight expectations also apply to all matters relating to the functioning and consensus-based decision-making process between the NBB and other authorities with which it has concluded an arrangement to support cooperative oversight, as is the case for the cooperative oversight of SWIFT by the NBB and the other G10 central banks. 1.6 The draft law proposes to determine the systemic importance of FMSPs based on a threshold of 1 billion financial messages processed by the FMSP per year, measured as the average for the three previous calendar years. On the NBB’s advice, the King may modify the amount of the threshold or lay down detailed rules to calculate the threshold . 1.7 The draft law introduces an extensive set of obligations applicable to SIFMSPs, including as concerns (1) their organisation and management, including the required corporate form and organs and independence of certain supervisory board members, the required establishment of audit, risk, and governance and nomination committees, the need for independent control functions, including compliance, risk management and internal audit functions, requirements relating to managers, professional integrity and suitable expertise, and required business organisation, supervision and management; (2) capital requirements; (3) strategic decisions; (4) outsourcing; (5) conduct of business and risk management, including ICT, investment, legal and operational risks, recovery and orderly wind-down planning, business continuity and service availability, digital operational resilience, incident management, classification and reporting, access and participation criteria for the provision of services, communication processes and standards, and the disclosure of rules, key procedures and market data . 1.8 The draft law introduces new provisions governing the oversight by the NBB of FMSPs, including, but not limited to, SIFMSPs. The NBB must ensure that FMSPs operate at all times in compliance with the draft law and its implementing decrees and regulations. In this context, the NBB may request information from, and carry out on-site inspections at, FMSPs and their agents and entities to which a SIFMSP has outsourced activities, and SIFMSPs would be required to impose a contractual obligation on these agents and entities to fully cooperate with the NBB when it requires such information or carries out on-site inspections. The NBB may also recover from FMSPs the operating costs relating to its oversight. The NBB’s other powers and tasks with respect to SIFMSPs, in particular, include (1) classifying a FMSP as a SIFMSP on the basis of the threshold established under the draft law; (2) approving the appointments of new directors and certain other functions; (3) specifying requirements in terms of capital, retained earnings and reserves and monitoring compliance with capital requirements; (4) authorising certain strategic decisions and outsourcing decisions of critical or important functions; (5) receiving reports and other information on risk management (business continuity plan) and on digital operational resilience (ICT business continuity and incidents); (6) taking various measures in case of non-compliance or threat to the stability and continuity of financial transactions or to the proper functioning, soundness and effectiveness of clearing, settlement and payment systems and the stability of the financial system in general, including prohibiting the distribution of dividends or profits, imposing more stringent capital requirements, requiring the reduction of risks inherent in the SIFMSP’s activities or organisation (if

text: necessary by disposing of all or part of its activities or network), imposing additional reporting obligations, the appointment of a special statutory auditor, the replacement of all or part of management or the appointment of interim administrators; (7) imposing periodic penalty payments, administrative fines and other measures in case of certain infringements; and (8) adopting certain regulations under the draft law . 1.9 The draft law provides that the NBB may conclude non-binding cooperation arrangements with Union authorities and the authorities of Member States of the European Economic Area (EEA) and of third countries that are entrusted with missions equivalent to those of the NBB under Article 8 of the Organic Law of the NBB, as well as with the central banks or monetary authorities of the Union, other EEA Member States and third countries. When the oversight of a SIFMSP is the subject of such a cooperation arrangement, the NBB must carry out its tasks under the draft law in support of such cooperation. The NBB must first consult with the other participants to such cooperation arrangements when it intends to issue a communication, recommendation or circular or to adopt a regulation under Article 8 of the Organic Law of the NBB. The NBB may disclose to the other participants to such cooperation arrangements confidential information of which it becomes aware by virtue of the exercise of its powers under the draft law, under the conditions determined by the Organic Law of the NBB . 1.10 The draft law is intended to enter into force on 1 January 2026 .

text: 2. Observations

text: 2.1 SWIFT is a limited liability cooperative company that provides messaging services to financial institutions and market infrastructures across the globe. Through its financial messaging services that provide a secure, standardised, and reliable platform for financial institutions to exchange information about transactions, SWIFT fulfils a crucial role in facilitating correspondent banking and financial market infrastructure activities. It underpins the global financial infrastructure, enabling seamless cross-border transactions and fostering trust in international financial operations. Such a fundamental role for the global financial industry creates significant systemic dependency on SWIFT. 2.2 Against this backdrop, the ECB strongly welcomes the draft law, which provides a more robust legal basis for the NBB’s tasks relating to the oversight of FMSPs and SIFMSPs such as SWIFT, thereby strengthening the NBB’s oversight function. Transitioning from a framework based on soft law instruments and moral suasion to a legally binding framework will facilitate the addressing of compliance issues by entities that carry out financial messaging-related activities. The ECB also welcomes the NBB’s capacity under the draft law to reinforce and clarify its role as overseer of

text: FMSPs and, more particularly, SIFMSPs such as SWIFT by imposing legally binding requirements on these entities and their agents . 2.3 SWIFT has been subject to oversight since 1998. The G10 central banks have formalised an oversight arrangement for the purpose of monitoring the adequate and safe functioning of SWIFT as a critical service provider. In addition to the participating G10 jurisdictions, the BIS and the ECB are represented in the relevant international working groups. As noted in the explanatory memorandum, since SWIFT is headquartered in Belgium, the NBB acts as the lead overseer and chairs the international oversight meetings. This oversight primarily focuses on ensuring that SWIFT has in place effective controls and processes to avoid posing a risk to the financial stability and the soundness of financial market infrastructures. In this context, the ECB strongly welcomes that the draft law provides an explicit legal basis for the NBB to conclude cooperation arrangements with, consult with, and disclose confidential information to, the ECB and the central banks and monetary authorities of the EEA Member States and other countries in support of the NBB’s performance of its oversight tasks under the draft law. The ECB understands that the cooperative oversight of SWIFT will continue to be governed by the existing G10 cooperative arrangement, which will remain in force unaffected, in this particular respect, by the draft law. In this context, the ECB also understands that the existing G10 cooperative arrangement will benefit from the provisions of the draft law on a going-forward basis. 2.4 Finally, the ECB understands that, in drafting the bill, the competent national authorities have taken into consideration, and will interpret the draft law in conformity with, all relevant existing and pending Union legislation .

text: This opinion will be published on EUR-Lex.

text: Done at Frankfurt am Main, 17 January 2025.

text: [signed]

text: The President of the ECB

text: Christine LAGARDE