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

text: Covenant between the Securities Board of the Netherlands and De Nederlandsche Bank on the coordination of supervision, Amsterdam, 22 October 2001.

title: Opinion of the European Central Bank of 24 January 2002 at the request of the Netherlands Ministry of Finance  on a draft act amending the 1977 Sanctions Act (CON/2002/5)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 24 January 2002 at the request of the Netherlands Ministry of Finance on a draft act amending the 1977 Sanctions Act (

text: 1. On 4 January 2002 the European Central Bank (ECB) received a request from the Netherlands Ministry of Finance for an opinion on a draft act amending the 1977 Sanctions Act (hereinafter referred to as “the draft act”).

text: 2. The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community (hereinafter referred to as the "Treaty") 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 act contains provisions concerning a national central bank. Furthermore, the draft act may have an influence on 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, this opinion has been adopted by the Governing Council of the ECB.

text: 3. The objectives of the draft act are to amend the 1977 Sanctions Act with a view to the implementation of treaties, international decisions, recommendations and agreements aiming to fight terrorism and to extending the powers of supervision of compliance with financial sanctions. The new regime creates a framework for the sanctioning of persons as well as countries and a specific supervisory regime to oversee the compliance by financial institutions with such financial sanctions. The draft act does not aim to implement specific international or EU legislation, but to provide a basis for more efficient implementation of sanctions in the future. In order to achieve this goal, the scope of application and the supervision instruments provided for in the Sanctions Act are to be updated. The existing supervisory structures will be broadened by ministerial decree to include the supervision of compliance with new financial sanctions.

text: 4. The ECB would like to recall the commitment of the Eurosystem to contribute to the adoption, implementation and execution of measures against the use of the financial system for terrorist activities, as expressed in the Governing Council's public statement of 1 October 2001. In order to ensure that public trust in the integrity of the financial system is fully preserved, it is of the utmost importance that financial systems do not work to the benefit of persons and organisations associated with terrorist activities. While recognising that the compliance with sanctions by financial institutions may in some situations involve practical difficulties, the ECB considers that good cooperation between financial institutions and national authorities will ensure the effectiveness of financial sanctions. Against this background, the ECB welcomes the objectives of the draft act of combatting the financing of terrorism more efficiently, whether individuals, organisations or governments are responsible for this, and of supervising appropriately the compliance by financial institutions with sanctions regimes.

text: 5. The ECB notes that the measures proposed are not incompatible with the existing framework for supervision.

text: Article 1

text: (F) of the draft act proposes that a new

text: Article 10

text: be added to the 1977 Sanctions Act that will refer to the person responsible for supervising compliance with its provisions, depending on the type of institution that must comply with sanctions regulations. This is done by direct reference to the 1992 Act on the Supervision of the Credit System, which forms the basis for the supervision of credit institutions in the Netherlands and places the responsibility for such supervision with De Nederlandsche Bank. It is also noted that supervision of investment institutions falls outside the scope of competence of De Nederlandsche Bank, falling as it does within the responsibilities of the Securities Board of the Netherlands. The Covenant that has recently been signed by these two supervisory bodies ensures that the supervision of the financial sector as a whole will be effective .

text: 6. The ECB confirms that it has no objection to the competent national authorities making this opinion publicly available at their discretion. Done at Frankfurt am Main on 24 January 2002. The President of the ECB [signed] Willem F. DUISENBERG


text: "Draft decree concerning the abrogation of the legal tender status of banknotes denominated in francs of the Banque de France" and "Draft decree concerning the abrogation of the legal tender status of coins denominated in francs". 3 OJ L 125, 19.5.1999, p 34.

text: OJ L 139, 11.5.1998, p. 1. 5 See in this respect the ECB opinion of 30 August 2001 on a draft decree relating to the marking of banknotes denominated in francs (

publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 24 January 2002 at the request of the French Ministry of the Economy, Finance and Industry on two draft decrees concerning the abrogation of the legal tender status of banknotes and coins denominated in French francs (CON/2002/6)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 24 January 2002 at the request of the French Ministry of the Economy, Finance and Industry on two draft decrees concerning the abrogation of the legal tender status of banknotes and coins denominated in French francs (

type: rubrik

text: 1. On 27 December 2001, the European Central Bank (ECB) received a request from the French Ministry of the Economy, Finance and Industry for an ECB opinion on two draft decrees (hereinafter referred to as the “draft decrees”) concerning the abrogation of the legal tender status of banknotes and coins denominated in French francs .

type: stycke

text: 2. The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community, the first indent of Article 4(a) of the Statute of the European System of Central Banks and of the European Central Bank and the first and second indents of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , since the two draft decrees relate to currency matters and means of payment. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank , this opinion has been adopted by the Governing Council of the ECB.

text: 3. The draft decrees provide for the abrogation of the legal tender status of banknotes and coins denominated in French francs. The first draft decree concerns the abrogation of the legal tender status of banknotes issued by the Banque de France. The second concerns the abrogation of the legal tender status of coins. According to the information provided by the French authorities, the abrogation of the legal tender status of banknotes will be done by means of a simple decree based on Article L.122-1 of the French Financial and Monetary Code. Once the Council of State has provided its opinion, a decree of the Council of Ministers will be adopted to establish the principle of the abrogation of the legal tender status of coins. A subsequent “arrêté”, adopted and published simultaneously to the decree on banknotes, will set out the date and modalities of such abrogation as well as the list of types of coins in French francs the legal tender status of which will be abrogated. The use of different procedures for banknotes and coins is justified by the different legal frameworks applicable to banknotes and coins under French law. The current date envisaged for the abrogation of the legal tender status of banknotes and coins under the scenario agreed by the National Euro Committee ("Comité National de l'Euro") is 18 February 2002. Article 15(2) of Council Regulation EC No 974/98 of 3 May 1998 on the introduction of the euro provides in this respect that "Each participating Member State may, for a period of up to six months after the end of the transitional period, lay down rules for the use of the banknotes and coins denominated in its national currency unit […] and take any measures necessary to facilitate their withdrawal" . The ECB understands that, in line with the recommendation of the National Euro Committee, a certain degree of flexibility should be ensured in the process of the withdrawal of banknotes and coins denominated in French francs, and that, as a precautionary measure, the French authorities reserve the possibility of postponing the date of abrogation in the case of unanticipated exceptional events. However, the same date will in any case apply to the abrogation of the legal tender status of both banknotes and coins.

text: 4. According to the draft decrees and in line with Article 16 of Regulation EC No 974/98, banknotes denominated in French francs will be exchanged, subject to the provisions of Decree No 2001-933 of 12 October 2001 , at the offices of the Banque de France, the Institut d'Emission des Départements d'Outre-Mer and the Treasury until 17 February 2012. Coins denominated in French francs will continue to be exchanged until 17 February 2005. Specific provisions will apply to the exchange of collector coins, as listed in Annex 2 of the second draft decree.

text: 5. The draft decrees (in their respective Articles

text: and

text: ) expressly specify that they apply to the French territorial community of Mayotte. Although

text: Council Decision 1999/95/EC of 31 December 1998

text: concerning the monetary arrangements in the French territorial communities of Saint-Pierre-et-Miquelon and Mayotte treats these two communities on an equal footing, the ECB understands, on the basis of information received from the French authorities, that unlike Mayotte, Saint-Pierre-et-Miquelon does not need to be expressly mentioned as this community would in any case be covered by the draft decrees.

type: vagledning

utgivare: ecb


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

title: Opinion of the European Central Bank of 1 February 2002 at the request of the Irish Department of Finance on a draft amendment to the Economic and Monetary Union Act 1998 (CON/2002/7)

text: 1. On 11 January 2002 the European Central Bank (ECB) received a request from the Irish Department of Finance for an ECB opinion on a draft amendment to the Economic and Monetary Union Act 1998. On 25 January 2002 the ECB received an updated draft of the amendment.

text: 2. The ECB’s competence to deliver an opinion is based on

text: Article 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 amendment contains provisions concerning a national central bank and currency matters. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, this opinion has been adopted by the Governing Council of the ECB.

text: 3. The draft amendment makes provision for the payment into the Irish Government’s Exchequer by the Central Bank of Ireland (CBI), at the direction of the Minister for Finance, of (a) the accrued amount of the proceeds of the issue of coin paid into the CBI’s general fund and carried therein to the credit of the CBI’s currency reserve under various legislative enactments, plus (b) the accrued amount of the proceeds of the melting down of coins carried to the credit of the CBI’s currency reserve, less (c) the accrued amount of sums required for the provision, issuance and redemption of coin, which are defrayed out of the CBI’s general fund and debited therein to the CBI’s currency reserve under such enactments. The amounts to be paid into the Exchequer would be calculated in a manner determined by the Minster for Finance, after consultation with the CBI. The draft amendment also takes account of the possibility that the net income from the issue of coin might be less than the sum required to be defrayed out of the CBI’s general fund and debited therein to its currency reserve in respect of the provision of coins or in respect of the redemption of coins (including euro coins circulating in Ireland and issued by other Member States), in which case the Minister for Finance would be required to advance the balance to the CBI’s general fund.

text: 4. The ECB notes that the effect of this amendment would be to remove from the CBI’s balance sheet that portion of its capital and reserves that is currently represented by the cumulative net proceeds to date from the issue of coin, which accounted for over 20% of the total capital and reserves (excluding revaluation account balances) reflected on the balance sheet as at 31 December 2000, as well as the net proceeds from the issue of coin in the future. The ECB notes that this change in the balance sheet treatment of coins issued by the Minister for Finance is consistent with the accounting treatment of euro coins issued by other participating Member States in accordance with Article 106 of the Treaty. It is understood that the proceeds will be applied towards the funding of the Irish Government’s required contribution to the Irish National Pension Reserve Fund. In principle, the ECB has no objections to this particular amendment.

text: 5. The ECB confirms that it has no objection to the competent national authorities making this opinion publicly available at their discretion. Done at Frankfurt am Main on 1 February 2002. The President of the ECB [signed] Willem F. DUISENBERG


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

title: Opinion of the European Central Bank of 8 March 2002 at the request of the Danish Financial Supervisory Authority on a draft act amending the Securities Trading Act (CON/2002/8)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 8 March 2002 at the request of the Danish Financial Supervisory Authority on a draft act amending the Securities Trading Act (

text: 1. On 18 February 2002 the European Central Bank (ECB) received a request via Danmarks Nationalbank from the Danish Financial Supervisory Authority on behalf of the Ministry of Economics and Business Affairs for an opinion on a draft act amending the Securities Trading Act (hereinafter referred to as the ‘draft act').

text: 2. The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and 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 act, amongst other things, contains provisions extending an existing right to take a pledge from a pool of securities, clarifies the various competencies of the different Danish authorities with regard to stock exchanges, establishes a register of employees with insider information and broadens the scope of the prohibition against insider trading. The draft act may have an influence on the stability of financial institutions and markets and the efficiency of payment and settlement systems. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, this opinion has been adopted by the Governing Council of the ECB.

text: 3. The draft act concerns an extension of an existing right to take a pledge from a pool of securities in connection with the clearing and settlement of payments. It ensures that a pool of securities can be used as collateral for a loan even before the exact amount of the loan and, thus, the amount of security required is known. Furthermore, the draft act clarifies the competencies of various bodies within the area of stock exchanges, in particular the right to approve prospectuses for securities to be traded on a stock exchange. In addition, the draft act contains provisions concerning the protection of consumers’ rights’, but these will not be analysed further here. Moreover, the draft act establishes a register containing information on (i) employees of companies the stocks of which are traded on a stock exchange who have access to inside information of relevance to the value of the stocks; and (ii) their private trading in the shares in the company. Finally, it is suggested that the prohibition on insider trading be extended to cover trade with UCITS investment certificates which are not listed on a stock exchange.

text: 4. The ECB welcomes the proposal to extend the existing right to take a pledge from a pool of securities in connection with the clearing and settlement of payments, insofar as rights of the European System of Central Banks are not prejudiced. The aim here is to minimise risk and ensure efficient and sound clearing and payment systems. These changes, contained in

text: Article 1(18)

text: and (19), are two-fold. First, the draft act provides that the pool can also be used for the settlement of non-trading related payments by a clearing institution. Secondly, and more importantly, it provides that the pool of securities can be used as collateral for payment of a loan before the exact amount of the loan and, thus, the amount of security required is known. As the registration of the pledge is done in the Central Securities Depository (‘Værdipapircentralen’), and the settlement of the payment is done in a payment system (i.e. in two different entities), the establishment of the loan and the registration of the pledge need to take place before settlement can take place. However, in some systems the borrower only knows the exact size of the loan after the settlement has begun, for which reason there is a need to establish the pledge on the basis of an anticipated amount. The establishment of the pledge in advance of the settlement is understood primarily to originate from the preparations for the Continuous Linked Settlement project.

text: 5. The ECB understands that under current legislation there is a certain overlap of competencies between the relevant Danish authorities. The draft act clarifies in

text: Article 1(1)

text: -(12) the competencies within the area of stock exchanges. Amongst other things, the existing right of the Danish Securities Council (‘Fondsrådet’) to issue rules of ‘best practice’ within the field of securities trading is made mandatory. In addition, it is noted that in view of the internationalisation and privatisation of stock exchanges it is no longer appropriate for stock exchanges to approve prospectuses for securities to be traded on a stock exchange. Therefore, the competence is transferred to the Danish Securities Council, which is a public authority, in order to avoid, amongst others things, that a prospectus on shares issued by a stock exchange is approved by the stock exchange itself. The draft act enables the Danish Securities Council to delegate its powers of approval, except that it cannot delegate them to a stock exchange in relation to its own shares.

text: 6. Moreover, the draft act draws, in

text: Article 1(14)

text: and (15), on international experience by establishing a register containing information on employees of companies the stocks of which are traded on a stock exchange, and who have access to inside information of relevance to the value of the stocks. The register contains information on these employees’ private trading in shares of the company and on the amount of shares that they hold. The ECB welcomes this initiative, which further enhances the transparency of the securities market and should have a preventive effect against insider trading. The register will be established in addition to existing rules concerning disclosure of possession of shares or voting rights above certain thresholds.

text: 7. Finally, the ECB welcomes the suggestion that the prohibition on insider trading be extended under Article 1(13) of the draft act, in order to cover trade with UCITS investment certificates not listed on a stock exchange. Such certificates are in certain respects similar to shares listed on a stock exchange, and to avoid unnecessary legal risk these certificates are covered by the prohibition.

text: 8. The ECB confirms that it has no objection to the competent national authorities making this opinion publicly available at their discretion. Done at Frankfurt am Main on 8 March 2002. The President of the ECB [signed] Willem F. DUISENBERG


text: OJ L 125, 19.5.1999, p 34.

title: Opinion of the European Central Bank of 13 March 2002 at the request of the French Ministry of the Economy, Finance and Industry on a draft decree amending the Decree governing financial relations with foreign countries (CON/2002/9)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 13 March 2002 at the request of the French Ministry of the Economy, Finance and Industry on a draft decree amending the Decree governing financial relations with foreign countries (

text: 1. On 25 February 2002, the European Central Bank (ECB) received a request from the French Ministry of the Economy, Finance and Industry for an opinion on a draft decree amending the Decree governing financial relations with foreign countries (hereinafter referred to as the “draft decree”).

text: 2. The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community, the second indent of Article 4(a) of the Statute of the European System of Central Banks and of the European Central Bank and the fourth indent of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , since the draft decree relates to the collection, compilation and distribution of monetary, financial, banking, payment systems and balance of payments statistics. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank , the Governing Council of the ECB has adopted this opinion.

text: 3. The draft decree amends Decree No 89/938 of 29 December 1989, as amended, governing financial relations with foreign countries. Title II of Decree No 89/938 of 29 December 1989, as amended, lays down provisions relating to statistical reporting carried out for the purpose of France's balance of payments and international investment position statistics. While previously the companies involved in direct reporting were defined according to an overall amount of settlements in goods and services vis-à-vis non-resident counterparts, according to the draft decree, companies or groups of companies for which transactions with foreign countries for at least one category of service or income of the balance of payments exceed during one calendar year an amount determined by order have to report directly to the Banque de France all their operations conducted with foreign countries or in France with non-residents.

text: 4. The ECB welcomes the proposed amendments. Reference is made to transactions, instead of settlements, which is in line with the opinion of July 2001 of the Committee for Monetary, Financial and Balance of Payments Statistics. A reporting threshold for balance of payments statistics of EUR 12 500 for banks was introduced from 1 January 2002 in anticipation of the time limit of 1 July 2002 laid down by

text: Regulation (EC) No 2560/2001

text: of the European Parliament and of the Council of 19 December 2001 on cross-border payments in euro . Following the introduction of this threshold, certain information concerning some balance of payments items, mainly services and income, will be lost. Therefore, with a view to maintaining the quality of statistics, it is important, as proposed in the draft decree, to collect from other reporting agents statistical information on services and income for the purpose of balance of payments.

text: 5. The ECB confirms that it has no objection to the competent national authorities making this opinion publicly available at their discretion. Done at Frankfurt am Main on 13 March 2002. The President of the ECB [signed] Willem F. DUISENBERG


title: Opinion of the European Central Bank of 18 March 2002 at the request of the Danish Financial Supervisory Authority on a draft act amending the Financial Services Act and other financial Acts (CON/2002/10)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 18 March 2002 at the request of the Danish Financial Supervisory Authority on a draft act amending the Financial Services Act and other financial Acts (

text: 1. On 22 February 2002 the European Central Bank (ECB) received a request via Danmarks Nationalbank from the Finanstilsynet (Danish Financial Supervisory Authority) on behalf of the Økonomi- og Erhvervsministeriet (Ministry of Economics and Business Affairs) for an opinion on a draft act amending the Lov om finansiel virksomhed (Financial Services Act) and other financial Acts (hereinafter referred to as 'the draft act').

text: 2. 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 concerning national central banks and the stability of financial institutions and markets of Article 2(1) of the

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 , as the draft act, amongst others, contains provisions concerning the supervision of company pension funds, demarcation of the powers to issue rules on best practices for securities traders, and the legal position of creditors of bonds and currency swaps issued and entered into by Danish Ship Finance (Danmarks Skibskreditfond) in case of the latter's insolvency. Some of the provisions of the draft act will also apply to Danmarks Nationalbank. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council of the ECB has adopted this opinion.

text: 3. In December 2000 the ECB was consulted on the draft Lov om finansiel virksomhed (Financial Services Act) (CON/00/32). The intention of the draft was to ensure simplification and increased consistency of the financial services legislation. On that occasion the ECB welcomed the intention to further review at a later stage the financial services legislation which is now one of the intentions of the draft act. Likewise, the ECB also on this occasion welcomes the intention to continue the legal reform work with further harmonisation and codification, as well as restructuring of legislation.

text: 4. The draft act ensures that the rules on best practices for securities traders are further harmonised and intends to remove overlapping of the powers of the relevant Danish authorities in this field. As regards the calculation of solvency ratios, the draft act amends the definition of capital in line with international agreements reached within the Basel Committee. The draft act also ensures that bonds issued by Danish Ship Finance obtain the same preferential position in case of insolvency as that currently enjoyed by bonds issued by mortgage credit institutions. Finally, the draft act contains several amendments to other financial laws of minor importance for the ECB. To the extent that the draft act implements directives such as

text: Council Directive 93/22/EEC of 10 May 1993

text: on investment services in the securities field , as last amended by Directive

text: of the European Parliament and the Council , and Directive

text: of the European Parliament and of the Council of 20 March 2000 relating to the taking up and 4 5 pursuit of the business of credit institutions , as last amended by Directive

text: , the Danish authorities are not obliged to consult the ECB, in accordance with

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

text: 5. The draft act ensures in Section 1(9)-(10) demarcation of the competence to issue rules on best practices for securities traders. Det Finansielle Virksomhedsråd (Financial Services Council), which is empowered to take decisions regarding supervisory matters of general public importance and provides advice to the Danish Financial Supervisory Authority on issuing regulations, will have the exclusive power to issue rules on best practices applying in general to financial services equivalent to the power to issue rules on best practices specifically in the field of securities trading held by the Fondsrådet (Securities Council), which operates to ensure the smooth functioning of the Danish securities market and compliance with the lov om værdipapirhandel (Securities Trading Act). As a consequence, the Forbrugerombudsmanden (Consumer Ombudsman) will no longer be empowered to issue such rules, but will be able to attend without the right to vote the meetings of the Financial Services Council when cases concerning best practices are discussed. The ECB welcomes these efforts for a clear demarcation of authority and thus greater legal certainty.

text: 6. In Opinion CON/00/32 the ECB mentioned that in adopting the rules on best practices, particular attention might be paid to their convergence with respective rules of other countries so as to ensure high standards in business practices. In addition, close cooperation with the respective rule-making authorities of other Member States was encouraged by the ECB in order to achieve a high degree of convergence of practices throughout the Community. In this respect it is noted that the provisions on best practice in the draft act are based on the principles on best practices issued by the International Organisation of Securities Commissions (IOSCO).

text: 7. It is noted that although Danmarks Nationalbank is not a securities trader, the provisions governing such traders apply to it, however, with the exemptions required due to the special nature of the central bank.

text: 8. The ECB welcomes the amendments to the definition of own funds when calculating the solvency ratio, which are intended, first, to simplify the regulations and, secondly, to increase access by institutions to funding sources. On the former, the rules on capital adequacy will be simplified by the repeal of the existing but unused provision according to which subordinate capital with a short maturity is part of the solvency statement. On the latter, the possibility is introduced of raising capital in a foreign currency, which receives supervisory recognition in calculating the solvency ratio. Improved market access will tend to improve the solvency of banks and thus will, with due regard to the quality of the funds, contribute to the stability of the financial system. The ECB notes, however, that the general remarks in the draft act refer to guidance from the Basel Committee. Given the focus and scope of application of the Financial Services Act, a reference to the relevant EU directive appears desirable.

text: 9. It is noted that Section 4(12) of the draft act repeals the lov om tilsyn med firmapensionskasser (Act on Supervision of Company Pension Funds) but that equivalent provisions are inserted in the Financial Services Act and lov om forsikringsvirksomhed (Insurance Services Act) as a further step towards harmonisation of regulation of the financial markets.

text: 10. Section 16(1)-(2) of the draft act is intended to ensure that bonds issued by Danish Ship Finance can continue to be considered as being financially sound. The objective of Danish Ship Finance is to finance ships. Most loans are granted in US dollars and funded through bond issues. These bonds will obtain the same preferential treatment in case of insolvency as bonds issued by mortgage credit institutions, which is better than would be the case according to the general applicable provision under the konkursloven (Insolvency Act). The ECB has no objections to the proposed amendment. It is noted that such bonds, denominated in Danish kroner, are eligible as collateral for ECB intraday credit to Danmarks Nationalbank and also to three national central banks of the Eurosystem.

text: 11. The ECB confirms that it has no objection to the competent national authorities making this opinion publicly available at their discretion. Done at Frankfurt am Main on 18 March 2002. The President of the ECB [signed] Willem F. DUISENBERG


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

title: Opinion of the European Central Bank of 23 April 2002 at the request of the Finnish Ministry of Finance on a draft proposal concerning the issue of commemorative coins in Finland (CON/2002/12)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 23 April 2002 at the request of the Finnish Ministry of Finance on a draft proposal concerning the issue of commemorative coins in Finland (

text: 1. On 25 March 2002 the European Central Bank (ECB) received a request from the Finnish Ministry of Finance for an opinion on a draft Government proposal concerning an amendment to the Laki metallirahasta 216/1998 (the Finnish Coinage Act) (hereinafter referred to as the “proposal”). The proposal intends to insert into the Finnish Coinage Act a provision on the issue of commemorative coins in Finland. According to the proposal the Finnish Ministry of Finance would have a right to determine by decree, and in accordance with Community legislation, the denominations and other properties of commemorative coins issued in Finland. These coins would have the status of legal tender only in Finland.

text: 2. The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community (hereinafter referred to as the “Treaty”) and on the first and second indents of

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

text: on the consultation of the ECB by national authorities regarding draft legislative provisions , as the proposal contains provisions concerning currency matters and means of payment. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council of the ECB has adopted this opinion.

text: 3. In principle the ECB welcomes the issue of collector or commemorative coins respecting the individual numismatic traditions and practices of the Member States. However, Member States should avoid developing the issue of collector or commemorative euro coins having legal tender status only in one State to a level where this may compromise the aims and principles of the single European coinage system established by the adoption of the euro.

text: 4. In accordance with Article 106(2) of the Treaty, Member States may issue coins subject to approval by the European Central Bank of the volume of the issue. Accordingly, the ECB has the exclusive right to approve the overall volume of coins, including collector and commemorative coins, issued by Finland. The ECB would like to draw attention to the fact that ECB Decisions approving the volume of coins have until now been adopted on an annual basis. Therefore, the ECB's approval for the volume of commemorative coins issued in Finland should be sought on an aggregate basis together with the yearly estimates of the volume of euro coins to be issued by Finland.

text: 5. Furthermore, the ECB would like to recall the importance of ensuring that euro collector and commemorative coins should be clearly distinguishable from euro coins issued for circulation. This has been endorsed by all the Member States in the Council conclusions adopted by the ECOFIN Council meeting on 31 January 2000. Therefore, the ECB suggests that the decrees to be adopted by the Finnish Ministry of Finance in accordance with the proposal always ensure that the coins to be issued fulfil the criteria adopted by the ECOFIN Council.

text: 6. With regard to possible risks incurred by collector or commemorative coins’ denominations that may coincide with the low denominations of euro banknotes, the ECB recalls the common agreement of the Member States reached at the ECOFIN Council meeting on 31 January 2000 requiring the Member States to consider any demands by the ECB on matters regarding such coins.

text: 7. Finally, the ECB would like to point out generally that while the collector and commemorative coins will have legal tender status only in the issuing Member State, the national central banks of the Eurosystem should be able to impose certain conditions and fees for possible arrangements through which owners of euro collector and commemorative coins issued in other euro area Member States can receive the face value of those coins.

text: 8. The ECB confirms that it has no objection to the competent national authorities making this opinion publicly available at their discretion. Done at Frankfurt am Main on 23 April 2002. The President of the ECB [signed] Willem F. DUISENBERG


text: OJ L 189, 3.7.1990, p. 42.

text: ECB Opinion

text: , OJ C 24, 26.01.2002, p.8.

title: Opinion of the European Central Bank of 24 April 2002 at the request of the Belgian Ministry of Finance on a draft proposal for a law on prudential supervision of the financial sector and financial services (CON/2002/13)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 24 April 2002 at the request of the Belgian Ministry of Finance on a draft proposal for a law on prudential supervision of the financial sector and financial services (

text: 1. On 18 March 2002 the European Central Bank (ECB) received a request from the Belgian Ministry of Finance for an opinion on a draft proposal for a law on prudential supervision of the financial sector and financial services (hereinafter referred to as ‘the draft proposal’). The draft proposal will introduce a comprehensive system for the supervision of the financial sector, including provisions on the coordination of the supervisory function. In addition, it provides specific rules on secondary markets for financial instruments.

text: 2. The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community (hereinafter referred to as the ‘Treaty’) and the sixth indent of

text: on the consultation of the European Central Bank (ECB) by national authorities regarding draft legislative provisions , as the draft proposal contains provisions concerning rules applicable to financial institutions which could 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, this opinion has been adopted by the Governing Council of the ECB.

text: 3. The ECB notes that Article

text: ° g) includes in the definition of “qualified intermediary” also the European Central Bank, the National Bank of Belgium (NBB) as well as the other central banks of the other Member States of the European Economic Area. The definition is used in the draft proposal in

text: Article 6

text: §1, which lists the subjects entitled to be admitted as members of the Belgian regulated markets (provided that they satisfy the conditions laid down in

text: Article 6

text: §2). Moreover, it is noted that according to

text: Article 27

text: §1, qualified intermediaries active in Belgium are requested to adopt an internal code of conduct for ensuring the respect of the provisions of Article

text: and

text: . In addition, the definition is used in

text: Article 31

text: , concerning a right of priority over financial instruments and funds. The ECB notes that, in principle, national law cannot impose obligations on the ECB and Eurosystem central banks with regard to operations conducted as part of the Eurosystem's tasks and it could be helpful if Belgian law explicitly confirms this point.

text: 4. In order to ensure proper external, public and independent control, as well as to provide market undertakings with the appropriate means to operate under private law and without any public status constraints, the ECB understands that the draft proposal envisages a further increase in the separation between the supervision of compliance with legislation concerning public policy conferred upon the Commissie voor het Bank- en Financiewezen/Commission Bancaire et Financière (BFC) and the activities of private market undertakings. To this effect, and in line with the ECB opinion of 22 November 2001 on the proposal for a directive on insider dealing and market abuse , the ECB would like to express the need to clearly limit and define the possible delegation of powers to market operators in order to avoid the problems identified in the statement of reasons of the draft Belgian law (lack of efficiency of the supervisory structure, the confidential nature of public service activities and the risk of conflict of interest). Therefore, the proposal that public authorities assume final responsibility for supervising compliance with Community and national legislation is welcomed by the ECB. This approach is also consistent with the views expressed by the Commission in its recently revised orientations on the review of the Investment Services Directive.

text: 5. The ECB notes that the competence of the NBB to ensure the proper, efficient and sound operation of clearing and payment systems, as mentioned in Article 8 of the NBB’s Organic Law, has been expressly recognised by Article 33 of the draft proposal. The ECB also notes that Articles 22 and 23 of the draft proposal, which provide for a general framework regarding clearing and settlement, give the King the competence to issue more detailed legislation by means of royal decrees. In accordance with the

text: Council Decision 98/415/EC

text: . The ECB would need to be consulted on such royal decrees as well.

text: 6. The draft proposal sets up a comprehensive framework to combat market abuse. Aside from Articles

text: and

text: which provide for criminal sanctions,

text: Article 25

text: enumerates various infringements related to the financial markets which give rise to administrative sanctions imposed by an independent administrative body, namely the BFC. The draft proposal sets out rules according to which no specific evidence of the use of fraudulent means is required to establish the infringements and therefore impose sanctions, whilst still providing the person who has conducted a suspect transaction with sufficient safeguards. The effectiveness of the legal framework in the fight against market abuse is further enhanced by the fact that the draft proposal also allows the King to extend the scope of the prohibitions in order to adapt to rapid developments of the markets. It is furthermore noted that these provisions partly anticipate the Commission proposal for a directive on insider dealing and market manipulation, in particular as the draft proposal appoints the BFC as the single administrative authority competent to handle infringements related to the financial markets in Belgium. The ECB welcomes these provisions, as they enhance investor confidence in the financial markets and therefore contribute to the financial stability of these markets.

text: 7. Moreover, as regards the provisions on market abuse, the ECB notes that the draft proposal exempts the ECB, the NBB and the NCBs of the Eurosystem from the scope of the rules regarding infringements which give rise to administrative sanctions (

text: Article 25

text: §1, 1°). An identical exemption is foreseen for the provisions regarding infringements giving rise to criminal sanctions (

text: Article 40

text: §6, 1°). In line with the Commission proposal for a directive on insider dealing and market manipulation, the exemption could be extended to all the NCBs of the Member States of the European Communities, including those of Member States which have not yet adopted the euro. Moreover, it is noted that the ECB’s opinion on the above mentioned proposal requested that the exemption be extended to cover not only monetary policy and foreign exchange operations, but also operations carried out by the central banks, or on their behalf, relating to foreign reserve management, in order to enable the ESCB to carry out those basic tasks as part of Article 105(2) of the Treaty. In the ECB’s view the exemption included in the draft proposal should be amended accordingly.

text: 8. The provisions contained in Chapters III to V of the draft proposal concerning the reform of the structure of financial supervision in Belgium are broadly welcomed by the ECB. The aim of these provisions is to ensure a flexible and up-to-date supervisory framework taking into account inter alia the principle of sound corporate governance of supervisory authorities and the need for supervisory cooperation and information-sharing. One of the main merits of the new structure perceived by the ECB is the envisaged reinforcement of the cooperation mechanisms among supervisory authorities, and between them and the central bank. The draft proposal rightly points to the need to achieve synergy when addressing the systemic risk to financial stability and (macro) prudential supervision. This synergy is indeed an important condition to allow central banks to adequately monitor risks to financial stability at the national level and to enable the Eurosystem in turn to contribute adequately to the monitoring process from the perspective of an area. In this context, the ECB has four specific observations to make.

text: 9. First, the overall effectiveness of the coordination process. The separation of the financial supervisory institutions is preserved as both the BFC and the Insurance Control Office (ICO) remain separate legal entities distinct from the NBB. However, the new structure entails the establishment of two bodies to promote coordination: the ‘Supervisory Board of the Financial Services Authority’ and the ‘Financial Stability Committee’, each having members from the NBB, the BFC and the ICO. The ECB understands that the establishment of these two bodies is intended to assure effective coordination among the three institutions in light of the dynamic environment in which banks and other financial institutions operate as well as to make the international dimension of supervision possible. The ECB would like to point out that the provisions concerning the two bodies could clarify better their particular advisory and decision-making competencies. This is in order that the effectiveness of the coordination process is not affected by possible uncertainties regarding the precise respective roles of each body. In particular, the competencies and responsibilities of the two bodies as well as their contribution to supervisory cooperation should be clearly distinguishable. It might be worth noting that the word ‘Authority’ in the former’s name could be misleading since no financial services authority as such is intended to be established.

text: 10. Second, the nature of the Financial Stability Committee. The ECB understands that this committee is presented as a platform for discussion and consensus building among the three institutions in matters relating to financial stability. However, some uncertainty could possibly arise over the existence or non-existence of decision-making competencies of this committee from the combined reading of the relevant articles of the draft proposal and the comments on these articles. The articles refer to deliberations of this committee that are without prejudice to the responsibilities of one or the other of the management committees for the issue that is the subject of the deliberations. This provision seems to indicate that the committee’s tasks are short of decision-making functions. On the other hand, in the comments on the articles, the notion of a ‘double majority’, referring to the committee itself and the management boards of the NBB, BFC and ICO, is introduced. This could be interpreted as attributing decision-making competencies to the committee, which could, under specific but possibly unlikely circumstances, result in a blocking of decisions in cases where the committee’s view diverged from that of the management boards of its sponsoring institutions. The ECB would appreciate a clarification of this issue with a view to assuring effective and transparent decision-making processes.

text: 11. Third, the tasks of the central bank. The ECB notes that the matters of common interest which may be subject to the attention of the Financial Stability Committee, in accordance with

text: Article 117

text: §3, relate to the pursuance of the statutory tasks of each of the authorities participating in the committee. Whilst recognising the merit of the establishment of the Financial Stability Committee as a policy coordination body, the ECB considers that it should be clarified by means of a specific provision that the tasks attributed to this committee must not compromise the independent pursuance of the competencies of the central bank, in accordance with its statute. This is relevant, first, with regard to the preservation of the ‘stability of the financial system as a whole’ and ‘crisis management’, which may directly concern certain functions of the central bank. In this context, the ECB would also see value in attributing to the central bank the statutory task of contributing to the stability of the financial system. The explicit inclusion of such a task in the NBB’s Statute and Organic Law would prove beneficial to the institutional framework proposed in the draft proposal. Central banks are in general in an advantageous position to contribute to the pursuance of financial stability, both on an ongoing basis and in crisis management situations, given their insight into monetary and financial market developments and involvement in payment systems and monetary policy operations. This would also clarify the contribution of the central bank to the activities of the Financial Stability Committee. Second, the above consideration is also relevant with regard to the Financial Stability Committee’s task of working on issues relating to the interaction between prudential control and the ‘oversight’ of payment systems. The ECB notes that this should be without prejudice to the exclusive responsibility of the NBB, under its Organic Law, to ensure the proper, efficient and sound operation of clearing and payment systems, which is in line with the provisions laid down in Article 105(2) of the Treaty. Lastly, the ECB considers that the pooling of personnel resources to the activities of the Financial Stability Committee, as foreseen by

text: Article 118

text: , should be done in a manner that does not compromise the central bank’s autonomy in the pursuance of its statutory tasks, including its desirable contribution to the pursuance of financial stability. In this context, it is noted that the draft proposal contains references to future royal decrees, which could be used to introduce far-reaching amendments to the intended institutional structure and its coordination mechanisms. The ECB understands that the Belgian authorities will consult the ECB when such measures are proposed provided that that they fall within the ECB’s fields of competence.

text: 12. Fourth, the corporate governance of the supervisory authorities. The ECB recognises the desirability and necessity of enhancing the BFC’s and ICO’s organisational structures, through the establishment within these two institutions of the ‘Supervisory Board’, the ‘Management Board, the ‘Chairman’ and the ‘Secretary General’. The draft proposal is intended to reshape the current structures in light of the requirements of sound corporate governance to assure efficient, transparent and predictable intra-institutional procedures in the future. To that end, the draft proposal aims at establishing a clear separation between management and controlling tasks as well as a clear allocation of responsibilities regarding inquiries and decisions taken as a result thereof. Against this background, the ECB emphasises the need to insert in the draft proposal a provision according to which the members of the management boards would act freely in their personal capacity. This would avoid any inter-institutional coordination burden prior to decision-making that could arise otherwise.

text: 13. The ECB confirms that it has no objection to the competent national authorities making this opinion publicly available at their discretion. Done at Frankfurt am Main on 24 April 2002. The President of the ECB [signed] Willem F. DUISENBERG


title: Opinion of the European Central Bank of 25 April 2002 at the request of the Spanish Secretary of State for the Economy, Energy and Small and Medium-Sized Enterprises on a draft Royal Decree on the arrangements for the payment of the Banco de España's profits to the Treasury (CON/2002/14)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 25 April 2002 at the request of the Spanish Secretary of State for the Economy, Energy and Small and Medium-Sized Enterprises on a draft Royal Decree on the arrangements for the payment of the Banco de España’s profits to the Treasury (

text: 1. On 26 March 2002 the European Central Bank (ECB) received a request from the Spanish Secretary of State for the Economy, Energy and Small and Medium-Sized Enterprises for an opinion on a draft Royal Decree on the arrangements for the payment of the Banco de España’s profits to the Treasury.

text: 2. The ECB’s competence to deliver an opinion is based on 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 . In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council of the ECB has adopted this opinion.

text: 3. The draft Royal Decree is based on the power granted by the second final provision of Law 12/1998 of 28 April amending the Act of Autonomy of the Banco de España to determine, by way of governmental regulation, the regime for the payment of the Banco de España’s profits to the Treasury.

text: 4. The draft Royal Decree would replace Royal Decree 1746/1999 of 19 November, which applied until the financial year 2001. The provisional nature of Royal Decree 1746/1999 was a precaution, and until such a time as the ECB would adopt a new decision on the allocation of monetary income under Article 32 of the Statute of the ESCB and of the ECB (hereinafter referred to as the 'Statute') after the end of the application of Decision ECB/2000/19 of 3 November 1998 as amended by Decision of 14 December 2000 on the allocation of monetary income of the national central banks of participating Member States and losses of the ECB for the financial years 1999 to 2001 . Royal Decree 1746/1999 was subject to consultation with the ECB. The ECB formulated its opinion on 28 October 1999 . Royal Decree 1746/1999 laid down the following schedule for payment to the Treasury of profits generated and accounted for by the Banco de España: – in November each year, 70% of the profits accrued and recorded until 30 September of the same financial year, – in February each year, 90% of the profits accrued and recorded until 31 December of the preceding financial year, discounting the instalment paid in November, – the remaining profits, following the approval of the accounts of the Banco de España for the financial year by the Government.

text: 5. The draft Royal Decree would extend the application of the rules to the next three financial years (2002, 2003, and 2004) on the basis of experience that is believed to demonstrate the advisability of maintaining the quoted percentages and schedule.

text: 6. The ECB already had an opportunity to comment on the above-mentioned rules in the context of ECB Opinion CON/99/16. In that instance, the ECB found that such rules protect the financial independence of the Banco de España, since they regulate in detail the schedule and amount of the advance payments, without affording any ad hoc discretion to the political authorities. This assessment also applies to the draft Royal Decree extending the application of the rules already examined by the ECB.

text: 7. While the draft Royal Decree would extend the rules already in place by virtue of Royal Decree 1746/1999, these rules need now to be examined in the light of the new regime for the allocation of monetary income of national central banks (NCBs) under Article 32 of the Statute. Decision ECB/2001/16 of 6 December 2001 governs the allocation of monetary income of the national central banks of participating Member States from the financial year 2002 . This Decision must be read in conjunction with Decision ECB/2001/15 of 6 December 2001 on the issue of euro banknotes . Under Article 2 of Decision ECB/2001/15, the ECB and the NCBs shall issue euro banknotes.

text: 8. The remuneration of intra-Eurosystem balances on euro banknotes in circulation resulting from the application of Decision ECB/2001/15 is settled on a quarterly basis, except in 2002 when it will be settled at the end of the year. The allocation of each NCB’s monetary income takes place at the end of the financial year. Under the draft Royal Decree, the Banco de España would pay to the Treasury 70% of the profits accrued and recorded until 30 September of that year; that is, until the end of the third quarter. On the first working day of the following February, the Banco de España would pay to the Treasury 90% of the profits accrued and recorded until 31 December of the previous year; that is, at the end of the financial year. Therefore, the proposed measures would not conflict with the current ECB regime for the issue of euro banknotes and the allocation of monetary income of NCBs of the participating Member States.

text: 9. The ECB notes that the proposed period of three financial years for the application of the draft Royal Decree is considered to be necessary in order to evaluate the application of Decisions ECB/2001/15 and ECB/2001/16.

text: 10. The ECB confirms that it has no objection to the competent national authorities making this opinion publicly available at their discretion. Done at Frankfurt am Main on 25 April 2002. The President of the ECB [signed] Willem F. DUISENBERG


title: Opinion of the European Central Bank of 30 April 2002 at the request of the Finnish Ministry of Finance on a draft proposal concerning the rounding of payments denominated in euro (CON/2002/15)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 30 April 2002 at the request of the Finnish Ministry of Finance on a draft proposal concerning the rounding of payments denominated in euro (

text: 1. On 2 April 2002 the European Central Bank (ECB) received a request from the Finnish Ministry of Finance for an opinion on a draft Government proposal concerning an amendment to the Finnish Act on the rounding of payments denominated in euro (hereinafter referred to as the “proposal”). The proposal intends to amend the Laki euromääräisten maksujen pyöristämisestä 890/2000 (the Finnish Act of 27 October 2000 on the rounding of payments denominated in euro, hereinafter referred to as the “Rounding Act”) by providing that payments effected by a bank card or other payment cards may be rounded to the nearest five cent.

text: 2. The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and first and second indents of

text: on the consultation of the ECB by national authorities regarding draft legislative provisions , as the proposal contains a provision concerning currency matters and means of payment. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council of the ECB has adopted this opinion.

text: 3. According to the Rounding Act, in Finland cash payments denominated in euro are rounded downwards or upwards to the nearest multiple of five euro cent. The principal aim of the Rounding Act is to restrict the use of one and two cent coins for cash payments. The reasoning for the Rounding Act was that the minting of one and two cent coins was not cost-effective, since the production costs of one and two cent coins greatly exceed their face value. Furthermore, the use of these coins would excessively increase the costs for both authorities and businesses in handling and supplying coins.

text: 4. According to the proposal, the current situation in which only cash payments have been rounded has led to uncertainties with regard to the interpretation of the Rounding Act. Therefore it is proposed to extend the rounding rules for euro cash payments to cover also payments effected by bank or other payment cards.

text: 5. Since the ECB was not consulted at the time of adoption of the Rounding Act, the ECB takes the opportunity to provide its opinion not only on the proposal but also on the Rounding Act currently in force in Finland.

text: 6. The ECB notes that the current Rounding Act does not alter the legal tender status of one and two cent coins in Finland. Nevertheless, taking into account the aims and principles of the single European coinage system established by the adoption of the euro, the ECB would like to emphasise that the Rounding Act should in any case not prevent the one and two cent coins from being used as a means of payment, as they are de jure legal tender in the entire euro area. Member States' legislation should not lead to divergent treatment of the euro.

text: 7. Furthermore, the ECB notes that, while the principal aim of the Rounding Act was to restrict the use of one and two cent coins for cash payments, the proposal now intends to extend the rounding rule to cover other payments that are not cash payments, i.e. to payments by bank or other payment cards. The reasoning for the original Rounding Act was that these low denomination coins are impractical and excessively increase the cost of money supply in Finland. The ECB would like to remark that such reasoning does not apply to the rounding of payments effected by a bank or other payment cards. The proposed extension of the rounding rule to payments with bank or other payment cards creates the risk that this rule might not comply with Community law, in particular with

text: Article 2 of Council Regulation (EC) No 974/98 of 3 May 1998

text: on the introduction of the euro (as amended). The ECB considers it important for the competent Community institutions to assess the compatibility of the proposed rule with Community law.

text: 8. Finally, the ECB would welcome a provision in the proposal requiring a clear and comprehensible indication to the consumer fulfilling payment obligations of the rounding pursuant to the Rounding Act. Therefore, the rounding downwards or upwards of the amount due to the nearest multiple of five euro cent should be expressly stated in the invoice, receipt or in another proof of payment.

text: 9. The ECB confirms that it has no objection to the competent national authorities making this opinion publicly available at their discretion. Done at Frankfurt am Main on 30 April 2002. The President of the ECB [signed] Willem F. DUISENBERG


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

title: Opinion of the European Central Bank of 5 June 2002 at the request of the Irish Department of Finance on a draft Central Bank and Financial Services Authority of Ireland Bill, 2002 (CON/2002/16)

text: 1. On 16 April 2002 the European Central Bank (ECB) received a request from the Irish Department of Finance for an opinion on a draft Central Bank and Financial Services Authority of Ireland Bill, 2002.

text: 2. The ECB’s competence to deliver an opinion is based on

text: Article 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 legislative proposal contains provisions concerning a national central bank and rules which materially influence the stability of financial institutions. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, this opinion has been adopted by the Governing Council of the ECB.

text: 3. The legislative proposal contains four noteworthy elements. First, the Central Bank of Ireland would be reorganised and re-named as the Central Bank and Financial Services Authority of Ireland, which would be the legal entity that would qualify as the central bank of Ireland and be a member of the European System of Central Banks. Second, a new ‘body’ called the Irish Financial Services Regulatory Authority (the ‘Regulatory Authority’) would be established as a constituent part of the central bank with responsibility for the supervision of virtually all financial institutions and insurance undertakings in Ireland, as well as the protection of consumers of financial services. Third, while the decision-making body within the central bank for ESCB-related functions would continue to be solely the Governor, the draft legislation provides for the possible establishment of a committee of the central bank’s Board of Directors called the ‘Monetary Committee of the Board’ (or a similar name) to which the Governor, subject to the requirements of the Treaty establishing the European Community and the ESCB Statute, would be required to provide information about, and with the members of which the Governor may discuss, the performance by the Governor of the central bank’s ESCB-related functions. Fourth, the central bank’s residual functions, including the co-ordination of activities of the constituent parts of the central bank and the exchange of information among those parts, would be vested in a reconstituted board of directors, whose 12 members would include the Governor as Chairperson, six members drawn from the Regulatory Authority (including the Chairperson and Chief Executive of the Regulatory Authority and four members appointed by the Minister for Finance after consulting the Minister for Enterprise, Trade and Employment), the Secretary General of the Department of Finance, the Director General of the central bank and three other directors appointed by the Minister for Finance.

text: 4. The legislative proposal would establish the Regulatory Authority as an autonomous authority that will perform the financial supervision functions previously attributed to the central bank and other residual functions relating to the supervision of the Irish financial sector and of financial intermediaries in particular. The ECB welcomes the fact that the new supervisory authority will remain a constituent part of the central bank. While the ECB’s overall assessment of the structure is therefore positive, the ECB has a number of detailed, technical reservations regarding the draft legislation which are set forth in this opinion. These reservations are primarily designed to eliminate any legal risks associated with the independent discharge of the central bank’s ESCB-related tasks. The ECB believes that these reservations can be accommodated without disturbing the overall integrity of the Regulatory Authority as an autonomous supervisory authority operating within the legal structure of the central bank of Ireland.

text: 5. In view of the somewhat complex corporate governance structure for the central bank that the establishment of the Regulatory Authority entails, the ECB is concerned that the governance structure of the central bank might not allow for an effective contribution of central banking functions to prudential supervision tasks, which will be conducted in an independent manner by the Regulatory Authority, or indeed that the pursuance of supervisory tasks might prevail over the central banking perspective. In this regard, the ECB welcomes the series of provisions that should safeguard the contribution of central banking functions. First, the central bank has the function of contributing to the stability of the financial system. In addition, the pursuance of this objective would also be taken into due consideration by the central bank in promoting the development of the financial services industry. Second, the Regulatory Authority has the obligation to consult and obtain the approval of the Governor over matters relating to the stability of the financial system, including the issue, revocation and suspension of a licence or authorisation. In this regard, the Governor, in addition to the Chief Executive of the Regulatory Authority, enjoys crucial powers to authorise central bank employees to investigate the business and carry out on-site inspections of financial institutions. Third, the future Board of the central bank is established as the main forum that will allow close co-operation between central banking and supervisory functions within the central bank. Fourth, the Governor or the Board of the central bank may issue guidelines to the Regulatory Authority as to the principles and policies that the Regulatory Authority is required to implement in performing the central bank’s functions, and the Regulatory Authority would be required to comply with such guidelines. Fifth, upon request the Regulatory Authority would be required to provide the Governor with advice, information and assistance. All these provisions, in the view of the ECB, are fundamental - and should be made the most of in practice – to allow for the continued close involvement of the central banking functions in supervision matters, as is currently the case within the Central Bank of Ireland. Indeed, this involvement is a necessary condition to allow the Eurosystem to contribute adequately to monitoring the risks to financial stability in the euro area. In addition, it also safeguards a smooth co-ordination between the central banking functions exercised at the Eurosystem’s level and the supervisory functions carried out at national level. An additional safeguard to ensure that supervisory tasks do not prevail over the central banking perspective, as referred to below with regard to other issues raised in this opinion, would be that the composition of the central bank’s Board would not be such that as many as half of the Board directors would also be members of the Regulatory Authority.

text: 6. The legislation would establish a structure that is unique within the Eurosystem for the regulation and supervision of financial institutions by setting-up a statutory body enjoying independent functions, but located within the legal personality of a national central bank. In this regard, the ECB would like to make two general points. First, under Article 108 of the Treaty, when exercising the powers and carrying out the tasks and duties conferred upon it by the Treaty and the ESCB Statute, neither a national central bank nor any member of its decisionmaking bodies shall seek or take instructions from, inter alia, any government of a Member State ‘or from any other body’, which would include a statutory body such as the Regulatory Authority. Having particular regard to the unique structure of the Regulatory Authority as a constituent part of the central bank, the ECB considers that it is of critical importance, as required by Article 108 of the Treaty, that the Regulatory Authority should not seek to influence the Governor, in his capacity as the sole member of the central bank’s decisionmaking body responsible for the performance of the central bank’s ESCB tasks. Second, there would be no precedent within the Eurosystem for a national central bank to be accountable or liable for acts performed by a constituent part of the central bank (the Regulatory Authority) which would be outside the control of the central bank’s key decision-making body responsible for the discharge of its ESCB-related tasks (the Governor). Such a structure could pose a risk to a national central bank’s integrity, threatening its overall institutional independence. The potential exposure of a national central bank to liabilities resulting from funding and budgetary decisions for the Regulatory Authority could also be seen as a threat to its financial independence. In addition, the Governor would not have autonomy for staffing decisions in terms similar to those available to the Regulatory Authority. In order to eliminate any legal risks associated with the independent discharge of the central bank’s ESCB-related tasks, one of the following two options could be followed. First, the Governor could be granted an explicit right to oppose any funding, budgetary and staffing decisions which may have implications for the central bank’s independence or which may be deemed otherwise incompatible with the exercise by the Governor of the central bank’s ESCB-related functions. Second, all funding, budgetary and staffing decisions for the Regulatory Authority could be made by a restructured Board of Directors, removing the requirement that as many as half of the Board directors would also be members of the Regulatory Authority.

text: 7. With regard to funding, while the Regulatory Authority may be funded by levies and fees paid by financial institutions subject to the Authority’s supervision, in the event that the funds raised from such levies and fees prove insufficient the central bank’s board of directors may provide funding to the Authority, following approval by the Minister for Finance of the amount of the funds concerned and any conditions to the funding imposed by the central bank’s Board. The draft legislation contains some safeguard provisions which are designed to ensure that this does not impede the proper performance of the central bank’s ESCB-related tasks. First, the Governor, in his capacity as Chairperson of the central bank’s Board of Directors, has a platform from which he may seek to protect the central bank’s independence with respect to any decisions of the central bank’s Board and the Minister for Finance to provide the Regulatory Authority with central bank funds. In practice, however, there may be potential within the central bank’s Board for a conflict of interest between the financial interests of the Regulatory Authority and the independence of the central bank in view of the particular composition of the Board, a majority of whose 12 members would include six members of the Regulatory Authority, including the Chairperson and Chief Executive of the Regulatory Authority, and the Secretary General of the Department of Finance, whose Minister would ultimately be responsible for the approval of any funds provided by the central bank to the Regulatory Authority. Second, the central bank has a legal obligation to perform its functions in a manner consistent with the Treaty and the ESCB Statute. This legal obligation would necessarily apply to the directors when exercising their statutory responsibilities as members of the central bank’s Board of Directors. While the legal risks posed to the central bank’s independence would be reduced by these safeguards, it remains unclear from a legal perspective whether the Governor would enjoy a sufficient degree of control over any decisions by the central bank to fund the Regulatory Authority so as to be able to fully protect the central bank’s institutional and financial independence.

text: 8. With regard to the budget, the Regulatory Authority would be required to prepare an annual statement setting out estimates of its income and expenditure, and the Minister for Finance would be empowered, following consultation of the central bank’s Board, to approve the statement. As noted in the 1998 European Monetary Institute (EMI) Convergence Report, where third parties, and particularly the government, are in a position, directly or indirectly, to exercise influence on the determination of a national central bank’s budget, the relevant statutory provisions should contain a safeguard clause to ensure that this does not impede the proper performance of the national central bank’s ESCB-related tasks. Although both the Minister for Finance and the Regulatory Authority are clearly in a position, directly or indirectly, to exercise influence on the determination of that portion of the central bank’s budget that relates to the Regulatory Authority, the relevant statutory provisions contain some safeguard clauses which are designed to ensure that this does not impede the proper performance of the central bank’s ESCB-related tasks. First, in the case of the Regulatory Authority’s budgetary powers, these safeguards include (a) a required consultation of the Governor of the estimates insofar as they affect the carrying out of the central bank’s obligations with respect to the Irish State’s financial stability or the performance of the central bank’s ESCB-related functions; and (b) the Governor’s power, with respect to the exercise of his functions, to issue guidelines as to policies and principles with which the Regulatory Authority would be required to comply. Second, in the case of the Minister for Finance’s budgetary powers, these safeguards include (a) a required consultation of the central bank’s Board, of which the Governor is Chairperson, before approving the estimates; and (b) a specific legal obligation of the Minister to have regard to the central bank’s functions under the Treaty and the ESCB Statute, which are exclusively vested in the Governor, when approving the estimates. While the legal risks posed to the central bank’s independence would be reduced by these safeguards, it remains unclear from a legal perspective whether the Governor would enjoy a sufficient degree of control over budgetary decisions taken by the Regulatory Authority and the Minister for Finance so as to be able to fully protect the central bank’s institutional and financial independence.

text: 9. With regard to staffing, the central bank’s Board of Directors would be responsible for administering the staff of the central bank and its constituent parts and for administering the provision of accommodation and office equipment with a view to enabling the central bank and its constituent parts to perform their respective functions. However, while the central bank’s Board would be required to appoint such employees of the central bank as it considers necessary for the effective performance of the functions of the central bank and each of its constituent parts, the Regulatory Authority and its Chief Executive would have the same power as the Board to appoint employees of the central bank. In fixing the conditions of employment of such central bank employees appointed by the Chief Executive of the Regulatory Authority the central bank’s Board would be required to obtain the concurrence of the Regulatory Authority or its Chief Executive. While the legal risks posed to the central bank’s operational independence would be reduced by certain safeguards, such as the Governor’s power to issue guidelines and the Regulatory Authority’s legal obligation to perform its functions in a way that is consistent with the Treaty and the ESCB Statute, it remains unclear from a legal perspective whether the Governor would enjoy a sufficient degree of control over staffing decisions taken by the Regulatory Authority and its Chief Executive so as to be able to fully protect the central bank’s operational independence. This risk would cease to exist if the Governor were to be granted comparable staffing powers as the Regulatory Authority and its Chief Executive.

text: 10. The ECB considers that the significant role that the Governor would have with respect to financial stability issues eliminates any legal risks resulting from the separation between the decision-making power and the central bank’s legal accountability with respect to those decisions of the Regulatory Authority which have financial stability implications. However, the ECB notes that provision is made for the appointment within the Regulatory Authority, and therefore as a constituent part of the central bank, of a Registrar of Credit Unions responsible for the registration and supervision of credit unions. The Registrar would not be subject to the control or direction of the Regulatory Authority. While the Regulatory Authority would be required to issue guidelines to the Registrar with respect to consultation and co-operation with the Governor, it is unclear whether the Governor would enjoy a sufficient degree of control over the supervisory decisions of the autonomous Registrar in order to protect the central bank’s independence. The legislation should explicitly clarify that the supervisory decisions of the Registrar of Credit Unions, as a constituent part of the central bank, would be subject to the same degree of financial stability oversight by the Governor as is proposed for the Regulatory Authority.

text: 11. The draft legislation facilitates the possible establishment by the central bank’s Board of Directors of a committee of the Board called the ‘Monetary Committee of the Board’ (or a similar name) consisting of those Board members who are not members of the Regulatory Authority, to whom the Governor, subject to the requirements of the Treaty and the ESCB Statute, would be required to provide information about, and with whom the Governor may discuss, the performance of the central bank’s ESCB-related functions. In this regard, the ECB takes particular note that the draft legislation would not authorise the Board to delegate any function that must be performed by the Governor. Given that the Governor’s ESCB-related tasks include monetary policy, one might question whether the statutory characterisation of a board committee as a ‘Monetary Committee’ might create the misleading impression that such a committee enjoys an advisory role with respect to the performance by the Governor of the central bank’s monetary policy tasks. The ECB would therefore like to express its clear understanding that the members of such a ‘Monetary Committee’ would, in practice, enjoy no role with respect to the performance of the central bank’s ESCB-related functions. As is clarified in the EMI’s 1998 Convergence Report, dialogue between the Governor, in his capacity as the sole decision-making body of the central bank responsible for the performance of the central bank’s ESCB-related tasks, and the members of such a ‘Monetary Committee’, even when based on such statutory obligations to provide information and exchange views, would not be incompatible with the Treaty, provided that (a) this does not result in interference with the independence of the Governor; (b) the ECB’s competences and accountability at the Community level as well as the special status of the Governor as a member of the ECB’s decision-making bodies are respected; and (c) confidentiality requirements resulting from the ESCB Statute are respected.

text: 12. As is currently the case, the Director General of the central bank would be required to carry out the responsibilities of the Governor for the performance of the central bank’s ESCB-related functions whenever the Governor is unable to carry out those responsibilities, while any one of the central bank directors may be appointed to act as Governor to carry out the other non-ESCB related responsibilities of the Governor. It is therefore necessary to explicitly clarify that where the Governor is unable to carry out certain responsibilities which are vested in the Governor in order to ensure the proper performance of the central bank’s ESCB-related functions, these responsibilities would be carried out by the Director General, in his capacity as the central bank’s substitute decision-making body for the performance of ESCB-related tasks. These responsibilities include all of the Governor’s powers and functions in connection with (a) the financial stability of the State’s financial system; (b) the issuance to the Regulatory Authority of guidelines as to the policies and principles that the Authority is required to implement; (c) decisions by the central bank to fund the Regulatory Authority; (d) the establishment of the Regulatory Authority’s annual estimates of its income and expenditure; (e) requests for advice, information and assistance from the Regulatory Authority; and (f) the Governor’s responsibility to ensure that the resources of the central bank allocated for carrying out the central bank’s ESCB-related responsibilities are used effectively, efficiently and economically.

text: 13. The ECB notes that the explicit clarification in the draft legislation of the Governor’s responsibilities in connection with the holding and managing the foreign reserves held by the central bank is consistent with the exclusive vesting of the central bank’s ESCB-related functions in the Governor, since the basic tasks to be carried out through the ESCB under Article 105(2) of the Treaty include the holding and management of the official foreign reserves of the Member States. In a similar manner, the ECB welcomes the provisions of the draft legislation whereby the Governor is responsible for promoting the efficient and effective operation of payment and settlement systems as reflecting the ESCB’s related function regarding clearing and payment systems provided for in the Treaty and the Statute. Regarding the identification in the draft legislation of the objectives of the central bank in performing its ESCB functions, two drafting points are noted. First, under Article 105(5) of the Treaty the ESCB’s required contribution to the stability of the financial system does not contain any geographical connotations, and the specific reference to the stability of the ‘European’ financial system should be amended accordingly. Second, under Article 105(1) of the Treaty the ESCB’s objective of supporting the general economic policies in the Community is stated to be ‘without prejudice to’ (rather than ‘without affecting’) the objective of price stability. These two drafting points are adequately addressed in the existing wording of Section 6(2) and (6) of the Central Bank Act, 1942, as amended.

text: 14. The ECB notes that the list of enactments and regulations under which the Regulatory Authority is to perform functions of the central bank should not include any ESCB-related functions vested in the Governor, such as certain of the functions of the central bank under (a) section 18 of the Central Bank Act, 1971, as amended, which, inter alia, facilitates the collection by the ECB, assisted by the central bank, of the necessary statistical information directly from economic agents in order to undertake the tasks of the ESCB, in accordance with Article 5 of the ESCB Statute; and (b) Section 23 of the Central Bank Act, 1971, as amended, which, inter alia, facilitates the application by the central bank of the ECB’s requirements that credit institutions hold minimum reserves on accounts with the ECB and national central banks in pursuance of monetary policy objectives, in accordance with Article 19.1 of the ESCB Statute. It is recognised that the Regulatory Authority must be able to exercise the central bank’s functions under Section 18 in order to collect information and under Section 23 in order to apply specified ratios for purposes of the exercise of the Regulatory Authority’s own functions.

text: 15. The ECB notes the proposed repeal of section 7(1)(mm) of the Central Bank Act, 1942, under which it is stated to be lawful for the central bank to transfer assets, income or liabilities to the ECB where required under the ESCB Statute. This repeal should not affect the obligations of the central bank under Chapter VI of the ESCB Statute regarding the financial provisions of the ESCB.

text: 16. While the draft legislative proposal does not propose to repeal Section 11 of the Central Bank Act, 1998, pursuant to which the central bank’s accounts may be audited in accordance with Article 27 of the ESCB Statute, the proposed repeal of the related Section 19 of the Central Bank Act, 1989 would appear to have rendered Section 11 of the 1998 Act redundant. It is therefore suggested that a new section be inserted in the provisions of the draft legislative proposal which restate Section 19 of the 1989 Act to clarify that the central bank’s accounts may, in addition to being audited by the Comptroller and Auditor General, be audited by independent external auditors recommended by the ECB in accordance with Article 27 of the ESCB Statute. A corresponding revision to the provisions permitting the disclosure of information concerning matters arising in connection with performance of the central bank’s functions to such independent external auditors would also be necessary.

text: 17. Finally, the ECB notes that the draft legislative proposal contains a good deal of restatement and reordering of existing Irish legislation relating to the central bank’s functions and powers. While the ECB welcomes this partial consolidation of Ireland’s central bank statutes, and most particularly the Central Bank Act, 1942, the ECB notes that the provisions of Irish law relating to the basic structure of Ireland’s central bank and the performance of its ESCB-related tasks would, following enactment of the draft legislative proposal, be contained in a number of different laws, including the draft legislative proposal, the surviving provisions of the original Central Bank Act, 1942, a number of provisions in the Central Bank Acts, 1971 and 1989, the surviving provisions of the Central Bank Act, 1998, a number of provisions of the Economic and Monetary Union Act, 1998 (as amended by the Finance Act, 2002), as well as a number of additional laws concerning currency matters. The lack of a consolidated central bank statute creates a structure for Ireland’s central bank that is somewhat lacking in transparency. Legal clarity and transparency would suggest that at the first suitable opportunity the Irish Government should undertake a consolidation exercise. In addition, a full consolidation of Ireland’s central bank statutes would greatly assist the ECB in fulfilling its ongoing task of responding to consultations from the Irish authorities on draft legislation within the ECB’s field of competence, as well as of ensuring that Irish legislation, including the statutes of Ireland’s central bank, are compatible with the Treaty and the ESCB Statute. In this regard it is noted that Ireland’s central bank statutes are the only central bank statutes in the Eurosystem which have not been consolidated.

text: 18. The ECB would appreciate being provided, for information purposes, with any amendments affecting any of the issues addressed in this opinion. In addition, the ECB stands ready to provide further comments on the draft legislation prior to enactment by the Oireachtas. Done at Frankfurt am Main on 5 June 2002. The President of the ECB [signed] Willem F. DUISENBERG


title: Opinion of the European Central Bank of 7 June 2002 at the request of the Banque centrale du Luxembourg on a draft regulation on the designation of the competent national authorities with regard to counterfeiting (CON/2002/17)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 7 June 2002 at the request of the Banque centrale du Luxembourg on a draft regulation on the designation of the competent national authorities with regard to counterfeiting (

text: 1. On 21 May 2002 the European Central Bank (ECB) received a request from the Banque centrale du Luxembourg (BCL) for an opinion on a draft Grand Ducal regulation on the designation of the authorities referred to in Article 8 of the Law of 13 January 2002 concerning (1) the approval of the International Convention for the Suppression of Counterfeiting Currency and the Protocol thereto, signed at Geneva on 20 April 1929 ; and (2) the amendment of certain provisions of the Criminal Code and the Code of Criminal Procedure (hereinafter the ‘draft regulation’). The aim of the draft regulation is to ensure compliance with

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

text: laying down measures necessary for the protection of the euro against counterfeiting (hereinafter the ‘Council Regulation’).

text: 2. The ECB’s competence to deliver an opinion is based on the second indent of Article 105(4) of the Treaty establishing the European Community, and on the first and third indents of

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

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , since the draft regulation contains provisions concerning both currency matters and the BCL. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council of the ECB has adopted this opinion.

text: 3. The Council Regulation required Member States, inter alia, to designate competent national authorities for the identification of counterfeit euro banknotes and coins, the gathering and analysis of technical and statistical data relating to counterfeit euro banknotes and coins, and the gathering of data relating to counterfeiting of the euro for their subsequent analysis, in accordance with its

text: Article 2

text: (b). Such competent national authorities are to comprise: (1) a National Analysis Centre (NAC) for counterfeit euro banknotes, designated or established by Member States in agreement with the ECB, as set forth in Article 4 of the Council Regulation; (2) a Coin National Analysis Centre (CNAC) for counterfeit euro coins, in accordance with Article 5 of the Council Regulation; and (3) a national central office, as provided for by Article 12 of the Geneva Convention, charged with the gathering of data relating to counterfeiting of the euro, and their submission for analysis.

text: 4. The ECB notes that the draft regulation ensures compliance with the provisions of the Council Regulation, which applies from 1 January 2002, in that it provides that: (1) the national central office, the judicial police authorities and the BCL are designated as the competent national authorities for Luxembourg, with the two latter bodies being jointly responsible for the identification of counterfeit euro banknotes and coins; (2) the BCL will be the NAC and CNAC for Luxembourg. The BCL will be responsible for the gathering and analysis of technical and statistical data relating to counterfeit euro banknotes and coins; (3) the national central office will be the competent authority responsible for the gathering of data relating to counterfeiting of the euro and their subsequent submission for analysis. The national central office and the BCL will enter an agreement whereby the BCL will put at the disposal of the national central office its technical expertise concerning counterfeiting; The Minister for the Treasury and the Budget and the Minister of Justice will be responsible for the implementation of the Grand Ducal regulation.

text: 5. The ECB would like to highlight that under Article 8 of the Council Regulation Member States are to ensure that centralisation of information on counterfeiting at national level in the national central office is effected with a view to its being forwarded to Europol through the Europol national unit. Furthermore Member States are to take all measures necessary to ensure the exchange of information between the national central office and the Europol national unit.

text: 6. The ECB would finally like to highlight that pursuant to Article 4 of the Council Regulation Member States are to designate or establish their respective NACs in agreement with the ECB. Based on a formal communication on the envisaged designation of the BCL as the NAC for Luxembourg, which the Luxembourg Ministry for the Treasury and the Budget transmitted to the Secretariat of the Economic and Financial Committee on 12 December 2001, with the request that the communication be forwarded both to the ECB and the Commission, the ECB has already granted on 22 January 2002 its agreement to the envisaged designation by means of a letter signed by the President.

text: 7. The ECB confirms that it has no objection to the competent national authorities making this opinion publicly available at their discretion. Done at Frankfurt am Main on 7 June 2002. The President of the ECB [signed] Willem F. DUISENBERG