Opinion of the European Central Bank of 15 September 2011 on the categories of intermediaries authorised to maintain accounts for dematerialised securities denominated in foreign currency or units of account (CON/2011/71)

OPINION OF THE EUROPEAN CENTRAL BANK of 15 September 2011 on the categories of intermediaries authorised to maintain accounts for dematerialised securities denominated in foreign currency or units of account (CON/2011/71) Introduction and legal basis

On 15 August 2011, the European Central Bank (ECB) received a request from the Belgian Ministry of Finance for an opinion on a draft royal decree amending the Royal Decree of 14 June 1994 laying down the rules for maintaining accounts for dematerialised securities denominated in foreign currency or units of account (hereinafter the ‘draft royal decree’). The ECB’s competence to deliver an opinion is based on Article 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the fifth indent of Article 2(1) of Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft legislation concerns settlement systems. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

1. Purpose of the draft royal decree

1.1 The draft royal decree aims to improve the marketability of dematerialised Belgian public debt securities denominated in foreign currency or units of account by increasing the number of intermediaries authorised to maintain accounts for such securities . These securities are held in the securities settlement system administered by the Nationale Bank van België/Banque Nationale de Belgique (NBB), the NBB-SSS . The two new categories of intermediaries that will be authorised

to maintain accounts for these securities were selected for their ability to process cash flows in foreign currency or in units of account . 1.2 In addition, the concept of ‘foreign currencies’ defining the scope of the Royal Decree of 14 June 1994 will cover the ‘foreign currencies for which the ECB publishes daily foreign exchange reference rates’ , instead of referring to the monetary units of the members of the Organisation for Economic Co-operation and Development. These daily foreign exchange reference rates will also be used for calculating the euro value of the securities . Finally, the draft royal decree will reflect in the Royal Decree of 14 June 1994, the abolition of the principle of ‘direct and single access’ to the NBB-SSS that entered into force in 2006 already .

2. General observations

The ECB welcomes the draft royal decree as it will allow for a much wider range of financial institutions participating in NBB-SSS to maintain accounts for dematerialised Belgian public debt securities denominated in foreign currency or units of account. In June 2011, a TARGET2-Securities (T2S) taskforce had indeed already indicated that the restricted categories of NBB-SSS participants authorised to maintain accounts for such securities were obstacles to smooth cross-CSD settlement in T2S . In addition, this development is in line with the recommendation issued by the European System of Central Banks (ESCB) and the Committee of European Securities Regulators (CESR) concerning access (recommendation 14) , which states that rules and requirements restricting access to securities settlement systems should be aimed solely at controlling risk.

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

Done at Frankfurt am Main, 15 September 2011. [signed]

The Vice-President of the ECB

Vítor CONSTÂNCIO