# Decision (EU) 2015/2464 of the European Central BankShow full title

Decision (EU) 2015/2464 of the European Central Bank of 16 December 2015 amending Decision (EU) 2015/774 on a secondary markets            public sector asset purchase programme (ECB/2015/48)         

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U.K.

# Decision (EU) 2015/2464 of the European Central Bank

# of 16 December 2015

# amending Decision (EU) 2015/774 on a secondary markets public sector asset purchase programme (ECB/2015/48)

THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,

Having regard to the Treaty on the Functioning of the European Union, and in particular the first indent of Article 127(2)                           thereof,                        

Having regard to the Statute of the European System of Central Banks and of the European Central Bank, and in particular to                           the second subparagraph of Article 12.1 in conjunction with the first indent of Article 3.1, and Article 18.1 thereof,                        

Whereas:

(1)On 4 March 2015, the Governing Council adopted Decision (EU) 2015/774 of the European Central Bank (ECB/2015/10)(1) which established a secondary markets public sector asset purchase programme (hereinafter the ‘PSPP’). By establishing the                              PSPP, the Governing Council expanded the existing asset purchase programmes to include public sector securities. Alongside                              the third covered bond purchase programme (hereinafter the ‘CBPP3’) and the asset-backed securities purchase programme (hereinafter                              the ‘ABSPP’), the PSPP is part of the expanded asset purchase programme (hereinafter the ‘APP’). The APP aims to further enhance                              the transmission of monetary policy, facilitate the provision of credit to the euro area economy, ease borrowing conditions                              for households and firms and contribute to returning inflation rates to levels closer to 2 %, consistent with the ECB's primary                              objective of maintaining price stability.

(2)On 3 December 2015, the Governing Council decided, in line with its mandate to ensure price stability, to revise certain of                              the PSPP's design features, to secure a sustained adjustment in the path of inflation towards levels that are below, but close                              to 2 %, over the medium term. The revisions are in line with the Governing Council's monetary policy mandate and duly reflect                              risk management considerations.

(3)Accordingly, in order to achieve the PSPP's objectives, the Governing Council decided to extend the intended horizon of purchases                              under the PSPP until the end of March 2017, or beyond, if necessary, and in any event until the Governing Council sees a sustained                              adjustment in the path of inflation that is consistent with its aim of achieving inflation rates below, but close to, 2 %                              over the medium term. The Governing Council decided to extend the intended horizon of the purchases under the CBPP3 and the                              ABSPP accordingly.

(4)The Governing Council also decided that, in order to enhance the flexibility of the PSPP and thereby support the continued                              smooth implementation of purchases at least until its intentional end date, euro-denominated marketable debt instruments issued                              by regional and local governments located in the euro area will be eligible for regular purchases under the PSPP by the national                              central banks of the jurisdiction in which the issuing entity is located.

(5)The Governing Council also decided to reinvest the principal payments of the securities purchased under the APP as the underlying                              securities mature, for as long as necessary, thus contributing to favourable liquidity conditions and to an appropriate monetary                              policy stance.

(6)With regard to debt securities referred to in Article 3(2)(c) of Decision (EU) 2015/774 (ECB/2015/10), different issuer and                              issue share limits apply. These limits will be set by the Governing Council taking due account of risk management and market                              functioning considerations.

(7)Therefore, Decision (EU) 2015/774 (ECB/2015/10) should be amended accordingly,

HAS ADOPTED THIS DECISION:

## Article 1U.K.Amendments

Decision (EU) 2015/774 (ECB/2015/10) is amended as follows:

In Article 3, paragraph 1 is replaced by the following:

‘1.Subject to the requirements laid down in Article 3, euro-denominated marketable debt securities issued by central, regional                                    or local governments of a Member State whose currency is the euro, recognised agencies located in the euro area, international                                    organisations located in the euro area and multilateral development banks located in the euro area shall be eligible for purchases                                    by the Eurosystem central banks under the PSPP. In exceptional circumstances, where the envisaged purchase amount cannot be                                    attained, the Governing Council may decide to purchase marketable debt securities issued by other entities located in the                                    euro area, in accordance with the conditions laid down in paragraph 4.’;                           

in Article 3, paragraph 3 is replaced by the following:

‘3.In order to be eligible for purchases under the PSPP, debt securities, within the meaning of paragraphs 1 to 2, shall have                                    a minimum remaining maturity of 2 years and a maximum remaining maturity of 30 years at the time of their purchase by the                                    relevant Eurosystem central bank. In order to facilitate smooth implementation, marketable debt instruments with a remaining                                    maturity of 30 years and 364 days shall be eligible under the PSPP. National central banks shall also carry out substitute                                    purchases of marketable debt securities issued by international organisations and multilateral development banks if the envisaged                                    amounts to be purchased in marketable debt securities issued by central, regional or local governments and recognised agencies                                    cannot be attained.’;                           

in Article 3, paragraph 4 is replaced by the following:

‘4.Eurosystem central banks may, in exceptional circumstances, propose to the Governing Council public non-financial corporations                                    located in their jurisdiction as issuers of marketable debt instruments to be purchased as substitutes in case the envisaged                                    amounts to be purchased in marketable debt instruments issued by central, regional or local governments and recognised agencies                                    located in their jurisdiction cannot be attained.                           

The proposed public non-financial corporations shall at least fulfil both of the following criteria:                           
                -  be a “non-financial corporation” as defined in Regulation (EU) No 549/2013 of the European Parliament and of the Council(2),                                  
                -  be a “public sector entity”, meaning an entity within the meaning of Article 3 of Council Regulation (EC) No 3603/93(3).                                  

Following approval by the Governing Council, euro-denominated marketable debt instruments issued by such public non-financial                                 corporations located in the euro area which comply with: (i) the eligibility criteria for marketable assets as collateral                                 for Eurosystem credit operations, as per Part Four of Guideline (EU) 2015/510 of the European Central Bank (ECB/2014/60)(4); and (ii) the requirements in paragraphs 2 and 3 shall be eligible for substitute purchases under the PSPP.’;                           

Article 5 is replaced by the following:

### ‘Article 5Purchase limits

1.Subject to Article 3, an issue share limit per international securities identification number (ISIN) shall apply under the                                    PSPP to marketable debt securities fulfilling the criteria laid down in Article 3, after consolidating holdings in all of                                    the portfolios of the Eurosystem central banks.                           

As of 10 November 2015, the issue share limit is set at 33 % per ISIN. As an exception, the issue share limit is set at 25                                 % per ISIN for eligible marketable debt securities containing a collective action clause (CAC) that differs from the euro                                 area model CAC elaborated by the Economic and Financial Committee and implemented by the Member States in accordance with                                 Article 12(3) of the Treaty establishing the European Stability Mechanism, but will be increased to 33 %, subject to verification                                 on a case-by-case basis that a holding of 33 % per ISIN would not lead the Eurosystem central banks to reach blocking minority                                 holdings in orderly debt restructurings.                           

2.Under the PSPP, an aggregate limit of 33 % of an issuer's outstanding securities shall apply to the universe of eligible marketable                                    debt securities in respect of the maturities defined in Article 3, after consolidating holdings in all of the portfolios of                                    the Eurosystem central banks.                           

3.With regard to debt securities referred to in Article 3(2)(c), different issuer and issue share limits will apply. These limits                                    will be set by the Governing Council taking due account of risk management and market functioning considerations.’;                           

in Article 6, paragraph 1 and 2 are replaced by the following:

‘1.Of the total book value of purchases of marketable debt securities eligible under the PSPP, 12 % shall be purchased in securities                                    issued by eligible international organisations and multilateral development banks, and 88 % shall be purchased in securities                                    issued by eligible central, regional or local governments and recognised agencies or, where applicable pursuant to Article                                    3(4) of this Decision, in securities issued by eligible public non-financial corporations. This allocation is subject to revision                                    by the Governing Council. Purchases of debt securities issued by eligible international organisations, multilateral development                                    banks and regional and local governments shall be conducted by NCBs only.                           

2.The NCBs' share of the total book value of purchases of marketable debt securities eligible under PSPP shall be 92 %, and                                    the remaining 8 % shall be purchased by the ECB. The distribution of purchases across jurisdictions shall be according to                                    the key for subscription of the ECB's capital as referred to in Article 29 of the Statute of the ESCB.’.                           

## Article 2U.K.Entry into force

This Decision shall enter into force on 1 January 2016.

Done at Frankfurt am Main, 16 December 2015.

*The President of the ECB*                            

Mario Draghi                            

1

Decision (EU) 2015/774 of the European Central Bank of 4 March 2015 on a secondary markets public sector asset purchase programme                              (ECB/2015/10) (OJ L 121, 14.5.2015, p. 20).                           

2

Regulation (EU) No 549/2013 of the European Parliament and of the Council of 21 May 2013 on the European system of national                              and regional accounts in the European Union (OJ L 174, 26.6.2013, p. 1).                           

3

Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the prohibitions referred                              to in Articles 104 and 104b(1) of the Treaty (OJ L 332, 31.12.1993, p. 1).                           

4

Guideline (EU) 2015/510 of the European Central Bank of 19 December 2014 on the implementation of the Eurosystem monetary                              policy framework (ECB/2014/60) (OJ L 91, 2.4.2015, p. 3).’;