EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 10 March 2006  
at the request of Lietuvos bankas 
on a draft law supplementing Article 45 of the Law on the securities market 
(CON/2006/16) 
 
1. On 20 January 2006 the European Central Bank (E CB) received a request from Lietuvos bankas for 
an opinion on a draft law supplementing Article 45 of the Law on the securities market (hereinafter 
the ‘draft law’). The ECB’s competence to deliver an opinion is based on the third and fifth indents 
of Article 2(1) of Council Decisi on 98/415/EC of 29 June 1998 on th e consultation of the European 
Central Bank by national authorities re garding draft legislative provisions1, as the draft law relates 
to Lietuvos bankas and securities settlement system s. 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. 
2. The ECB understands that the main objective of the draft law is to provide a possibility for 
Lietuvos bankas to join the correspondent centr al banking model (CCBM). The draft law is 
intended to enter into force on adoption of the euro in Lithuania. In particul ar, the draft law amends 
Article 45 of the Law on the securities market by expressly providing for cases where securities 
held with the Lithuanian Central Securities De pository (LCSD) are pledged or transferred under 
repurchase agreements to the ECB or the national central banks (NCBs). The draft law also provides that the accounts in which book-entries ar e made will be opened in the name of Lietuvos 
bankas and that Lietuvos bankas may give instruc tions to the LCSD regarding the disposition of 
securities in these accounts.  
3. The CCBM, which has been established and develope d by the European System of Central Banks 
(ESCB), enables NCBs to hold collateral on behalf of other ESCB members. In this context, the 
ECB welcomes the proposed amendment to Article 45 of the Law on the securities market which will prove useful for securities held with the LCSD  as collateral for Eurosystem credit operations.  
4. With respect to collateralisation techniques in th e draft law, Lietuvos bankas may consider broader 
wording covering all possible title transfer techniques, as well as outright transfer of securities which may be used in the CCBM framework, a nd not only pledge and repurchase agreements 
which are currently mentioned in Article 1(2) of the draft law.  
                                                     
 
1  OJ L 189, 3.7.1998, p. 42. 
2 5. The ECB understands that the scope of the draft law is restricted to securities. Lietuvos bankas may 
consider evaluating whether the Lithuanian legal framework would allow for the handling of other 
assets eligible as collateral for Eurosystem  credit operations, e.g. bank loans.  
6. The ECB also understands that the draft law does not  intend to regulate the possibility to transfer 
securities to the ECB and NCBs through direct links between the LCSD and other securities 
settlement systems. However, the dr aft law may appear to imply that the use of direct links is not 
possible. In order to avoid any misinterpretation, the draft law should contain broader wording clarifying that securities may also be transferred by using such links.  
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 10 March 2006. 
 
[signed]  
 
The President of the ECB 
Jean-Claude TRICHET