EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 3 August 2006 
at the request of the Belgian Ministry of Finance 
on a draft law amending the Organic Statute of the Nationale Bank van België/ 
Banque Nationale de Belgique 
(CON/2006/40) 
 Introduction and legal basis
 
On 8 May 2006 the European Central Bank (ECB) r eceived a request from the Belgian Ministry of 
Finance for an opinion on a draft law amending Article  7 of the Law of 22 February 1998 establishing the 
Organic Statute of the Nationale Ba nk van België/Banque Nationale de Be lgique (hereinafter the ‘draft 
law’). 
The ECB’s competence to de liver an opinion is based on Article 105(4) of the Treaty establishing the 
European Community and on the fifth and sixth indent s of Article 2(1) of Council Decision 98/415/EC of 
29 June 1998 on the consultation of the European Ce ntral Bank by national authorities regarding draft 
legislative provisions1, as the draft law concerns the conditions under which claims 
(schuldvorderingen /créances ) can be pledged to the Nationale Bank van België/Banque Nationale de 
Belgique (NBB) as collateral for the NBB’s credit ope rations. In accordance with the first sentence of 
Article 17.5 of the Rules of Procedure of the Eur opean Central Bank, the Governing Council has adopted 
this opinion. 
 1. Purpose of the draft law The purpose of the draft law is to in troduce in Belgian law a specific t echnique for pledging claims to the 
NBB, thereby strengthening the protection of the NBB’ s rights as a pledgee without this protection being 
dependent on ex ante notification of the pledge to the debtor. This protection should be viewed in the 
light of the requirement under primary Community la w that Eurosystem credit operations are based on 
adequate collateral (Article 18.1 of the Statute of  the European System of Central Banks and of the 
European Central Bank). As a result, the ECB has to ensure that appropriate legal rules and/or other 
measures exist. The ECB understands that the draft la w will, in this respect only, replace the general 
Belgian regime applicable to pledges (see paragraph 2.2 below). The technique introduced by the draft 
law consists of entering the pledge in a register held by either the NBB or a third party authorised by the 
                                                           
1  OJ L 189, 3.7.1998, p. 42. 
 
2 NBB (hereinafter the ‘register’). This entry results, amongst other things, in the pledge being effective 
against third parties (erga om nes tegenwerpelijk/opposable erga omnes ) except the debtor of the pledged 
claim, to whom the pledge is gene rally not notified ex ante (see para graph 3.3 below). The register may 
only be consulted by third par ties who are considering accepting in rem rights (including in rem security 
rights) over claims which are eligible to be pledge d to the NBB. Only third parties who are entitled to 
consult the register are deemed by law to be acting in  bad faith if they seek to exercise their right to a 
claim that has already b een pledged to the NBB and entered in the register. The ECB understands that 
other third parties are only deemed to be acting in ba d faith if they have actua l knowledge of the pledge 
(e.g. the pledgor).  
 2. General observations 2.1 The pledging technique in the draft law enables the NBB to avoid certain legal risks relating to 
issues of priority that might arise under the ge neral Belgian regime applicable to pledges (see 
paragraph 2.2 below). The ECB therefore welcom es the draft law. The draft law will become 
particularly relevant when the NBB accepts cr edit claims meeting the Eurosystem eligibility 
criteria as collateral following the introduction of  a single list of eligible collateral for the 
Eurosystem’s credit operations, which will include  credit claims (see also the explanatory 
memorandum accompanying the draft law, p. 1) from 1 January 2007
2. 
2.2 The present opinion is restricted to the draft la w and does not cover claims collateralisation rules 
under the laws of other Member States that have  adopted the euro (hereinafter ‘participating 
Member States’). The ECB nonetheless understands that Belgium is one of the participating 
Member States in which claims can be validly co llateralised (e.g. through a pledge) without such 
validity being dependent on ex ante notification to , or recognition by, the debtor. Under the general 
Belgian regime applicable to pledges, the mere conclusion of the pledge agreement renders this 
pledge effective against all third parties, except against the debtor of the pledged claim (against 
whom the pledge is only effective if the pledge h as been either notified to the debtor or the latter 
has recognised it). As a consequence, any debtor  which has not been notified and which has not 
recognised the pledge can validly continue to pay th e original creditor, provided that the debtor is 
acting in good faith (i.e. without having actual knowledge of the pledge  through other means). 
Such notification or recognition is also relevant in  determining the priority of claims in the event 
that two or more parties, acting in good faith, seek to exercise conflicting rights to the pledged 
claim (e.g. because the claim has been re-pledge d or because ownership of the claim has been 
transferred), as the party which first notified the ple dge to the debtor or to whom the debtor first 
recognised the pledge will have priority. This no tification or recognition also determines whether 
the debtor, acting in good faith, is  entitled to diminish or extinguish its debt through set-off or 
                                                           
2  See the document entitled ‘Decisions ta ken by the Governing Council of the ECB (i n addition to decisions setting interest 
rates)’ for July 2005 and the related E CB press release of 22 July 2005 entitled  ‘Eurosystem collateral framework: 
Inclusion of non-marke table assets in the Single List’, available on the E CB’s website at www.ecb.int. 
 
3 another similar mechanism. Thus, while debtor not ification might, in participating Member States 
such as Belgium, not be a statutory requirement fo r the validity of collateralisation of a claim, such 
notification may nonetheless be relevant for the va lue and effectiveness of the rights of the party 
that the collateral is intended to protect (in the present case the NBB). 
2.3 In view of the diversity of national law rega rding debtor notification, the consequences of an 
absence of such notification and the methods to address these consequences3, the ECB does not 
require such notification in participating Member States where ex ante notification is not required 
for collateralisation of a claim to be valid. The pledging technique in the draft law guarantees the 
priority of the NBB’s rights in relation to  a pledge that has been registered over in rem (security) 
rights that third parties subsequently establish on this pledged claim, since the pledging technique in the draft law deems such third parties by law to  be acting in bad faith. However, given that the 
right to consult this register is restrict ed to third parties who intend to accept ‘an in rem (security) 
right’ on a claim that is eligible to be pledged to the NBB, the ECB understands that, for instance, 
the substitution of the debtor ( delegatie /délégation ) does not fall within this category. 
Consequently, as this technique and other similar techniques may still affect the rights of the NBB, 
it might be necessary to address this issue through other rules (e.g. contractual arrangements) or techniques. Also, it is not clear whether under the pledging technique in the draft law, a third party which had acquired an in rem right to a claim which was subsequently pledged to the NBB and 
entered in the register would have priority in the event that the thir d party’s right was notified to, or 
recognised by, the debtor after the NBB’s pledge was entered in the register. The ECB questions 
whether, in this specific case, making priority of the third party’s right dependent on its notification 
to, or recognition by, the debtor before the entry of the NBB’s pledge in the register might not provide more legal certainty than a ‘declaration of  honour’ by the credit institution (pledgor) to the 
NBB of the absence of such a right. The ECB unders tands that there is a similar rule under the 
general Belgian regime applicable to pledges. Fi nally, the ECB notes that the benefit of the draft 
law is currently limited to claims pledged to the NBB and therefore does not apply to claims 
pledged under the pledging technique in the draft law to another Eurosystem central bank. Such an 
extension could, for instance, be relevant for th e cross-border collateralisation of claims in the 
framework of Eurosystem credit operations if the NBB acts as correspondent agent for 
another Eurosystem central bank. In any event, the ECB understands that, even if the benefit of 
the draft law remains only applicable to claims pledged to the NBB, the general Belgian regime 
applicable to pledges, i.e. with ex ante no tification not being a precondition for the pledge’s 
validity (see paragraph 2.2 above), will still allow such cross-border collateralisation. 
2.4 While debtor notification might not be required for collateralisation of a claim to be valid under the 
general Belgian regime applicable to pledges (s ee paragraph 2.2 above), it might still affect the 
                                                           
3  See also the abovementioned document  entitled ‘Decisions taken by the Govern ing Council of the ECB (in addition to 
decisions setting interest rates)’ for July 2005 and related ECB press release of 22 July 2005, the latter under the 
subheading ‘Additional legal requirements’. 
 
4 value and effectiveness of the pledgee’s rights. I ndeed, the question of whether or not the debtor 
can validly pay its creditor (the pledgor) or a third party (e.g. in the event of a subsequent pledge of the same claim) or validly diminish or even extinguish its debt through set-off depends on whether 
and when the pledge has been notified to, or r ecognised by, the debtor. The pledging technique in 
the draft law does not entirely eliminate the possib ility of such payment and set-off, as Article 6 of 
the draft law only contains a prohibition on set-off by the debtor and an obligation for the debtor to pay the claim to the NBB in the event of the inso lvency of the credit institution that pledged the 
claim to the NBB (see also paragraph 3.4 below). The NBB would be fully legally protected if the 
pledge would, by the mere fact of registration, al so be effective against the debtor. In the absence 
of such a provision, the effects of the debtor’s payment and set-off possibility may be similar to in 
other participating Member States where debtor no tification is not required for the collateralisation 
of a claim to be valid. 
 3. Specific observations 3.1 Article 6 of the draft law lists certain specific consequences of the pledge in the event that the 
credit institution that pledged the claim to the N BB becomes insolvent. Sin ce the Eurosystem’s and 
the NBB’s credit operations also include intraday credit operations and as the counterparties who 
are eligible to conduct such operations are not restricted to credit institutions, the scope of 
Article 6, which only covers credit institutions , might be too narrow. Even though the ECB 
understands that, in practice, the NBB only envisages receiving credit claims as collateral from counterparties that are credit institutions, it might be more appropriate to  instead refer to any 
counterparty that is eligible for central bank credit op erations and thus eligible to pledge a claim to 
the NBB. 
3.2 One specific consequence of the credit institution’s possibl e insolvency is that, if the NBB notifies 
the pledge to the debtor, the debtor can ther eafter only validly make payment to the NBB. 
Although this is not explicitly stated in the draft law, which is a lex specialis compared to the 
general Belgian regime applicable to pledges,  the ECB understands the draft law leaves the NBB 
the possibility of notifying the pledge to the de btor outside the specific situation of the credit 
institution’s insolvency, if the NB B wishes to have recourse to such notification for whatever 
reason. Such notification will then result in the debtor being deemed to be acting in bad faith 
because of its actual knowledge of the pledge and, hence, will ensure that only a payment to the 
NBB validly releases the debtor from its obligation to pay. Furthermore, irrespective of whether or 
not the credit institution is insolvent, the NBB w ill not have any repayment claim against the payee 
if the payee is not an entity that is entitled to  consult the register (as only such entities can be 
deemed to be acting in bad faith ; see paragraph 1 above) or an entity that has actual knowledge of 
the pledge, the latter possibility being less likely in practice.  
 
5 3.3 The ECB also understands that the prohibition in Ar ticle 6 of the draft law on set-off in the event of 
insolvency of the credit institution (i.e. the N BB’s pledgor) does not prevent a valid reduction or 
even extinction of the claim through set-off, if th e conditions for such set-off have been fulfilled 
before the credit institution’s inso lvency (see paragraph 2.4 above). 
3.4 Finally, the ECB welcomes the fact that Ar ticle 6 of the draft law applies the simplified 
enforcement procedure laid down in Belgian law4 in relation to in rem  collateral arrangements and 
loans for financial instruments, with regard to claims pledged to the NBB5. The ECB notes that the 
application of this procedure is normally not limited to insolvency pr oceedings, but encompasses, 
for instance, attachments. In view of the benefits of  such a wide scope of application in the event of 
enforcement of the NBB’s pledge under the draft law, the ECB suggests including this simplified 
enforcement procedure in a separate provision of the draft law instead of in Article 6, as this 
Article seems to limit the proce dure to insolvency situations. 
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 3 August 2006. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
                                                           
4  Article 8 of the Law of 15 December 2004 on financial collateral and various tax provisions in relation to in rem  
collateral arrangements and loans for financial instruments. 
5  See also paragraph 8 of ECB Opinion CON/2005/43 of 3 No vember 2005 at the request of the Belgian Ministry of 
Finance on a draft law abolishing bearer securities and a draft royal decree concerning dematerialised corporate 
securities.