OPINION OF THE EUROPEAN CENTRAL BANK
of 17 July 1998
at the request of the Banque de France under Article 109f (6) of the Treaty establishing
the European Community (the Treaty) and Ar ticle 5.3 of the Statute of the EMI on a
draft Decision No. 98-01 of the Monetary Policy Council relating to the collection of
statistical information from UCITS
CON/98/30
1. On 22 May 1998 the European Monetary Institute (her einafter referred to as the EMI) received
a request from the Banque de France for an opinion on a draft Deci sion No. 98-01 of the
Monetary Policy Council relating to the collection of statistical information from UCITS
(hereinafter referred to as the draft Decision).
2. In accordance with Article 109l (2) of the Treat y, the European Central Bank (hereinafter
referred to as the ECB) has taken over the advisory functions of the EMI, which has gone intoliquidation upon the establishment of the ECB on 1 June 1998. The ECBs competence to deliver
an opinion is based on Article 1.1, third inde nt, of the Council Deci sion (93/717/EC) of 22
November 1993 on the consultation of the EMI by the authorities of the Member States on draft
legislative provisions.
 
3. The main aim of the draft Decision is to allo w the collection of the statistical information
necessary for the production of the monetary statis tics, as well as of the financial statistics and
the balance of payments statistics, described in the EMI report entitled Statistical Requirements
for Stage Three of Monetary Union - Implemen tation Package (July 1996) (hereinafter referred
to as the Implementation Package).
 
4. The ECB welcomes the draft Decision, since it should enable the reporting requirements set out
in the Implementation Package to be fulfilled. However, while the Implementation Packageprovides that monthly data will be available as from reference period June 1998 and quarterly
data as from reference period December 1998, the draft Decision provides for compliance on thepart of reporting agents only as from March 1999. While it is understood that good estimates canbe provided on a temporary basis, the ECB r ecommends that every effort should be made to
bring forward the implementation of the draft D ecision to the reference period ending December
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1998 for all frequencies involved. Otherwise, th e following Sections put forward by area of
statistics a number of important tec hnical points to take into account.
 
 Money and Banking Statistics
 
5. Article 2 of the draft Decision sets the timeline ss of monthly reporting by reporting institutions at
a maximum of ten working days. The ECB approves this deadline on the understanding that itwill allow the Banque de France to comply with the ECBs deadline of fifteen working days for
receipt of the aggregated statistical informati on covering the Money Market Funds (hereinafter
referred to as MMFs).
 
6. With regard to Article 6, the threshold for re porting adopted in the Implementation Package is
not an absolute amount but is expressed as a percentage (95%) of the total national MonetaryFinancial Institutions (hereinafter referred to as  MFIs) balance sheet. It is understood that the
threshold set out in Article 6 and Annex 4 of  the draft Decision is consistent with the
Implementation Package and represents the result of the above-mentioned percentage.
 
7. Concerning Annex 1 Accountin g Situation, Part 1 Comm on Provisions, 1.1 Nature of
Information, the accounting principles set out in the Money and Banking Statistics Compilation
Guide, as published by the EMI in April 1998 (h ereinafter referred to  as the Compilation
Guide), foresee as the preferred method for the valuation of securities the current market
values, while allowing for a degree of flexib ility. The ECB notes that this is appropriately
reflected in the draft Decision. With respect to 1.3 Notion of counterparty, the ECB is pleased
to note that the coverage of the required inform ation on counterparties allows for fulfilment of its
reporting requirements. Part 2.2.2 Characteristic s of purchase transactions and temporary
transfers, and of transfers on transferable securitie s sets out guidelines to be followed by UCITS
in the treatment of repurchase agreements and similar operations (securities lending operations,
buy-back and sell-back agreements). While th ese proposals are not consistent with the
recommendations in the Compilation Guide, th e ECB notes that the draft Decision would
nevertheless provide sufficient information to en sure that the Banque de France is in a position to
prepare (output) statistics that fully comply with the Compilation Guide.
 
8. Regarding Annex 7, Nomenclature of attributes, the ECB is pleased to note the following points:
Nomenclature No.1, Classificati on of UCITS, allows for a separate identification of MMFs
(Monétaires euro and Monétaires à vocation in ternationale) and is in line with the ECB
reporting requirements. In Nomenclature No.4, Original Maturity, the maturity breakdown
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foreseen is in line with the ECB reporting requirements. In No menclature No. 13, Countries and
Currencies codes, Undetermined countries, the refere nce to Intra-EU and Extra-EU is used in the
draft Decision for the euro area; for the sake of  clarity it may be preferable to use the acronyms
Intra-MU and Extra-MU. In Nomenclature No.14, Institutional sectors, the sectoral breakdown
envisaged is in line with the ECB reporting require ments, in particular as it allows the separate
identification of positions vis-à-vis NCBs, credit institutions and MMFs.
 
9. Regarding Annex 8, Detailed Nomenclature of Institutional Sectors, section N Credit Institutions:
the draft Decision foresees the classification of the Treasury and the Post Office within section N
(Credit Institutions). It is understood that thes e will be classified as part of the Central
Government sector and that the statistical in formation on their deposit and close substitutes for
deposit liabilities will be reported to  the ECB in the context of th e supplementary data to the
consolidated balance sheet of the MFI Sector.
 
 Balance of Payments Statistics
 
10. The Banque de Frances draft Decision for reporting by UCITS will include a detailed
geographical breakdown for monthly, quarterly  and annual data. The ECB approves these
provisions, it being understood, however, that  such geographical breakdown exceeds the
requirements of the Implementation Package in relation to the compilation of the monthly key
items for which no geographical breakdown is required by the ECB.
 
11. On a quarterly basis, the sectoral breakdown required by the Implementation Package within
Portfolio Investment and Other Investment requi res the inclusion of the flows relating to MMFs
in those of the MFIs, whereas the other UCITS are recorded within the other sectors. By
contrast, on a monthly basis, the sectoral breakdown is only require d in Other Investment, with a
maturity split for the MFIs (including MMFs). Fo r Portfolio Investment the draft decision would
enable a distinction between assets held by MMFs (included in the MFIs) and those held by other
UCITS, beyond the requirements of the Implementation Package.
 
12. The ECB is pleased to note that the required br eakdowns by instrument in Portfolio Investment
(equity securities, debt securities, bonds and notes etc.) and the required breakdowns for OtherInvestment (loans/currency and deposits, other assets) can be met. In addition, the split betweenMonetary Union Member States issuers and non- Monetary Union Member States issuers can be
delivered.
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13. The ECB notes that similar breakdowns to those mentioned above for flows can be provided for
the International Investment Position.
 
14. As regards the different categories of securitie s, the draft Decision (see Annex 7 Nomenclature
No.6) classifies euro-medium term notes amongst  certificats de dépôt or  BISF when issued by
MFIs. The agreed treatment of these items in th e EMU BOP is that they should be considered as
bonds and notes. Moreover, the text menti oned above does not explicitly state that EMTN
issued by other sectors should be c onsidered as equivalents of BMTN. 
 
15. According to the draft Decision, UCITS reporte d assets should be valued according to the
accounting method used for each item. In this re spect the ECB notes that the accounting methods
comply with the IMF Balance of Payments Manual (5 th edition) as far as for financial assets the
accounting rule is valuation at current market prices, whereas for deposits and loans the method
is the book value. 
 
 Financial Accounts Statistics
 
16. To the extent that the information collected from UCITS should enable full compliance at the
statistical level with the Compilation Guide men tioned above, the draft Decision also complies to
a high degree with other statistical requirements set out in the Implementation Package and based
on the harmonised accounting rules laid down in European System of Accounts 1995 (hereinafter
referred to as ESA 95), such as Financial Accounts Statistics.
 
17. The ECB appreciates that all classification requi rements are included in the various Annexes of
the draft Decision which are necessary for the succe ssful integration of the statistical information
from UCITS into Financial Accounts Statistics. The sectoral breakdown described in Annex 8 is
fully in line with ESA 95; the whom-to-whom cla ssification of securities (held and issued) gives
extensive flexibility to compilers of financia l accounts. Sufficient breakdowns by maturity,
currency and country are also incorporated. Fu rthermore, data on financial derivatives and
accrued interest are available with the appropria te instrument and sector splits. However, if
possible, it is recommended to show for each i ndividual security the amount outstanding and
accrued interest.
 
18. The ECB is pleased to note that the mark to mark et valuation of assets and liabilities facilitates
the derivation of a full set of Financial Account s Statistics as proposed in the ESA 95, i.e. the
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accounts for financial transactions, other flows,  such as revaluations and other changes in
volume, and the financial balance sheets. It also  provides additional information of high quality
which could be used as reference data for various (non-financial)  counterpart sectors.
For the President of the ECB
[signed]
Christian Noyer
Vice-President