EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 22 May 2012 
on the introduction of legal framework for the operation of central counterparties 
(CON/2012/41) 
 
Introduction and legal basis  
On 10 April 2012, the European Central Bank (ECB) re ceived a request from the Marshal of the Polish 
Parliament (Sejm) for an opinion on a draft law ame nding the Law on trading in financial instruments and 
certain other laws (hereinafter the ‘draft law’). A modified version of the draft law1, as developed in the 
parliamentary legislative procedure, was made public  following the original consultation request. This 
opinion takes these modifications into account.  
The ECB’s competence to deliver an  opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the fifth and sixth indents of Article 2(1) of Council 
Decision 98/415/EC of 29 June 1998 on the consulta tion of the European Central Bank by national 
authorities regarding draft legislative provisions2, as the draft law relates to payment and settlement 
systems and to rules applicable to financial institutions  insofar as they materially  influence the stability of 
financial institutions and markets. 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 law 1.1 The draft law amends the Law of 29 July  2005 on trading in financial instruments
3 inter alia  with a 
view to adapting its provisions to the requirements to be introduced by the proposal for a Regulation of the European Parliament and of the Council on OTC derivatives, central 
counterparties and trade repositories
4. The aim of this adaptation is to enable the clearing of 
transactions in financial instruments through a central counterparty (CCP)5. 
                                                 
1 The draft law amending the Law on trading in financial inst ruments and the Law on public offering, conditions governing 
the introduction of financial instruments to organised tr ading, and public companies (version of 24 April 2012, 
parliamentary print no. 337).  
2 OJ L 189, 3.7.1998, p. 42. 
3 Consolidated text published in Dziennik Ustaw  (Dz. U) of 2010 No 211, item 1384. 
4 COM(2010) 484 final. 
5 See explanatory memorandum to the draft law, p. 1. 
ECB-PUBLIC  
2 1.2 To this end, the draft law introduces cleari ng novation, a mechanism where the CCP assumes the 
rights and obligations of the original parties to the transaction. This is done, inter alia , by: 
(a) modifying the legal definitions of clearing and settlement and the parties involved in the 
clearing process6; (b) extending the protection against insolv ency and similar proceedings of funds 
available in a counterparty’s account and necessary for settling the transaction, to cover those over-
the-counter (OTC) transactions with mandatory central clearing7; (c) introducing an obligation for 
counterparties to clear their transactions throug h clearing members together with corresponding 
rules on granting and revoking authorisation to clear such transactions8; (d) defining contractual 
rules for a CCP to assume the rights and obligations of the original parties to a transaction, with a 
separate set of steps for those transactions execu ted by clearing members directly and for those 
executed by counterparties required to execute  their transactions through clearing members9. 
1.3 In addition, the draft law provides that a trad e repository may be established and operated by the 
National Depository for Securities (KDPW)10. 
 2. Specific observations 2.1 Article 45e(1) of the Law on trading in financial instruments as amended by the draft law specifies, 
inter alia , that where a counterparty has designated f unds on its account to settle OTC transactions 
subject to mandatory central clearing, availability of such funds for settlement shall be protected 
against effects of insolvency of  the counterparty providing such funds. The ECB understands that 
this provision extends the protection of parties to  transactions in financial instruments against the 
effects of a counterparty’s insolvency in specific cases not covered by the relevant provisions of Polish law
11, which transpose the Settlement Finality Directive12 and the Financial Collateral 
Directive13. The ECB further understands that transac tions not subject to mandatory central 
clearing, including repo transactions, would not be covered by this extended protection. In this 
context, the ECB notes that repo transactions are covered within the scope of ‘title transfer 
financial collateral arrangements’ protected  under the Financial Collateral Directive14 and would 
therefore welcome extending the protection offe red by amended Article 45e(1) of the Law on 
trading in financial instruments to cover repo tran sactions not subject to mandatory central clearing. 
Indeed, broad protection of repo transactions is enc ouraged as they constitute an effective tool for 
                                                 
6 See Article 45b of the Law on trading in financ ial instruments as amended by the draft law. 
7 See Article 45e of the Law on trading in financ ial instruments as amended by the draft law. 
8 See new Article 45g of the Law on trading in fina ncial instruments insert ed by the draft law. 
9 See new Article 45h of the Law on trading in fina ncial instruments insert ed by the draft law. 
10 See new Article 48(5a) of the Law on trading in fi nancial instruments inserted by the draft law. 
11 See Article 22(1)(4), 66-67, 77(4), 80, 84(3), 85, 85a, 127( 4), 135-137,  333(2) and 498(4) of Law on bankruptcy and 
rehabilitation of 28 February 2003 (consolidated text published in Dz.U. of 21 October 2009 No 175, item 1361). 
12 Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and 
securities settlement systems (OJ L 166, 11.6.1998, p. 45). 
13  Directive 2002/47/EC of the European Parliament and of th e Council of 6 June 2002 on financial collateral arrangements 
(OJ L 168, 27.6.2002, p. 43). 
14 See Article 4(1) together with Article 2(1) points (b) and (l) of the Financial Collateral Directive. 
ECB-PUBLIC  
3 mitigating counterparty credit risk, while stable repo markets are an important source of funding 
for the financial sector. 
2.2 In the context of amended Article 45e of the Law on trading in financial instruments, the ECB 
notes that this provision currently includes paragrap h 3, which extends its application to securities 
registration systems operated by Narodowy Bank Po lski. This provision is, however, missing from 
Article 45e as amended by the draft law. The text currently included in Article 45e(3) should 
therefore be reintroduced. 
2.3 The ECB also notes that to allow for KDPW’s par ticipation in T2S, the Law on trading in financial 
instruments should be further adapted in the futu re so that it cannot be interpreted as preventing 
KDPW from outsourcing certain functions related to securities settlement to the Eurosystem acting as operator of the T2S platform. Particular attention in  this regard needs to be paid to Article 48(7) 
and Article 150(1)(13a) of the Law on trading in fina ncial instruments, which may be interpreted as 
allowing KDPW to transfer information related to s ecurities settlement solely to its subsidiaries to 
which it has delegated operation of the central securities depository
15. The ECB recommends 
adequately amending or supplementing the above provisions to allow KDPW to outsource certain securities settlement functions to a third-party service provider, and to transfer relevant information 
to them. In this respect, the attention of the Po lish authorities is also drawn to Article 28 of the 
proposal for a Regulation of the European Par liament and of the Council on improving securities 
settlement in the European Un ion and on central securities depositories (CSDs) and amending 
Directive 98/26/EC
16. 
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 22 May 2012. 
 
[signed] 
 
The President of the ECB 
Mario DRAGHI 
                                                 
15 See also paragraph 4 of Opinion CON/2008/20, paragraph 2.2 of Opinion CON/2009/55 and paragraph 2.2 of Opinion 
CON/2011/63. All ECB opinions are published on the ECB’s website at  www.ecb.europa.eu. 
16 COM(2012) 73 final.