EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 14 May 2009  
on broadening the  Banque Centrale du Luxembourg’s oversi ght role by a draft law on payment 
services, electronic money institutions and se ttlement finality in payment and securities 
settlement systems  
(CON/2009/46) 
 
Introduction and legal basis  
On 9 April 2009 the European Central Bank (E CB) received a request from the Banque Central du 
Luxembourg (BCL) for an opinion on a draft law on payment services, electronic money institutions and on settlement finality in paym ent and securities settlement systems (hereinafter the ‘draft law’), 
which also amends the Law of 23 December 1998 on monetary status and on the Banque Centrale du 
Luxembourg (hereinafter the ‘Organic Law of the BCL’).  
The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the 
European Community and the second, third and fifth indents of Article 2(1) of Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities regarding draft legislative provisions
1, as the draft law contains provisions on means of payment, the 
BCL and payment and settlement systems. In accordan ce with the first sentence of Article 17.5 of the 
Rules of Procedure of the Europ ean Central Bank, the Governing C ouncil has adopted this opinion. 
 1.  Purpose of the draft provisions 
1.1 The main purpose of the draft law is to impl ement in national law Directive 2007/64/EC of the 
European Parliament and of the Council of 13  November 2007 on payment services in the 
internal market amending Dir ectives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and 
repealing Directive 97/5/EC
2. In addition: 
(a) Article 58(3) of the draft law requires the BCL to notify the Conseil de la concurrence (the 
Competition Council) when it detects any infringement of competition rules related to 
access to payment systems; 
(b) Articles 107 to 110 of the draft law broaden the scope of the BCL’s oversight role in 
respect of payment instruments and payment and settlement systems; 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  OJ L 319, 5.12.2007, p. 1.  
2 (c) Article 124(1) and (4) of the draft law emph asises the BCL’s responsibility for promoting 
the smooth operation of payment systems under Article 105(2) of the Treaty; and 
(d) Article 124(3) and (5) of the draft law relates to the appointment of an independent auditor 
for the BCL and removes the r eciprocity requirement with re spect to the exchange of 
confidential information between the BCL, the Commission de surveillance du secteur 
financier (CSSF, the Financial Sector Supe rvisory Commission), the Commissariat aux 
Assurances (the Insurance Commission) and th e Service central de la statistique et des 
études économiques (STA TEC, the National Statistical Institute).  
1.2 This opinion only addresses the provisions of the draft law relating to the BCL and payment and 
settlement systems that go beyond the strict implementation of Community directives. While 
acknowledging the importance of Directive 2007/64/EC for the establishment of the Single 
European Payments Area (SEPA), implementation  of this Directive in national law is not 
addressed in this opinion. Simila rly, the implementation of Direc tive 98/26/EC of the European 
Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems
3 and of Directive 2000/46/EC of the European Parliament and of the Council 
of 18 September 2000 on the taking up, pursuit of and prudential supervision of the business of electronic money institutions are not considered in this opinion
4.  
 2. General observations  The ECB welcomes the draft law which will compre hensively govern payment services, electronic 
money, and payment and settlement systems in Luxembourg. Also, implementation of Directive 
2007/64/EC will fulfil the regulatory pr econditions for the introduction of SEPA.  
 3. Specific observations  3.1 Notification by the BCL to th e Conseil de la Concurrence  
Regarding the requirement for the BCL to inform the Conseil de la Concurrence  of any 
infringement of competition rules related to access to payment systems
5, it should be made clear 
that the BCL is not responsible for the enfo rcement of competition policy, which remains 
exclusively within the competence of the Conseil de la Concurrence.  
3.2 The BCL’s role with respect to payment in struments and payment and settlement systems  
The BCL’s role with respect to payment instru ments and to payment and settlement systems is 
broadened in the two following respects. 
                                                 
3  OJ L 166, 11.6.1998, p. 45.  
4  OJ L 275, 27.10.2000, p. 39. See also the proposal for a Directive of the European Parliament and of the Council on 
the taking up, pursuit and prudential supervision of the bus iness of electronic money institutions, amending Directives 
2005/60/EC and 2006/48/EC and repealing Di rective 2000/46/EC (COM(2008) 627 final).  
5  Article 58(3) of the draft law.  
3 First, the CSSF is currently the authority responsible for the prudential supervision of payment 
and securities systems. This responsibility is without prejudice to the tasks and competences of the European System of Central Banks pursuant to th e Treaty and the Statute of the European System 
of Central Banks and of the Eur opean Central Bank (hereinafter the ‘Statute of the ESCB’). As a 
result, all systems in which the BCL  participates are considered to be  designated as ‘systems’ from 
the moment the BCL gives notice of such system s to the European Commission. Under the draft 
law, the BCL is given the exclusive power to designate systems as payment and settlement systems and the Ministry of Finance is respon sible for their notification to the Commission
6.  
Second, under Article 124 of the draft law, the BCL is competent to ‘ensure the efficiency and 
safety of payment systems and securities settleme nt systems, as well as the safety of payment 
instruments’ and ‘the means of coordination and cooperation employed for the performance of these tasks [is] subject to agreement betwee n the BCL and the CSSF, respecting the legal 
competences of the parties’. In  addition, under the draft law, the BCL may require payment 
systems, securities settlement systems and issu ers of payment instruments to provide any 
information relating to the operation of these sy stems or relating to payment instruments that 
would be necessary in order to assess  their efficiency and safety. 
3.2.1 The ECB welcomes these amendments since (a ) they clarify the division of competencies 
between the CSSF and the BCL as far as payment instruments, payment systems and securities settlement systems are concerned, in line with Article 105(2) of the Treaty and Article 3.1 of the Statute of the ESCB, and (b) they broaden the BLC’s oversight role to cover all payment and 
settlement systems, regardless of their designati on under Directive 98/26/EC. The draft law takes 
into account the ECB’s recommendations in Opinion CON/1999/19, Opinion CON/2008/42 and Opinion CON/2008/17
7 and by doing so, further facilitates th e BCL’s effective performance of its 
financial stability role, which is supported by its au thority to supervise the liquidity management of 
market operators8.  
3.2.2 For the sake of clarity, an express reference to the concept of ‘oversight’, which is recognised as a 
separate function under the Maastricht Treaty9 could be made in Article 2(5) of the Organic law of 
the BCL10. In addition, since the scope of the BCL’s over sight role is broadened, it is necessary to 
ensure that the BCL is provided with sufficient human and financial resources, both in terms of 
                                                 
6  Articles 107 to 110 of the draft law. 
7  All ECB opinions are available on the ECB’s website at www. ecb.europa.eu/ecb/leg al/opinions/html/index.en.html. In 
Opinion CON/1999/19, the ECB stated that the division of  competence between the CSSF and the BCL would directly 
infringe the payment system oversight competence of the ECB and would create a situation of conflict between the BCL 
and the CSSF in relation to the oversight function. The ECB also stated that this would not allow for an adequate 
distinction to be made between the f unction of prudential supervision, on the one hand, and those of payment systems 
oversight, on the other hand. See also paragraph 4.8 of Opinion CON/2008/42 and paragraph 4.4 of Opinion 
CON/2008/17.  
8  See paragraph 4.3 of Opinion CON/2008/42. 
9  See the ‘Eurosystem Oversight Policy Framework’ of Februa ry 2009, and in particular it s Section 3, available on the 
ECB’s website at www.ecb.europa.eu.  
10  In Article 27(3) of the Organic law of the BCL, the re ference to Article 2(6) should be to Article 2(5). 
4 quantity and quality, to carry out its new tasks wit hout affecting its capacity to carry out its other 
Eurosystem-related tasks11.  
3.2.3 According to the explanatory memorandum to the draft law12, the agreements to be entered into 
between the BCL and the CSSF under Article 2(5) of the Organic Law of the BCL concern the 
financing of the BCL’s oversight activities, as th e BCL, unlike the CSSF, is not able to levy taxes 
on the financial institutions subject to its oversight. As stated in Opinion CON/2009/713, the BCL’s 
overall independence would be jeopardised if it co uld not autonomously avail itself of sufficient 
financial resources to fulfil its mandate. While the ECB notes that, in the c ontext of its oversight 
role over payment systems, securities settlement systems and payment instruments, the BCL may 
request information and undertake site visits to collect such information, the ECB regrets that, 
despite the recommendations in Opinion CON/2008/1714, the BCL does not yet have the power to 
impose sanctions.  
3.3 Appointment of the BC L’s external auditor  
Under Article 124(3) of the draft law, an external auditor is appointed for five financial years. 
This provision follows the principles adopted by the ECB’s Governing Council15.  
3.4 The exchange of information between the BCL, the CSSF, STATEC and the Commissariat aux 
Assurances  
Article 124(5) removes the reciprocity requirement with respect to the exchange of information 
between the BCL, the CSSF, STATEC and the Comm issariat aux Assurances. In Article 124(5) 
of the draft law, the phrase ‘subject to recipr ocity’ is deleted. The explanatory memorandum 
explains that deletion of this condition is necessary in order to enable regular exchanges of 
information between the competent authori ties under normal circumstances, and most 
importantly, in a crisis situation. In the curren t environment, it is crucial that the relevant 
authorities are able to exchange  information on any difficulties faced by financial institutions 
(including payment and securities settlement sy stems) that may endanger their financial 
soundness and ability to discharge their obligations in the normal  course of business. The ECB 
welcomes this change, which indirectly follow s up on the recommendation expressed in Opinion 
CON/2009/716 as regards the harmonisation of the rules governing the exchange of confidential 
information between the BCL, on the one hand, and STATEC, on the other hand. 
 
                                                 
11 See paragraph 3.1 of Opinion CON/2009/27.  
12  Explanatory memorandum to the draft law, p. 88. 
13  See paragraph 3.2.  
14  See paragraphs 4.2 and 4.3. 
15  Good Practices for the selection and mand ate of External Auditors according to  Article 27.1 of the Statute, as 
approved by the Governing Council of the ECB on 23 Oc tober 2008, which is available on the ECB’s website at 
www.ecb.europa.eu. 
16  See paragraph 3.3.  
5 This opinion will be published on the ECB’s website.  
  Done at Frankfurt am Main, 14 May 2009. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET