EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 13 April 2011 
on the settlement risk management procedure for net settlement systems 
(CON/2011/35) 
 
Introduction and legal basis  
On 21 February 2011, the European Central Bank (ECB) received a request from Banca Na ţională a 
României (BNR) for an opinion on a draft regulation on the procedure for settlement risk management for 
net settlement systems and the facilities granted by BN R for smooth settlement in ReGIS (hereinafter the 
‘draft regulation’).  
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 indent  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 provisions1, as the draft regulation relates to paymen t and settlement systems. In accordance 
with the first sentence of Article 17.5 of the Rule s of Procedure of the European Central Bank, the 
Governing Council has adopted this opinion. 
 1.
  Purpose of the draft regulation 
1.1 According to Article 1, the draft regulati on has two main objectives. First, it establishes a 
procedure for settlement risk management appli cable to net settlement systems which settle in 
ReGIS2, unless they are governed by their own procedur es for the management of settlement risk in 
ReGIS. Second, it provides facilities granted by BN R to the credit institutions participating in 
ReGIS for smooth settlement. 
1.2 The ECB understands that the draft regulation is intended to modify the national regulatory 
framework for the settlement risk management pro cedure in ReGIS in connection with the closure 
of the paper-based clearing house operated by BNR. 
1.3 The draft regulation lays down various provisi ons under which eligible credit institutions may 
benefit from the facilities granted by BNR. These faci lities include: (i) the intraday liquidity facility 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  According to BNR Order No 34/2008 on the systems falling under Law No 253/2004 on settle ment finality in payment 
and securities settlement systems ( Monitorul Oficial al României  Part One, No 61, 25.1.2008),  ReGIS is a national real-
time gross settlement payment system in Romanian leu owned and operated by BNR. 
2 provided via repurchase transactions with settlement  on the same day, against assets eligible for 
collateralisation; (ii) the Lombard credit lending facility, into which the intraday facility can be 
converted at the request of the credit institution in the event of a failure to repurchase the assets 
used for the purposes of that facility; and (iii) th e lending facility for the settlement of net positions 
calculated in the card payment schemes. To be elig ible to access the intraday liquidity facility, or 
the lending facility for the settlement of net positio ns, the respective credit institutions must be 
participants in ReGIS and SaFIR3, must not be suspended from these systems, and should have 
concluded with BNR the framework contract for in traday repo transactions using the draft template 
annexed to the draft regulation. 
 2. General observations  2.1 The ECB notes the update of the national regulatory framework by the draft regulation. The safety 
and efficiency of payment systems are key to maintaining and promoting financial stability. 
Therefore, the ECB attaches great importance to reinforcing a consistent legal framework for 
smooth settlement within ReGIS. 
2.2 The ECB notes that the legislation in this ar ea needs to take into account the internationally 
accepted standards that govern the design and operation of payment systems, notably the ‘Core 
Principles for Systemically Important Payment Systems’
4 and the ‘Business Continuity Oversight 
Expectations for Systemically Important Payment Systems’5, while also making it possible for 
entities providing settlement services to include a dditional provisions in their settlement risk 
management procedures and to introduce further or stricter measures to ensu re the safety of their 
operations. Moreover, the ECB assumes that the opera tors of net settlement systems are expected to 
comply with international standards. 
 3. Specific observations  3.1 The draft regulation does not define ‘card paym ent schemes’, a term used extensively throughout 
the draft regulation. To increase the transparency of the draft regulation, as well as to enable the 
relevant participants to have a clear understanding of settlement risks for card payment systems, it 
would be appropriate to explicitly define ‘card pa yment scheme’ or to refer to its definition in 
national law. 
3.2  Furthermore, to become eligible for credit to manage the settlement risk, the clearing participant in 
a card payment scheme should enter into the framewo rk contract with BNR in accordance with the 
                                                 
3  According to BNR Order No 34/2008 and the system rules, SaFIR is a depository and sett lement system for financial 
instruments owned and operated by BNR.  
4  Committee on Payment and Settlement Sy stems. Core Principles for Systemic ally Important Payment Systems, 2001. 
Available on the Bank for International Settlement’s website at www.bis.org. 
5  Available on the ECB’s we bsite at www.ecb.europa.eu. 
3 templates for framework contracts in Annexes 2a  and 2b of the draft regulation. Against this 
background, the ECB notes that the draft regulation appears to restrict the eligibility of credit institutions for settling net positions calculated in the card payment sch emes to clearing participants 
in card payment systems operated by VISA Europe  (Annex 2a) or by MasterCard International 
(Annex 2b). This limitation of the draft regula tion may disadvantage disproportionately and 
without objective justification credit institutions  administered by other card payment schemes, 
whether existing competitors or new market entrants.  
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 13 April 2011. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET