EN 
 
 
 OPINION OF THE EUROPEAN CENTRAL BANK 
of 4 February 2009 
at the request of Magyar Nemzeti Bank 
on three draft regulations on the terms and condi tions and the operating rules of organisations 
providing central securities depository, cleari ng house and central counterparty activities 
(CON/2009/9) 
 Introduction and legal basis
 
On 7 January 2009 the European Central Bank (E CB) received a request from Magyar Nemzeti Bank 
(MNB) for an opinion on three draft MNB regulations: the draft regulation on the central securities depository’s terms and cond itions and operating rules, the draft regulation on the terms and conditions 
and operating rules for organisations providing clearing house activities under the Law on the capital 
market, and the draft regulation on the terms and conditions and operating ru les of organisations 
providing central counterparty activities under the Law on the capital market (hereinafter together ‘the 
draft regulations’). 
The ECB’s competence to deliver an  opinion is based on Article 105(4) of the Treaty establishing the 
European Community and the fifth indent of Article  2(1) of Council Decisi on 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 regulations relate to payment and settlement systems. In acco rdance 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 regulations 
Until its very recent re-structuring on 1 January 2009, as a specialised credit institution KELER Zrt. acted 
not only as a clearing house (CH) and a central secu rities depository (CSD) operating the securities 
settlement system in Hungary, but also as a central counterparty (CCP). In the course of 2002 and 2003, 
the ECB prepared a comprehensiv e assessment of KELER Zrt. along with assessments of the central 
securities depositories and settlement systems of all other countries joining the European Union in 2004
2. 
According to the assessment published in 2004, th e performance of the CSD function and the CCP 
function by a single legal entity presented certain risks, in  particular if a CCP were to take a principal risk 
equal to or exceeding its capital base, using up its own funds if this risk were to be crystallised. The 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  Assessment of accession countries’  securities settlement systems , January 2004. Available on the ECB’s website at 
www.ecb.europa.eu. 
 
2 consequent insolvency of the CCP could also di srupt the CSD’s functioning. Consequently, the ECB 
recommended allocating the CSD and CCP func tions to independent legal entities.  
Furthermore, in its Opinion CON/2006/1 of 4 January  2006 at the request of Magyar Nemzeti Bank on a 
draft regulation on the general terms and conditions  and operating rules of organisations providing 
clearing house activities, the ECB drew the consulting authority’s attention to its recommendation for 
creating for KELER ‘a legal structure which prevents  any spillover of risks from the entity providing 
CCP services to the entity providing securities settleme nt services’. Hence the ECB suggested amending 
the draft regulation to take account of this recomme ndation, among other things by separating the legal 
provisions governing the general terms and cond itions and operating rules for CCP and for CSD 
functions. 
In view of the risks involved and at the E CB’s recommendation, the MNB supported the idea of 
separating KELER Zrt.’s CCP and CSD functions into  legally independent companies. Under the new 
regime, a newly established company, KELER KSZF Kf t., acts as the CCP, while KELER Zrt. retains its 
CSD and CH functions. The amendments to Law CXX of 2001 on the capital market in 2007 served as 
the basis for separating these functions. 
The sound and smooth operation of the Hungarian securiti es clearing and settlement system is of utmost 
importance for ensuring the efficient implementati on of monetary policy, the smooth operation of 
payment systems and financial markets, and thus fina ncial stability, and the draft regulations will regulate 
the terms and conditions and the operating rules for the organisations performing CSD, CH and CCP 
functions.  
According to the general provisions of the draft regula tions, the Rules ‘shall defi ne the parties’ rights and 
obligations as well the procedures in such a way that the legal, financial and operational risks … are clear 
and unambiguous’. The draft regulations include cer tain definitions, such as those for a securities 
settlement system, liquid assets, etc. The draft regulati ons lay down various genera l rules, such as rules 
for granting access and terminating business relationships  and the financial and technical requirements for 
participation, etc. They also govern certain risk  management measures, such as the management of 
principal risk related to securities transactions, secu rities lending, the market, futures and options, and the 
clearing members and the emergency-handling rules, et c. The draft regulations also lay down the basic 
principles for determining fees. It is proposed that  the draft regulations should enter into force on 
28 February 2009. 
 2. General observations  2.1 The ECB welcomes the allocation of the  CSD and the CCP functions to independent legal entities 
to avoid spill-over risks. It understands that th e allocation process has been completed and the new 
scheme started operating on 1 January 2009. 
 
3  
2.2 In the opinion of the ECB, the draft regulati ons follow, as far as possible, the legal rules and 
standards established by the Eurosystem  for payment and settlement systems. 
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 4 February 2009. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET