EN ECB-PUBLIC 
 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 12 February 2014 
on accounts for dematerialised securiti es denominated in foreign currency  
(CON/2014/13) 
 Introduction and legal basis 
On 17 January 2014, the European Central Bank (ECB ) received a request from the Nationale Bank van 
België/Banque Nationale de Belgique  (NBB) acting on behalf of the Minister for Finance for an opinion 
on a draft royal decree (hereinafter the ‘draft ro yal decree’) amending the Royal Decree of 14 June 1994 
laying down the rules for maintaining accounts for de materialised securities denominated in foreign 
currency or units of account (hereinafter the ‘Royal Decree of 14 June 1994’) and the Royal Decree of 
26 May 1994 on the collection and payment of th e withholding tax on movable property in accordance 
with Chapter I of the Law of 6 August 1993 on transac tions in certain securities (hereinafter the ‘Royal 
Decree of 26 May 1994’). The ECB was asked to deliver an opinion within one month in order for the Belgian government to be able to take the ECB opini on into consideration befo re submitting the draft law 
to the Belgian Parliament. 
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 first, second, third and fifth indents of Article 2(1) of Council Decision 98/415/EC
1, since the draft law relates to currency matters, means of payment, the NBB and 
payment and settlement systems. In accordance with the firs t sentence of Article 17.5 of the Rules of 
Procedure of the European Central Bank, th e Governing Council has adopted this opinion. 
 1.  Purpose of the draft law 
1.1  The draft royal decree aims to increase the nu mber of intermediaries authorised to maintain 
accounts with the NBB-administrated securities settl ement system (hereinafter ‘the NBB-SSS’) for 
dematerialised public debt securiti es denominated in foreign currency
2 (hereinafter ‘securities 
denominated in foreign currency’). By virtue of th e draft royal decree, all participants in the NBB-
SSS will be authorised to maintain accounts fo r securities denominated in foreign currency. 
                                                 
1 Council Decision 98/415/EC of 29 June 1998 on the consultati on of the European Central Bank by national authorities 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 
2  See Article 4 of the Law of 2 January 1991 on the public debt market and instruments for monetary policy, which 
designates the NBB as the settlement institution entrusted with the holding and settlement of dematerialised Belgian 
public debt securities. 
ECB  -PUBLIC 
2 Foreign currencies to be processed on the TARGET2-Securities platform (hereinafter, 
‘T2S platform’) are to be governed by rules iden tical to those governing securities denominated in 
euro, whereas other foreign currencies will be go verned by different rules. According to the 
explanatory memorandum for the draft royal decree , the suppression of any limitation as to the 
participants who may hold accounts for securities denominated in foreign currency improves the 
marketability of such securities as well as the func tioning of the NBB-SSS. Such suppression also 
aims at harmonising the processing of all cash transfer orders on the T2S platform, irrespective of the currency in which such transfer orders are denominated. 
1.2. Article 3 of the Royal Decree of 14 June 199 4 provides that, unless otherw ise stipulated in the 
issuance agreement, the counter-value in euro of  securities denominated in foreign currency will be 
calculated on the basis of the last foreign exchange  reference rates published by the ECB. Since the 
data for such foreign exchange reference rates are now automatically transmitted to the NBB-SSS, 
there will be shorter cash settlement processes for all corporate actions regarding securities 
denominated in foreign currency that are held in  the NBB-SSS. More particularly, the NBB will 
notify its participants of the amount of interest a nd capital due in euro for securities denominated in 
foreign currency that are held in the NBB-SSS one business day prior to the maturity date of such 
securities, rather than two business days before that maturity date
3. As a consequence, the 
prohibition against the transfer of such secur ities will only apply one business day prior to the 
maturity date concerned, instead of two business days  prior to that maturity date, as is currently the 
case4. The withholding tax due for such transactions w ill also be calculated on the euro value of the 
securities denominated in foreign currency one business day before the maturity date5. For the 
purposes of these provisions, ‘business day’ is defined as a day on which the NBB-SSS operates6. 
 2.  General observations 2.1 The ECB welcomes the fact that the draft royal decree allows a much wider range of financial 
institutions participating in the NBB-SSS to ma intain accounts for securities denominated in 
foreign currency. Such an amendment of the legal framework governing the NBB-SSS has already 
been recommended by a T2S task force investigating obstacles to smooth cross-Central Securities 
Depositories (CSD) settlement
7. In addition, this development will ensure non-discriminatory, 
objective and transparent access to clearing and se ttlement facilities in acco rdance with Article 34 
of Directive 2004/398, Article 30 of the proposal for a regulation on improving securities settlement 
                                                 
3  Article 2(1) of the Royal Decree of 14 June 1994, as  amended by Article 2.1° of the draft royal decree. 
4  Article 2(2) of the Royal Decree of 14 June 1994, as  amended by Article 2.2° of the draft royal decree. 
5  Article 11 of the Royal Decree of 26 May 1994, as  amended by Article 3 of the draft royal decree. 
6  Article 2(3) in fine of the Royal Decree of 14 June 1994, as amende d by Article 2.3° of the draft royal decree. 
7  See section 2.4.2. of the ‘Issue list for task force on sm ooth cross-CSD settlement’, 8 February 2011, available on the 
ECB’s website at www.ecb.europa.eu. 
8  Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial 
instruments amending Council Directiv es 85/611/EEC and 93/6/EEC and Dire ctive 2000/12/EC of the European 
Parliament and of the Council and repealing Council Directive 93/22/EEC (OJ L 145, 30.4.2004, p. 1). 
ECB  -PUBLIC 
3 in the European Union and on central securities depositories9, and Principle 18 of the CPSS-IOSCO 
Principles for financial market infrastructures10. 
2.2. The ECB also welcomes the fact that corporate action processes are shortened due to the faster 
availability of the data for foreign exchange refe rence rates in the NBB-SSS. Nevertheless, the ECB 
wishes to draw the Belgian legislator’s attenti on to the report on Market Standards for Corporate 
Action Processing, developed by the Corporate Actions Joint Working Group11, which recommends 
that issuers effect payment as soon as possible after the payment system opens, and no later than 12 noon, local time, at the registered office of th e issuer CSD. According to these standards, the 
blocking of holdings for cash distribution is prohibited. The NBB-SSS, in its capacity as Contracting CSD to the T2S Framework Agreement,  and in cooperation with the other CSDs, seeks 
to harmonise its processes to make efficient use of  the T2S Services. The ECB therefore encourages 
the Belgian legislator to work together with th e NBB-SSS to determine how to fully comply with 
Union market standards on corporate actions. 
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 12 February 2014.  
[signed] 
 
The President of the ECB 
Mario DRAGHI 
 
                                                 
9  Proposal for a regulation of the European Parliament and of the Council on improving the securities settlement in the 
European Union and on central securities depositories (CSD s) and amending Directive 98/26/EC, COM(2012) 73 final. 
10  Available on the website of the Bank for International Settlements website, at http://www.bis.org/publ/cpss101a.pdf  
11  This group is composed of representa tives of the main stakeholders, i.e. issuers, market infrastructures and 
intermediaries. The report ‘Market Standa rds for Corporate Action Processing’, re vised version 2012, is available on the 
ECB’s website at www.ecb.europa.eu.