EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 23 August 2007  
at the request of the Spanish Minist ry for Economic Affairs and Finance 
on the draft State budget law for 2008 ame nding Law 41/1999 on payment and securities 
settlement systems 
(CON/2007/25) 
 
Introduction and legal basis  
On 1 August 2007 the European Central Bank (ECB) re ceived a request from the Spanish Ministry for 
Economic Affairs and Finance for an opinion on some provisions of the draft State budget law for 2008 (hereinafter the ‘draft law’) amending Law 41/1999 on payment and securities settlement systems. 
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 law relates to payment and settle ment systems. 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 
The purpose of the draft law is to adapt the Spanish legislation in th e field of payment and securities 
settlement systems to the Trans-Eu ropean Automated Real-time Gross settlement system 2 (TARGET2) 
in general and more specifically to TARGET2-Banco  de España by: (i) including TARGET2-Banco de 
España in the list of designated systems; (ii) allo wing designated systems to settle credit transfer orders 
not only in an account held with th e Banco de España, but also in an  account held with other European 
Union central banks whose systems are connected to the Banco de España's system in the European 
System of Central Banks context; and (iii) prohibiti ng funds on a settlement account from being used for 
other purposes during a system’s daily settlement session, fully protecting them from insolvency 
proceedings and from attachments or similar measures.  
 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2 2. General observations  
The ECB welcomes the amendments proposed by the draf t law, as they support the smooth functioning of 
TARGET2.  
  3. Specific observations 3.1 The ECB welcomes the broadening of the concept of designated system by the proposed new 
Article 3(d) and considers that the possibility to  settle in central bank money through accounts with 
any member of the ESCB is compatible with th e design and organisation of TARGET2. However, 
the scope of Article 3(d) and the protection of systems proposed in the draft law are limited to 
payment and securities settlement systems settling in  an account at the Banco de España or any 
other ESCB member. Although not strictly requi red by the Settlement Finality Directive
2, the 
national authorities might consider broadening the con cept of designated system so as to include the 
possibility of also designating systems settling in commercial bank money. In such instances, steps 
should be taken to protect particip ants from credit and liquidity risks arising from the failure of the 
cash settlement agent whose assets are used for that purpose. Al so, the ECB observes that the 
TARGET2 component system operated by the ECB is  not expressly covered by the provisions of 
the proposed Article 3(d). 
3.2 The ECB also welcomes the full protection by th e new Article 11(3) of funds on a settlement 
account from insolvency proceedings and any other judicial or administrative enforcement measure, 
thus guaranteeing the availability of a participan t account and the enforceability of credit transfer 
orders during the operational day according to the system rules.  
3.3 With regard to the designation of TARGET2-Banco de España as a system, it should be considered 
clarifying in the draft law that the current Spanish RTGS system, Servicio de Liquidación del 
Banco de España  (SLBE), will only operate until its repl acement by TARGET2-Banco de España. 
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 23 August 2007. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
                                                 
2  Directive 98/26/EC of the European Parliament and of th e Council of 19 May 1998 on settlement finality in payment and 
securities settlement systems (OJ L 166, 11.6.1999, p. 45).