OPINION OF THE EUROPEAN MONETARY INSTITUTE
at the request of the French Ministry of Finance concerning various articles of a draft law on
the issuance and putting into circulation of banknotes and coins in the territorial
collectivities of Mayotte and Saint-Pierre-et-Miquelon, and on the protection of payment and
securities settlement systems
(CON/98/09)
1. On 4 February 1998, the EMI received a request for an opinion concerning various articles of a
draft law on the issuance and putting into circulation of banknotes and coins in the overseas
territories of Mayotte and Saint-Pierre-et-Miquelon, and on the protection of payment and
securities settlement systems from the French Ministry of Finance. An explanatory
memorandum was also submitted for each article to the EMI. This opinion is based on an English
translation of the official draft submitted to the EMI by the consulting authority.
2. The EMI’s competence to deliver an opinion is based on Article 1.1, first, second and fourth
indents, of the Council Decision (93/717/EC) of 22 November 1993 on the consultation of the
EMI by the authorities of the Member States on draft legislative provisions.
3. The EMI takes note, without any objections, of the proposed provisions of Article 19 of the draft
law relating to the changeover to the euro in connection with the financial markets, payment
systems and securities settlement systems, implementing some provisions of Article 8(4) of the
draft EU Council regulation on the introduction of the euro.
4. With ref erence to Article 20 of the draft law, the EMI welcomes the proposal to extend to the
securities settlement systems the provisions already applying under French law to payment
systems prohibiting the bankruptcy administrator or liquidator from challenging the payments
made by a participant on the day of the opening of such proceedings by a court and on such
grounds. Although the provisions of the second paragraph of Article 93-1 are already protective,
it could be considered whether the wording of the first paragraph of Article 93-1 is precise
enough to indicate that in the framework of securities settlement systems, not only the payment
but also the transfer of financial instruments cannot be challenged. The EMI also welcomes the
legislative proposal to apply such provisions to the payment and deliveries orders once they have
become irrevocable within a payment system or securities settlement system. The EMI feels
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that these provisions as well as the introduction of Article 93-2 will improve the smooth and
efficient functioning of payment systems and securities settlement systems.
5. The EMI welcomes the proposed wording of Article 20 of the draft law, paragraph III, of the
draft law granting supervisory powers to the Conseil des Marchés Financiers over central
securities depositories and over the safekeeping and administration of financial instruments. It is
also welcomes that the competencies vested in the Conseil des Marchés Financiers with regard
to the general organisation and operating rules of the securities settlement systems is without
prejudice to the powers of the Banque de France concerning payment systems. However, the
EMI considers convenient that a reference to Article 22 of the Statute of the European System
of Central Banks and of the European Central Bank is included in the new paragraph 16 of the
Financial Activity Modernisation Law no 96-597 of 2 July 1996.
6. The EMI welcomes the provisions of Article 21 of the draft law aiming at enabling intra-day
repurchase agreements in the system RGV (Relit Grande Vitesse) and defining in connection
therewith the moment of transfer of ownership; this will improve and secure the functioning of
such system.
7. With regard to the provisions of Article 34 of the draft law concerning Mayotte and Saint-Pi erre
et Miquelon, and taking into consideration the explanatory memorandum relating to this Article,
the EMI draws the attention of the consulting authority to the following points:
(a) As from 1 January 1999, the currency of the Member States participat ing in EMU will be the
euro and the definition and implementation of the monetary policy within the euro area will be
transferred  to the European System of Central Banks (ESCB). The French overseas
departments will be part of the euro area and the EU Council regulation on the introduction of
the euro will apply to these territories. The IEDOM is the public institution of the Republic of
France responsible for putting in circulation banknotes and coins and supplying liquidity to entities
and persons in the French overseas departments. However, the IEDOM is not an NCB nor is it
vested with the requirements that the Treaty requires for NCBs. Therefore, a first issue which
will need to be clarified concerns the compatibility of the current institutional framework for
monetary matters in the overseas departments with the principle of singleness of the monetary
policy throughout the euro, should France adopt the single currency. The EMI cannot fail to
signal this issue when considering a draft law that extends the jurisdiction of the IEDOM to
Mayotte.
(b) The territorial collectivities of Mayotte and Saint-Pierre et Miquelon are not “French
overseas departments” and thus the EU Council regulation on the introduction of the euro will
not apply to them. The draft French law modifies the geographic scope of the draft EU Council
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regulation on the introduction of the euro by extending its effects outside the Community. It is
questionable whether this pertains to the competencies of a single Member State or whether this
need to be authorised by the Community, as recipient of the monetary powers of the participating
Member States. It is noted that Article 109(3) of the Treaty would not be suited for the purpose
of establishing a monetary regime for those territories, which are neither sovereign States nor
have a currency of their own. It is also noted that Protocol (No 13) does not apply to Mayotte
and Saint-Pierre et Miquelon. There is, therefore, a normative lacuna in the Treaty for the
specific situation of these two territorial collectivities, for the solution of which the EMI is
deprived of appropriate competencies.
The EMI has no objection to this opinion being made public by the consulting authority.
19 February 1998