Opinion of the European Central Bank of 17 July 1998 at the request of the Banque de France under Article 109f (6) of the Treaty establishing the European Community (the "Treaty") and Article 5.3 of the Statute of the EMI on a draft Decision No. 98-01 of the Monetary Policy Council relating to the collection of statistical information from UCITS (CON/98/30)
Date: 1998-07-17
Institutions: European Central Bank
Subjects: France, account, balance of payments, data collection, national law, statistics

OPINION OF THE EUROPEAN CENTRAL BANK

of 17 July 1998

at the request of the Banque de France under Article 109f (6) of the Treaty establishing

the European Community (the “Treaty”) and Article 5.3 of the Statute of the EMI on a

draft Decision No. 98-01 of the Monetary Policy Council relating to the collection of

statistical information from UCITS

CON/98/30

1.  On 22 May 1998 the European Monetary Institute (hereinafter referred to as the “EMI”) received

a  request  from  the  Banque  de  France  for  an  opinion  on  a  draft  Decision  No. 98-01  of  the

Monetary  Policy  Council  relating  to  the  collection  of  statistical  information  from  UCITS

(hereinafter referred to as the “draft Decision”).

2. 

In  accordance  with  Article  109l (2)  of  the  Treaty,  the  European  Central  Bank  (hereinafter

referred to as the “ECB”) has taken over the advisory functions of the EMI, which has gone into

liquidation upon the establishment of the ECB on 1 June 1998. The ECB’s competence to deliver

an  opinion  is  based  on  Article  1.1,  third  indent,  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  main  aim  of  the  draft  Decision  is  to  allow  the  collection  of  the  statistical  information

necessary for the production of the monetary statistics, as well as of the financial statistics and

the balance of payments statistics, described in the EMI report entitled “Statistical Requirements

for Stage Three of Monetary Union - Implementation Package” (July 1996) (hereinafter referred

to as the “Implementation Package”).

4.  The ECB welcomes the draft Decision, since it should enable the reporting requirements set out

in  the  Implementation  Package  to  be  fulfilled.  However,  while  the  Implementation  Package

provides  that  monthly  data  will  be  available  as  from  reference  period  June  1998  and  quarterly

data as from reference period December 1998, the draft Decision provides for compliance on the

part of reporting agents only as from March 1999. While it is understood that good estimates can

be  provided  on  a  temporary  basis,  the  ECB  recommends  that  every  effort  should  be  made  to

bring forward the implementation of the draft Decision to the reference period ending December

 
 
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1998  for  all  frequencies  involved.  Otherwise,  the  following  Sections  put  forward  by  area  of

statistics a number of important technical points to take into account.

 Money and Banking Statistics

5.  Article 2 of the draft Decision sets the timeliness of monthly reporting by reporting institutions at

a maximum of ten working days. The ECB approves  this  deadline  on  the  understanding  that  it

will allow the Banque de France to comply with the ECB’s deadline of fifteen working days for

receipt of the aggregated statistical information covering the Money  Market  Funds  (hereinafter

referred to as “MMFs”).

6.  With  regard  to  Article 6,  the  threshold  for  reporting  adopted  in  the  Implementation  Package  is

not  an  absolute  amount  but  is  expressed  as  a  percentage  (95%)  of  the  total  national  Monetary

Financial Institutions (hereinafter referred to as “MFIs”) balance sheet. It is understood that the

threshold  set  out  in  Article 6  and  Annex 4  of  the  draft  Decision  is  consistent  with  the

Implementation Package and represents the result of the above-mentioned percentage.

7.  Concerning  Annex  1  “Accounting  Situation”,  Part  1  “Common  Provisions”,  1.1  “Nature  of

Information”, the accounting principles set out in the Money and Banking Statistics Compilation

Guide,  as  published  by  the  EMI  in  April  1998  (hereinafter  referred  to  as  the  ‘Compilation

Guide’),  foresee  as  the  preferred  method  for  the  valuation  of  securities  the  “current  market

values”,  while  allowing  for  a  degree  of  flexibility.  The  ECB  notes  that  this  is  appropriately

reflected in the draft Decision. With respect to 1.3 “Notion of counterparty”, the ECB is pleased

to note that the coverage of the required information on counterparties allows for fulfilment of its

reporting  requirements.  Part  2.2.2  “Characteristics  of  purchase  transactions  and  temporary

transfers, and of transfers on transferable securities” sets out guidelines to be followed by UCITS

in the treatment of repurchase agreements and similar operations (securities lending operations,

buy-back  and  sell-back  agreements).  While  these  proposals  are  not  consistent  with  the

recommendations  in  the  Compilation  Guide,  the  ECB  notes  that  the  draft  Decision  would

nevertheless provide sufficient information to ensure that the Banque de France is in a position to

prepare (output) statistics that fully comply with the Compilation Guide.

8.  Regarding Annex 7, Nomenclature of attributes, the ECB is pleased to note the following points:

Nomenclature  No.1,  Classification  of  UCITS,  allows  for  a  separate  identification  of  MMFs

(“Monétaires  euro”  and  “Monétaires  à  vocation  internationale”)  and  is  in  line  with  the  ECB

reporting  requirements.  In  Nomenclature  No.4,  Original  Maturity,  the  maturity  breakdown

 
 
 
 
 
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foreseen is in line with the ECB reporting requirements. In Nomenclature No. 13, Countries and

Currencies codes, Undetermined countries, the reference to Intra-EU and Extra-EU is used in the

draft Decision for the euro area; for the sake of clarity it may be preferable to use the acronyms

Intra-MU  and  Extra-MU.  In  Nomenclature  No.14,  Institutional  sectors,  the  sectoral  breakdown

envisaged is in line with the ECB reporting requirements, in particular as it allows the separate

identification of positions vis-à-vis NCBs, credit institutions and MMFs.

9.  Regarding Annex 8, Detailed Nomenclature of Institutional Sectors, section N Credit Institutions:

the draft Decision foresees the classification of the Treasury and the Post Office within section N

(Credit  Institutions).  It  is  understood  that  these  will  be  classified  as  part  of  the  Central

Government sector and that the statistical information on their deposit and close substitutes for

deposit  liabilities  will  be  reported  to  the  ECB  in  the  context  of  the  supplementary  data  to  the

consolidated balance sheet of the MFI Sector.

 Balance of Payments Statistics

10.  The  Banque  de  France’s  draft  Decision  for  reporting  by  UCITS  will  include  a  detailed

geographical  breakdown  for  monthly,  quarterly  and  annual  data.  The  ECB  approves  these

provisions,  it  being  understood,  however,  that  such  geographical  breakdown  exceeds  the

requirements  of  the  Implementation  Package  in  relation  to  the  compilation  of  the  monthly  key

items for which no geographical breakdown is required by the ECB.

11.  On  a  quarterly  basis,  the  sectoral  breakdown  required  by  the  Implementation  Package  within

Portfolio Investment and Other Investment requires the inclusion of the flows relating to MMFs

in  those  of  the  MFIs,  whereas  the  other  UCITS  are  recorded  within  the  “other  sectors”.  By

contrast, on a monthly basis, the sectoral breakdown is only required in Other Investment, with a

maturity split for the MFIs (including MMFs). For Portfolio Investment the draft decision would

enable a distinction between assets held by MMFs (included in the MFIs) and those held by other

UCITS, beyond the requirements of the Implementation Package.

12.  The ECB is pleased to note that the required breakdowns by instrument in Portfolio Investment

(equity securities, debt securities, bonds and notes etc.) and the required breakdowns for Other

Investment (loans/currency and deposits, other assets) can be met. In addition, the split between

Monetary Union Member States issuers and non-Monetary Union Member States issuers can be

delivered.

 
 
 
 
 
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13.  The ECB notes that similar breakdowns to those mentioned above for flows can be provided for

the International Investment Position.

14.  As regards the different categories of securities, the draft Decision (see Annex 7 “Nomenclature

No.6”) classifies euro-medium term notes amongst certificats de dépôt or BISF when issued by

MFIs. The agreed treatment of these items in the EMU BOP is that they should be considered as

“bonds  and  notes”.  Moreover,  the  text  mentioned  above  does  not  explicitly  state  that  EMTN

issued by other sectors should be considered as equivalents of BMTN. 

15.  According  to  the  draft  Decision,  UCITS’  reported  assets  should  be  valued  according  to  the

accounting method used for each item. In this respect the ECB notes that the accounting methods

comply with the IMF Balance of Payments Manual (5th edition) as far as for financial assets the

accounting rule is valuation at current market prices, whereas for deposits and loans the method

is the book value. 

 Financial Accounts Statistics

16.  To  the  extent  that  the  information  collected  from  UCITS  should  enable  full  compliance  at  the

statistical level with the Compilation Guide mentioned above, the draft Decision also complies to

a high degree with other statistical requirements set out in the Implementation Package and based

on the harmonised accounting rules laid down in European System of Accounts 1995 (hereinafter

referred to as “ESA 95”), such as Financial Accounts Statistics.

17.  The ECB appreciates that all classification requirements are included in the various Annexes of

the draft Decision which are necessary for the successful integration of the statistical information

from UCITS into Financial Accounts Statistics. The sectoral breakdown described in Annex 8 is

fully in line with ESA 95; the whom-to-whom classification of securities (held and issued) gives

extensive  flexibility  to  compilers  of  financial  accounts.  Sufficient  breakdowns  by  maturity,

currency  and  country  are  also  incorporated.  Furthermore,  data  on  financial  derivatives  and

accrued  interest  are  available  with  the  appropriate  instrument  and  sector  splits.  However,  if

possible,  it  is  recommended  to  show  for  each  individual  security  the  amount  outstanding  and

accrued interest.

18.  The ECB is pleased to note that the “mark to market valuation” of assets and liabilities facilitates

the derivation of a full set of Financial Accounts Statistics as proposed in the ESA  95,  i.e.  the

 
 
 
 
 
 
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accounts  for  financial  transactions,  other  flows,  such  as  revaluations  and  other  changes  in

volume, and the financial balance sheets. It also provides additional information of high quality

which could be used as reference data for various (non-financial) counterpart sectors.

For the President of the ECB

[signed]

Christian Noyer
Vice-President