Proposal for a Directive of the European Parliament and of the Council on financial collateral arrangements
Date: 2001-03-27
Institutions: European Commission
Subjects: EU Member State, financial control, financial market, financial policy, financial regulation, financial solvency, guarantee

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Proposal for a Directive of the European Parliament and of the Council on financial collateral
arrangements

(2001/C 180 E/32)

COM(2001) 168 final (cid:151) 2001/0086(COD)

(Submitted by the Commission on 27 March 2001)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 95 thereof,

Having regard to the proposal from the Commission,

(4) In order

to improve the legal certainty of collateral
arrangements, Member States should ensure that certain
provisions of
insolvency law do not apply to such
arrangements, in particular, those that would inhibit the
effective realisation of collateral or cast doubt on the
validity of current techniques such as close-out netting,
the provision of additional collateral
in the form of
top-up collateral and substitution of collateral.

Having regard to the opinion of the European Central Bank,

Having regard to the opinion of
Committee,

the Economic and Social

Having regard to the opinion of the Committee of the Regions,

Acting in accordance with the procedure laid down in Article
251 of the Treaty,

Whereas:

securities

settlement

(1) Directive 98/26/EC of the European Parliament and of the
Council of 19 May 1998 on settlement finality in payment
systems (1)
constituted
a
and
framework for
milestone in establishing a sound legal
payment and securities settlement systems.
Implemen-
tation of that Directive has demonstrated the importance
in such systems
of
stemming from the different influence of several
juris-
dictions, and the benefits of common rules in relation
to collateral pledged to such systems.

limiting systemic risk inherent

(2) In its Communication of 11 May 1999 to the European
Parliament and to the Council on Financial Services:
Implementing the Framework for Financial Markets:
Action Plan (2) the Commission undertook, after consul-
tation with market experts and national authorities, to
work on further proposals
legislative action on
collateral urging further progress in the field of collateral,
beyond the Directive 98/26/EC.

for

(3) A Community regime should be created for the provision
of securities and cash as collateral under both pledge and
title transfer structures including repurchase agreements
(repos). This will contribute to the integration and cost-
efficiency of the financial market as well as to the stability
of
thereby
supporting the freedom to provide services and the free
movement of capital
in financial
services. This Directive focuses on the provision of
collateral between two parties to a collateral arrangement.

system in the Community,

in the single market

the financial

(1) OJ L 166, 11.6.1998, p. 45.
(2) COM(1999) 232 final.

(5) The principle in Directive 98/26/EC, whereby the law
applicable to book entry securities provided as collateral
is the law of the jurisdiction where the relevant register,
account or centralised deposit system is located, should be
extended in order to create legal certainty regarding the
use of such securities held in a cross-border context and
used as collateral under the scope of this Directive.

(6) In order

the

to limit

administrative burdens

for
participants using book-entry securities as collateral the
only perfection requirement should be that the interest
be notified to, and recorded by, the relevant entity main-
taining the account, while for bearer
the
perfection requirement should be delivery of the collateral.

securities

(7) The simplification of the use of collateral through the
limitation of administrative burdens will promote the effi-
ciency of the cross-border operations of
the European
Central Bank and the national Central Banks of Member
States participating in the Economic and Monetary Union,
necessary for
common
limited
monetary policy. Furthermore, the provision of
protection of collateral arrangements from some rules of
insolvency law will in addition support the wider aspect
of the common monetary policy, where the participants
in the money market balance the overall amount of
liquidity in the market among themselves, by cross-border
transactions backed by collateral.

implementation of

the

the

(8) The lex rei sitae rule, according to which the applicable law
for determining whether a collateral arrangement
is
properly perfected and therefore good against
third
parties is the law of the country where the collateral is
located, including where the location is in a third country,
is currently recognised by all Member States. The location
If
of book entry collateral should be determined.
the
collateral
collateral
the
arrangement according to the governing law of
is maintained,
country in which the relevant account
whether or not that country is a Member State, then
the validity against any competing title or interest and
enforceability of the collateral should be governed solely
by the law of that country, thus preventing legal uncer-
tainty as a result of other unforeseen legislation.

a valid and effective

taker has

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(9) The possibilities

collateral

counterparties

should also be

for Community

to
arrangements with counterparties
conclude
enhanced, by
from third countries
Member States
certain provisions of
insolvency law do not apply to such arrangements.
Those exceptions
should therefore also apply to a
Community collateral provider where the collateral taker
is from a third country.

ensuring that

(10) The

enforceability of

close-out netting

should be
protected, not only as an enforcement mechanism for
title transfer collateral arrangements including repurchase
agreements but more widely, where close-out netting
forms part of a collateral arrangement. Sound risk
management practices commonly used in the financial
market should be protected by enabling participants to
manage and reduce their credit exposures arising from
all kinds of financial transactions on a net basis, where
the credit exposure is calculated by combining the
estimated current exposures under all outstanding trans-
actions with a counterparty, setting off reciprocal items to
is compared
produce a single aggregated amount
with the current value of the collateral.

that

(11) The sound market practice favoured by regulators where
participants in the financial market use top-up collateral
arrangements to manage and limit their credit risk to each
other by mark-to-market calculations of
the current
market value of
the credit exposure and the value of
the collateral and accordingly ask for top-up collateral
or return the surplus of collateral should be protected.
should be no protection for
However,
the
top-up collateral which is required upon
provision of
collateral
deterioration of
rating of
basic
provider
insolvency
States, which
discourages provisions under which a creditor’s position
is improved as a result of an insolvency-related event.

could
of Member

this
law policy

contradict

because

credit

there

the

the

the

28 June 1999 laying down the procedures for the exercise
of implementing powers conferred on the Commission (1)
they should be adopted by use of
regulatory
procedure provided for in Article 5 of that Decision.

the

(15) This Act complies with the fundamental

rights and
follows the principles laid down in particular in the
Charter of Fundamental Rights of the European Union
as general principles of Community law (2).

(16) In accordance with the principles of subsidiarity and
proportionality, the objectives of the proposed action, to
create a minimum regime relating to the use of financial
collateral, cannot be sufficiently achieved by the Member
States and can therefore, by reason of the scale and effect
of the action be better achieved by the Community. This
Directive confines itself to the minimum required in order
to achieve those objectives and does not go beyond what
is necessary for that purpose,

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Subject matter

This Directive lays down a Community regime in relation to
financial collateral arrangements between a collateral provider
and a collateral taker.

Article 2

Scope of application

This Directive

1.
arrangements which satisfy the requirements
paragraphs 2, 3 and 4.

apply

shall

to

financial

collateral
in

set out

(12) In order to limit the systemic risk in the Community
financial market, the formalities, which may be required
for the execution of a collateral arrangement should be
limited. Penalties for breach of such formalities should not
include the invalidity of a collateral arrangement.

2.
The arrangement must be in writing or evidenced in
writing and signed by or on behalf of the collateral provider.

3.

The arrangement must contain the following provisions:

(13) It should be possible to provide cash as collateral under
both title transfer and pledge structures
respectively
protected by the recognition of netting or by the pledge
of cash collateral. The collateral provider should therefore
the pledged cash and
be able to retain ownership of
consequently be protected in cases where the collateral
taker becomes bankrupt. This is of particular importance
in the frequent situations where cash is used in substi-
tution for securities.

(a)

it must identify the financial collateral to which it applies;
for this purpose it is sufficient if the arrangement identifies
the account to which financial collateral can be credited
from time to time;

(b) it must describe the relevant financial obligations for which
the collateral is provided. Where the relevant financial obli-
gations consist of a specified class or kind of obligations, it
must describe the class or kind of obligation for which the
collateral is provided;

(14) Since the measures necessary for the implementation of
this Directive are measures of general scope within the
meaning of Article 2 of Council Decision 1999/468/EC of

(1) OJ L 184, 17.7.1999, p. 23.
(2) OJ C 364, 18.12.2000, p. 1.

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(c) where the arrangement

it must provide for

is a security financial collateral
arrangement and the financial collateral consists of or
the cash to be
includes cash,
deposited with or transferred to the collateral
taker or
deposited with or transferred to a third party for the
account of the collateral taker or to be deposited in an
account with a third party designated as an account
which is
collateral
arrangement;

security financial

to the

subject

(a)

future, contingent or prospective obligations (including
such obligations arising under a master agreement or
similar arrangement);

(b) obligations owed to the collateral taker by a person other

than the collateral provider; or

(c) obligations of a specified class or kind arising from time to

time.

(d) where the arrangement is a title transfer financial collateral
arrangement and the financial collateral consists of or
includes cash,
the cash to be
deposited with or transferred to the collateral taker or a
third party for the account of the collateral taker;

it must provide for

Article 3

Definitions

1.

For the purpose of this Directive:

it must provide for

(e) where the financial collateral consists of or includes bearer
securities,
to be
to another person
delivered to the collateral
acting as agent or custodian on behalf of the collateral
taker;

those securities

taker or

(f) where the arrangement

is a security financial collateral
arrangement and the financial collateral consists of or
includes book entry securities collateral,
it must provide
for the book entry securities collateral:

(i) to be transferred into a securities collateral account; or

(ii) to be otherwise held and designated so as to indicate
that it is held for the account of the collateral provider
collateral
subject
but
arrangement;

financial

security

the

to

(g) where the arrangement is a title transfer financial collateral
arrangement and the financial collateral consists of or
includes book entry securities collateral,
it must provide
for the book entry securities collateral to be transferred
into an account in the name of the collateral taker or an
account in the name of another person designated by the
collateral taker.

The collateral provider and the collateral taker must each

4.
be:

(a) a public authority or a central bank;

(b) a financial institution under prudential supervision; or

(c) a person other than a natural person whose capital base
exceeds EUR 100 million or whose gross assets exceed
EUR 1 000 million, at the time where financial collateral
is actually delivered, according to the most
recently
prepared account published within a period no greater
than two years prior to that time.

5.
Except as provided by Article 9, this Directive shall not
apply in respect of any financial collateral unless and until that
financial collateral
transferred, held or
is actually delivered,
designated in accordance with the collateral arrangement.

The relevant

6.
collateral arrangement may consist of or include:

financial obligations under a financial

(a)

(b)

(c)

(d)

(cid:145)financial collateral arrangement(cid:146) means a title transfer
financial collateral arrangement or a security financial
collateral arrangement;

(cid:145)title transfer financial collateral arrangement(cid:146) means a sale
and repurchase agreement or an arrangement under which
a collateral provider
financial
the purpose of
collateral
securing the performance of relevant financial obligations;

transfers ownership of

to a collateral

taker,

for

financial

collateral

arrangement(cid:146) means

(cid:145)security
an
arrangement under which a collateral provider disposes
of, or delivers financial collateral by way of security in
favour of, or to, a collateral taker,
for the purpose of
securing the performance of relevant financial obligations,
where ownership of the financial collateral remains with
the financial
the collateral provider unless and until
collateral
is transferred or appropriated to the collateral
taker or transferred to a third party as a result of:

(i) the exercise of

taker
following the occurrence of an enforcement event; or

the rights of

the collateral

(ii) the exercise of a right of use;

financial

(cid:145)sale and repurchase agreement(cid:146) means an agreement under
which a collateral provider sells financial instruments or
interests in or in respect of
instruments to a
collateral taker subject to an agreement by the collateral
provider to purchase and by the collateral taker to sell
equivalent
instruments at a future date (the
(cid:145)repurchase date(cid:146)) or on demand, and at a price (the
(cid:145)repurchase
as
provided in the agreement and includes any term of
such an agreement under which:

determined

specified

financial

in or

price(cid:146)),

(i) either party is obliged to transfer to the other full
ownership of financial collateral in order to maintain
a specified ratio or margin between the current market
value of the equivalent financial instruments due to be
purchased at the repurchase date and the repurchase
price; or

(ii) the collateral provider is entitled, before the repurchase
date, to require the collateral taker to transfer to it full
ownership of financial instruments equivalent to some
or all of those sold in exchange for the transfer to the
collateral
full ownership of other financial
instruments by way of substitution;

taker of

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(e)

(f)

(g)

(h)

(i)

(j)

(k)

(cid:145)collateral provider(cid:146) means the party providing financial
collateral
arrangement,
whether or not that party is from a Member State;

collateral

financial

under

a

(cid:145)collateral
collateral
whether or not that party is from a Member State;

the party receiving financial
arrangement,

taker(cid:146) means
under

collateral

financial

a

a third party acting for the collateral provider, on
which the interest of the collateral taker under that
security financial collateral arrangement has been
noted;

(n)

(cid:145)equivalent collateral(cid:146):

(cid:145)financial collateral(cid:146) means cash in any currency ((cid:145)cash
collateral(cid:146)) and financial instruments;

(i) in relation to an amount of cash, means a payment of

the same amount and in the same currency;

instruments(cid:146) means shares in companies and
(cid:145)financial
other securities equivalent
to shares in companies and
bonds and other forms of securitized debt if these are
negotiable on the capital market and any other securities
normally dealt in giving the right to acquire any such
transferable securities by subscription or exchange or
giving rise to a cash settlement excluding instruments of
in collective
payment
investment undertakings, money market instruments and
interests in or in respect of any of the foregoing;

and it means

as well units

arrangement,

financial obligations(cid:146) means,
collateral

in relation to a
(cid:145)relevant
obligations
in
financial
the
respect of which the financial collateral
is provided and
on the discharge of which the collateral provider is entitled
to the retransfer of the financial collateral or the transfer
of equivalent collateral;

(cid:145)book entry securities collateral(cid:146) means financial collateral
which consists of financial instruments, title to which is
evidenced by entries in a register or account;

(cid:145)relevant intermediary(cid:146) means,
in relation to book entry
securities collateral which is subject to a financial collateral
arrangement, the person (cid:151) who may also be the collateral
provider or the collateral
taker (cid:151) who maintains the
relevant account;

(l)

(cid:145)relevant account(cid:146) means:

(i) in relation to cash collateral, the account to which that

cash collateral is credited;

to a financial collateral arrangement,

(ii) in relation to book entry securities collateral which is
the
subject
in which the entries by which
register or account
that book entry securities collateral
is transferred to
or disposed of in favour of the collateral taker are
made;

(m) (cid:145)securities collateral account(cid:146) means,

in relation to book
entry securities, collateral provided under a security
financial collateral arrangement:

(i) an account with the relevant intermediary in the name
of the collateral taker, or of a third party acting for the
collateral taker, designated as an account for holding
book entry securities collateral under that security
financial collateral arrangement; or

(ii) an account or sub-account with the relevant

inter-
mediary in the name of the collateral provider, or of

(ii) in relation to financial

the same issue and of

the same issuer or debtor,

instruments, means financial
forming
instruments of
the same nominal
part of
a
amount,
financial
the
transfer of other assets following the occurrence of
relating to or affecting any financial
any event
those
instruments provided as
other assets;

and description or, where
arrangement provides

financial collateral,

currency
collateral

for

(o)

(p)

(q)

(r)

(s)

(cid:145)winding-up proceedings(cid:146) means collective proceedings
involving realisation of the assets and distribution of the
proceeds among the creditors, shareholders or members as
appropriate, which necessarily involve any intervention by
administrative or judicial authorities, including where the
collective proceedings are terminated by a composition or
other analogous measure, whether or not they are founded
on insolvency or are voluntary or compulsory;

(cid:145)reorganisation measures(cid:146) means measures involving any
intervention by administrative bodies or judicial auth-
orities which are intended to preserve or restore the
financial situation and which affect pre-existing rights of
third parties,
limited to measures
involving the possibility of a suspension of payments,
suspension of enforcement measures or
reduction of
claims;

including but not

(cid:145)enforcement event(cid:146) means an event on the occurrence of
which, under
collateral
arrangement, the collateral taker is entitled to realise or
appropriate financial collateral or a close-out netting
provision comes into effect;

terms of

financial

the

a

(cid:145)right of use(cid:146) means the right of the collateral taker to use
and dispose of financial collateral held under a security
financial collateral arrangement as though he were the
in accordance with the security
absolute owner of
financial collateral arrangement;

it,

(cid:145)close-out netting provision(cid:146) means a provision of a
financial collateral arrangement, or of an arrangement of
which a financial collateral arrangement forms part, under
which, on the occurrence of an enforcement event:

(i) the relevant financial obligations are accelerated so as
to be immediately due and expressed as an obligation
to pay an amount representing their estimated current
value, or are terminated and replaced by an obligation
to pay such an amount, in either case in accordance
with points (iii) and (iv);

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(ii) any obligation of

taker

to deliver
the collateral
equivalent collateral, or to cause equivalent collateral
to be credited to a securities collateral account,
is
accelerated so as to be immediately performable and
expressed as an obligation to pay an amount repre-
senting its current value or replacement value or its
estimated current value or replacement value, or is
replaced by an obligation to pay such an amount, in
either case in accordance with points (iii) and (iv);

(iii) any obligations arising under point (i) or (ii) which are
expressed in different currencies are converted into
one single currency; and

(iv) an account is taken of what is due from each party to
the other in respect of the obligations arising under
points (i)
to be
discharged by the payment of an aggregate net sum
equal to the balance of the account by the party from
whom the larger amount is due.

to (iii) and those obligations fall

References to (cid:145)writing(cid:146)

include recording in electronic
2.
form and references to (cid:145)signature(cid:146) include electronic signature
with authentication.

Article 4

Formal requirements on financial collateral arrangement

1. Member States shall ensure that
the creation, validity,
perfection, enforceability or admissibility in evidence of a
financial collateral arrangement shall not be dependent on
the performance by the collateral provider or the collateral
taker or by a third party of any formal act beyond those
specified in Article 2(1).

The formal acts referred to in the first paragraph include,

2.
but are not limited to:

(a) the execution of a document in a particular form or in a

particular manner;

(b) the making of any filing with an official or public body or

registration in a public or private register;

(c) advertisement

in a newspaper or journal,

in an official

register or publication or in any other manner;

(d) notification to a public officer, to a custodian or agent or to

any other person;

(e)

the provision of evidence in a particular form as to the date
of execution of a document or instrument, the amount of
the relevant financial obligations or any other matter.

Article 5

Enforcement of financial collateral arrangement

1.
On the occurrence of an enforcement event, the collateral
taker shall be able to realise any of the following financial

collateral provided under, and in accordance with the terms
in, a security financial collateral arrangement:

(a)

financial instruments by sale without any requirement:

(i) that notice of the intention to sell shall have been

given;

(ii) that the terms of the sale be approved by any court,

public officer or other person;

(iii) that the sale be conducted by public auction or in any

other prescribed manner; or

(iv) that any additional time period shall have elapsed.

(b) cash collateral by setting it off against or applying it in
discharge of
financial obligations without any
requirement that prior notice of the intention to realise
the cash collateral shall have been given.

relevant

On the occurrence of an enforcement event, it must be
2.
possible for a close-out netting provision to take effect
in
accordance with its terms without any requirement that prior
notice shall have been given. Paragraph 1(a) applies where the
value of any item taken into account in the close-out netting
provision is or may be determined by reference to the sale of
equivalent securities or any other asset.

3. Member States shall ensure that a financial collateral
arrangement can be enforced in the event of winding-up
proceedings or reorganisation measures. Any of the following
events may be enforcement events if the terms of a financial
collateral arrangement so provide:

(a) the commencement of winding-up proceedings or reorgani-
sation measures in respect of the collateral provider or the
collateral taker;

(b) the occurrence of an event on the basis of which
winding-up proceedings or reorganisation measures could
be commenced in respect of the collateral provider or the
collateral taker;

(c)

the occurrence of an event referred to in point (a) or (b)
followed by the lapse of a specified period without the
event having been reversed or
relevant
cancelled; or

insolvency

(d) the occurrence of an event referred to in point (a), (b) or (c)
coupled with the giving of a notice by the collateral taker,
where the relevant event occurs in relation to the collateral
provider, or by the collateral provider, where the relevant
event occurs in relation to the collateral taker, electing to
treat such occurrence as an enforcement event.

4.
This Article is without prejudice to any requirement
imposed by applicable law, that the realisation or valuation
of
commercially
reasonable manner.

conducted in a

collateral

financial

is

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Article 6

Right of use of financial collateral under security financial
collateral arrangement

taker exercises a right of use, he
1. Where a collateral
thereby incurs an obligation to cause equivalent collateral to
be transferred so as again to be held subject to the security
financial collateral arrangement in the manner referred to in
Article 2(3) or, subject to the discharge of the relevant financial
obligations, to be transferred to the collateral provider.

2. Where a collateral taker, in discharge of an obligation as
described in paragraph 1, causes equivalent collateral to be
transferred so as again to be held in the manner referred to
in Article 2(3), that equivalent collateral shall be subject to the
security financial collateral arrangement to which the original
collateral was subject.

For the purposes of any rule of

3.
law under which any
disposition is deemed to be invalid or may be reversed or
declared void by reason of or by reference to the time at
which it is made, that equivalent collateral shall be treated as
that security
having been delivered or disposed of under
financial collateral arrangement at the time when the original
collateral was first transferred so as to be held in the manner
referred to in Article 2(3).

4.
If an enforcement event occurs while an obligation as
described in paragraph 1 remains outstanding, the obligation
may be the subject of a close-out netting provision.

Article 7

Recognition of title transfer financial collateral
arrangements

If a financial collateral arrangement provides that ownership of
financial collateral is to pass to the collateral taker on delivery
or payment, subject
to an obligation to deliver equivalent
collateral, Member States shall recognise that ownership of
in
the financial collateral passes
accordance with the arrangement.

to the collateral

taker

Article 8

Recognition of close-out netting provisions

1.
A close-out netting provision shall be effective notwith-
standing the commencement or continuation of winding-up
the
proceedings or
collateral provider and/or the collateral taker.

reorganisation measures

in respect of

2. Where under
collateral provider:

a

financial

collateral

arrangement

a

(a) has

an obligation to provide

collateral or
additional financial collateral in order to take account of
changes in the value of the financial collateral or in the
amount of the relevant financial obligations; or

financial

(b) has a right to withdraw financial collateral on providing, by
financial collateral of

way of substitution or exchange,
substantially the same value;

the financial collateral, additional

financial
the provision of
collateral or substitute or replacement financial collateral shall
not be treated as invalid, defective or voidable under any such
rule of law as is described in paragraph 3 unless, and then only
to the extent that, the financial collateral arrangement is itself
treated as invalid, defective or voidable.

Paragraphs 1 and 2 apply to any rule of law under which
3.
a disposition or transfer of financial collateral
is or may be
deemed to be invalid, or may be reversed or declared void if
made within a prescribed period defined by reference to the
commencement of winding-up proceedings or reorganisation
measures or by reference to the making of any order or
decree or the taking of any other action or occurrence of
any other event
such proceedings or
measures. This includes any rule under which an order or
decree made in the course of such proceedings or measures
takes effect from a time earlier than the time when it is actually
made.

in the course of

Article 10

Conflict of laws

1.
Any question with respect to any of the matters specified
in paragraph 3 arising in relation to the application of a
financial collateral arrangement to any book entry securities
collateral or cash collateral shall be governed by the law of
the country or, where appropriate, the law of the part of the
country in which the relevant account is maintained, whether
or not that country is a Member State. The reference to the law
of a country or part of a country is a reference to its domestic
law, disregarding any rule under which, in deciding the relevant
question, reference would be made to the law of another
country.

A relevant account shall be treated for the purposes of

2.
this Article as maintained at any given time:

A close-out netting provision shall be effective in
terms notwithstanding any purported
judicial or other attachment or other disposition

2.
accordance with its
assignment,
of or in respect of such rights.

Article 9

Certain insolvency provisions disapplied

1. Winding-up proceedings or reorganisation measures shall
not have retroactive effects on the rights and obligations under
a financial collateral arrangement.

(a) at

the relevant
governing

the office or branch of
agreement

intermediary
relevant
the
identified in the
account, provided that the relevant intermediary allocates
the relevant account to that office or branch for purposes
of reporting to its account holders or for regulatory or
accounting purposes;

(b) where the relevant intermediary is legally established or,
where the relevant intermediary is acting in relation to
the
that
branch is legally established, in any other case.

through a branch, where

relevant account

C 180 E/318

EN

Official Journal of the European Communities

26.6.2001

3.

The matters referred to in paragraph 1 are:

(a) the creation of any title to or interest in the book entry
securities collateral arising under the financial collateral
arrangement and the ranking or priority of any such title
or interest as against any competing title or interest claimed
by another person;

(b) any act or thing necessary to ensure that any title to or
interest in the book entry securities collateral arising under
collateral arrangement may be asserted
the
generally against third parties;

financial

(c)

the realisation of

the occurrence of

the collateral
the steps required for
following
event,
including any act or thing necessary to ensure that any
the collateral will be effective generally as
disposal of
against persons who are not parties
to the financial
collateral arrangement.

an enforcement

Article 11

Updating of thresholds

The Commission shall update the thresholds relating to capital
base and gross assets in Article 2(4)(c) in order to adjust to
development
In updating those
thresholds the Commission shall act in accordance with the
procedure referred to in Article 12(2).

in the market practice.

Article 12

Committee

The Commission shall be assisted by the [Securities

1.
Committee], instituted by . . .

2. Where reference is made to this paragraph, the regulatory
procedure laid down in Article 5 of Decision 1999/468/EC
shall apply,
in compliance with Article 7 [and Article 8]
thereof.

The period provided for in Article 5(6) of Decision

3.
1999/468/EC shall be [maximum of three months].

Article 13

Implementation

Member States shall bring into force the laws, regulations and
administrative provisions necessary to comply with this
Directive by [31 December 2004] at the latest. They shall
forthwith inform the Commission thereof.

When Member States adopt those provisions, they shall contain
a reference to this Directive or be accompanied by such a
reference on the occasion of
their official publication.
Member States shall determine how such reference is to be
made.

Article 14

Entry into force

This Directive shall enter into force on the twentieth day
following that of its publication in the Official Journal of the
European Communities.

Article 15

Addressees

This Directive is addressed to the Member States.