Guideline of the European Central Bank of 21 June 2001 amending Guideline ECB/2000/1 of 3 February 2000 on the management of the foreign reserve assets of the European Central Bank by the national central banks and the legal documentation for operations involving the foreign reserve assets of the European Central Bank (ECB/2001/5)
Date: 2001-06-21
Institutions: European Central Bank
Subjects: European Central Bank, bank deposit, banking, documentation, financial management, foreign-exchange reserves

L 190/26

EN

Official Journal of the European Communities

12.7.2001

EUROPEAN CENTRAL BANK

GUIDELINE OF THE EUROPEAN CENTRAL BANK

of 21 June 2001

amending Guideline ECB/2000/1 of 3 February 2000 on the management of the foreign reserve
assets of the European Central Bank by the national central banks and the legal documentation for
operations involving the foreign reserve assets of the European Central Bank

(ECB/2001/5)

(2001/526/EC)

THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL
BANK,

(4)

In accordance with Articles 12.1 and 14.3 of the Statute,
ECB guidelines form an integral part of Community law,

Having regard to the Treaty establishing the European
Community (hereinafter referred to as the ‘Treaty’) and in
particular to the third indent of Article 105(2) thereof and to
the third indent of Article 3.1 and Articles 12.1, 14.3 and 30.6
of the Statute of the European System of Central Banks and of
the European Central Bank (hereinafter referred to as the
‘Statute’),

HAS ADOPTED THIS GUIDELINE:

Article 1

Whereas:

‘Article 3a

A new Article 3a shall be inserted in Guideline ECB/2000/1 as
follows:

(1)

(2)

Pursuant to Guideline ECB/2000/1 of 3 February 2000
on the management of the foreign reserve assets of the
European Central Bank by the national central banks
and the legal documentation for operations involving
the European Central
the foreign reserve assets of
Bank (1), each national central bank (NCB) of a partici-
pating Member State shall carry out operations involving
the foreign reserve assets of the European Central Bank
(ECB) as an agent for the ECB.

Minimum standards for the conduct of NCBs in the
management of the ECB's foreign reserve assets

When acting as an agent for the ECB in the management of the
ECB's foreign reserve assets, each NCB shall ensure that its
internal rules related to such management, whether they are
codes of conduct, personnel statutes or any other type of rules
(internal rules) comply with the minimum standards for the
conduct of the NCBs in the management of the ECB's foreign
reserve assets, attached as Annex 4 to this Guideline.’

The ECB considers it necessary for each NCB acting as
agent for the ECB to apply minimum standards for the
the ECB's
conduct of NCBs in the management of
foreign reserve assets. Article 38.1 of
the Statute
provides that members of the governing bodies and the
staff of the ECB and the NCBs shall be required, even
after their duties have ceased, not to disclose informa-
tion of the kind covered by the obligation of profes-
sional secrecy.

Article 2

A new Annex 4 shall be added to Guideline ECB/2000/1 as
follows:

‘ANNEX 4

Minimum standards for the conduct of NCBs in the management
of the ECB's foreign reserve assets

(3)

The ECB considers it appropriate that legal documenta-
tion for operations involving the ECB's foreign reserve
assets be executed with counterparties only on a multi-
branch basis.

(1) OJ L 207, 17.8.2000, p. 24.

1. SCOPE

The internal rules of the NCBs should contain binding provi-
sions ensuring compliance for all NCBs' activities or operations
involving the ECB's foreign reserve assets with these minimum
standards.

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EN

Official Journal of the European Communities

L 190/27

The rules contained herein should be applicable to the
members of NCBs' decision-making bodies and to all NCBs'
employees involved in the management of the ECB's foreign
reserve assets (such employees and the members of decision-
making bodies are hereinafter collectively referred to as “NCBs'
employees”).

These minimum standards are not
intended to exclude or
prejudice the operation of any other more stringent provisions
laid down in NCBs'
internal rules and that apply to NCBs'
employees, and these minimum standards shall also be without
prejudice to the operation of Article 38 of the Statute of the
European System of Central Banks and of the European Central
the governing
Bank, which provides that
bodies and the staff of the ECB and the NCBs shall be required,
even after their duties have ceased, not to disclose information
of the kind covered by the obligation of professional secrecy.

the members of

2. MANAGEMENT SUPERVISION OF OPERATIONS WITH MARKET

COUNTERPARTIES

Control of the activities of all NCBs' employees engaged in
operations with market counterparties is the responsibility of
NCB management. The authorisations and responsibilities
according to which market operators and support staff should
discharge their duties should be clearly set out in writing.

3. AVOIDANCE OF POTENTIAL CONFLICTS OF INTEREST

ferable securities) or rights (including rights under derivatives
contracts) to which that information is closely related.

The NCBs should have appropriate arrangements in place to
enable their management and/or compliance officers to check
that financial transactions entered into by NCBs' employees are
in conformity with this rule, subject to applicable national laws
and labour-market practices. Moreover,
these arrangements
should be strictly limited to compliance checks regarding those
kinds of transactions that could be relevant to the management
of the ECB's foreign reserve assets. Such compliance checks
should only be carried out where there are compelling reasons
for doing so.

5. ENTERTAINMENT AND GIFTS

NCBs' employees may not solicit gifts and entertainment from
third parties in the course of the management of the ECB's
foreign reserve assets, nor may NCBs' employees accept gifts
and entertainment
in excess of a customary or negligible
amount, whether financial or non-financial, that may hinder
their independence and impartiality.

NCBs' employees should be required to inform their manage-
ment about any attempt by a counterparty to offer them such
gifts or entertainment.’

NCBs' employees are required to abstain from being a party to
any economic or financial transactions that may hinder their
independence and impartiality.

Article 3

Annex 3 to Guideline ECB/2000/1 shall be replaced as follows:

NCBs' employees should avoid any situation liable to give rise
to a conflict of interest.

‘ANNEX 3

4. PROHIBITION OF INSIDER TRADING

derivatives operations

Standard agreements

for collateralised and over-the-counter

NCBs should not allow NCBs' employees to conduct insider
information
to pass non-public confidential
trading, nor
obtained at the workplace on to third parties. Moreover, NCBs'
employees may not use non-public ESCB related knowledge
obtained at
the workplace whenever they conduct private
financial transactions.

Insider trading is defined as the activity of any person who, by
virtue of his or her employment, profession or duties, has
access to certain information of a precise nature that could be
relevant to the management of the ECB's foreign reserve assets
before it becomes public and takes advantage of that informa-
tion with full knowledge of the facts by acquiring or disposing
of, either for his or her own account or for the account of a
third party, either directly or indirectly, assets (including trans-

agreements

agreements, buy/sell-back

1. All collateralised operations involving the foreign reserve
assets of the ECB comprising repurchase agreements, reverse
repurchase
and
sell/buy-back agreements are to be documented under the
following standard agreements,
in such form as may be
approved or amended by the ECB from time to time: for
counterparties organised or incorporated under French law,
the “Convention-cadre relative aux opérations de pension
livrée”; for counterparties organised or incorporated under
German law,
the “Rahmenvertrag für echte Pensionsge-
schäfte”; for counterparties organised or incorporated under
the laws of a jurisdiction outside France, Germany and the
United States, the “PSA/ISMA Global Master Repurchase
Agreement”; and for counterparties organised or incor-
porated under US federal or State laws, “The Bond Market
Association Master Repurchase Agreement”.

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Official Journal of the European Communities

12.7.2001

2. All over-the-counter derivative operations involving the foreign reserve assets of the ECB are to be
documented under the following standard agreements, in such form as may be approved or amended by
the ECB from time to time: for counterparties organised or incorporated under French law, the
“Convention-cadre relative aux opérations de marché à terme”; for counterparties organised or incor-
porated under German law, the “Rahmenvertrag für echte Finanztermingeschäfte”; for counterparties
organised or incorporated under the laws of a jurisdiction outside France, Germany and the United
States, the “1992 International Swaps and Derivatives Association Master Agreement” (Multicurrency —
cross-border, English law version); and for counterparties organised or incorporated under US federal or
State laws, the “1992 International Swaps and Derivatives Association Master Agreement” (Multi-
currency — cross-border, New York law version).’

Article 4

Final provisions

This Guideline is addressed to the NCBs.

By 16 August 2001 at the latest, NCBs shall forward details of the texts and means by which they intend to
comply with the minimum standards for their conduct in the management of the ECB's foreign reserve
assets, as required by Article 3a of Guideline ECB/2000/1.

This Guideline shall enter into force on 21 June 2001.

This Guideline shall be published in the Official Journal of the European Communities.

Done at Frankfurt am Main, 21 June 2001.

On behalf of the Governing Council of the
ECB

Willem F. DUISENBERG