Opinion of the European Central Bank of 23 August 2007 at the request of the Spanish Ministry for Economic Affairs and Finance on the draft State budget law for 2008 amending Law 41/1999 on payment and securities settlement systems (CON/2007/25)
Date: 2007-08-23
Institutions: European Central Bank
Subjects: Spain, electronic banking, intra-EU payment, national law, payment system

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 23 August 2007  

at the request of the Spanish Ministry for Economic Affairs and Finance 

on the draft State budget law for 2008 amending 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) received 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 Decision 98/415/EC of 29 June 1998 

on  the  consultation  of  the  European  Central  Bank  by  national  authorities  regarding  draft  legislative 
provisions1,  as  the  draft  law  relates  to  payment  and  settlement  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  the  field  of  payment  and  securities 

settlement systems to the Trans-European 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) allowing designated systems to settle credit transfer orders 

not only in an account held with the 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) prohibiting 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. 

General observations  

The ECB welcomes the amendments proposed by the draft 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 the 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  required  by  the  Settlement  Finality  Directive2,  the 

national authorities might consider broadening the concept 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 participants from credit and liquidity risks arising from the failure of the 

cash  settlement  agent  whose  assets  are  used  for  that  purpose.  Also,  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  the  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 participant 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 replacement 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 the Council of 19 May 1998 on settlement finality in payment and 
securities settlement systems (OJ L 166, 11.6.1999, p. 45). 

2