Opinion of the European Central Bank of 21 September 2007 at the request of Banca Naţională a României on a draft regulation on oversight of payment systems, securities settlement systems and payment instruments (CON/2007/27)
Date: 2007-09-21
Institutions: European Central Bank
Subjects: Romania, central bank, financial supervision, national law, payment system

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 21 September 2007 

at the request of Banca Naţională a României 

on a draft regulation on oversight of payment systems, securities settlement systems and payment 

instruments 

(CON/2007/27) 

Introduction and legal basis 

On 30 July 2007 the European Central Bank (ECB) received a request from Banca Naţională a României 

(BNR) for an opinion on a draft regulation on oversight of payment systems, securities settlement systems 

and payment instruments (hereinafter the ‘draft regulation’). 

The  ECB’s  competence  to  deliver  an  opinion  is  based  on  Article  105(4)  of  the  Treaty  establishing  the 

European  Community  and  the  third  and  fifth  indents  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  regulation  relates  to  BNR  and  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 regulation 

1.1  The  draft  regulation  sets  up  the  regulatory  framework  for  the  oversight  by  BNR  of  payment 

systems,  securities  settlement  systems  and  payment  instruments.  In  particular,  it  specifies:  (i)  the 

categories  of  systems  and  entities  subject  to  oversight;  (ii)  the  requirements  for  operators  of 

payment  systems,  securities  settlement  systems  and  infrastructure  services  and  for  persons  who 

issue/put into circulation and/or manage payment instruments; and (iii) the oversight activities to be 

carried out by BNR to ensure the smooth functioning of these systems  and, ultimately, to ensure 

financial  stability,  including  BNR’s  right  to  carry  out  on-site  inspections  to  obtain  and  verify 

information.  

1.2  The  draft  regulation  is  issued  on  the  basis  of  Article  405  of  Government  Urgency  Ordinance 
No 99/ 2006  on  credit  institutions  and  capital  adequacy2  (hereinafter  the  ‘GUO  99/2006’),  which 

1  
2 

OJ L 189, 3.7.1998, p. 42.  
Published  in  the  Monitorul  Oficial  al  României,  Part  One,  No  1027,  27.12.2006,  as  amended  and  approved  by  Law 
No 227/2007, published in the Monitorul Oficial al României, Part One, No 480, 18.7.2007. 

 
 
 
 
                                                 
establishes  that  BNR  ‘shall  issue  regulations’  concerning  payment  and  securities  settlement 

systems, and, in particular, ‘the criteria and the rules for the supervision of the systems, including 

the participants in these systems and their operators’.  

2. 

General observations  

2.1  The ECB welcomes the draft regulation which establishes the rules applicable to the oversight of 

payment systems, securities settlement systems and payment instruments, as the oversight function 

is inherent in the central banks’ task of promoting a sound market infrastructure to safeguard the 
effectiveness of monetary policy and the overall stability of the financial system3.  

2.2  As mentioned in previous ECB opinions4, payment systems and securities settlement systems are 

interlinked,  particularly  in  view  of  the  use  of  the  ‘delivery  versus  payment’  mechanism,  under 

which settlements of securities and transfers of funds take place simultaneously. There is therefore 

a strong argument in favour of the model used in some Member States of integrating the oversight 

of payment systems and securities settlement systems, and for the national central banks (NCBs) to 

perform the oversight function. 

2.3  The oversight of payment systems has always been recognised as one of the NCBs’ main tasks and 

the framework for this function has been effective and successful. Article 2(2)(b) and Article 22(1) 
of Law No 312/2004 on the Statute of Banca Naţională a României5, which entitle BNR to oversee 

payment  systems,  including  payment  instruments,  Article  404  of  GUO  99/2006,  which  entitles 

BNR  to  regulate,  authorise  and  supervise  the  payment  systems  and  securities  settlement  systems 
from Romania, including their operators, Article 405 of GUO 99/2006 and Article 13(4)6 of Law 
No  253/2004  on  settlement  finality  in  payment  and  securities  settlement  systems7,  reflect,  at  the 

national  level,  the  general  legal  framework  for  the  oversight  of  payment  systems  created  at  the 
Community level through Article 105(2)8 of the Treaty and Article 3.1 and Article 22 of the Statute 

of  the  European  System  of  Central  Banks  and  of  the  European  Central  Bank    (hereinafter  the 

3  

4  
5  
6  

7  
8  

See, e.g. ECB Opinions CON/2005/24 of 15 July 2005 at the request of the Ministry of Finance of the Czech Republic on 
a draft law on the integration of financial market supervisors; CON/2003/14 of 7 August 2003 at the request of Banca 
d’Italia on a draft regulation on payment systems, payment infrastructures and payment instruments; and CON/99/19 of 
20  January  2000  at  the  request  of  the  Luxembourg  Ministry  for  the  Treasury  and  the  Budget  on  a  draft  legislative 
proposal implementing Directive 98/26/EC on settlement finality in payment and securities settlement systems in the law 
of  5  April  1993,  as  amended,  relating  to  the  financial  sector  and  completing  the  law  of  23  December  1998  creating  a 
commission in charge of the prudential supervision of the financial sector. See also the Bank for International Settlements 
(BIS)  Committee  on  Payment  and  Settlement  Systems,  ‘Central  bank  oversight  of  payment  and  settlement  systems’, 
May 2005, available on the BIS website at www.bis.org.  
See ECB Opinion CON/2006/20 of 25 April 2006 on the Dutch draft law concerning financial sector supervision. 
Published in the Monitorul Oficial al României, Part One, No 582, 30.6.2004. 
‘Banca Naţională a României will permanently oversee the payment systems and the securities settlement systems which 
settle through systemically important payment systems or through payment systems of prominent importance.’ 
Published in the Monitorul Oficial al României, Part One, No 566, 28.6.2004. 
Article 105(2) of the Treaty states that ‘[t]he basic tasks to be carried out through the ESCB shall be … to promote the 
smooth operation of payment systems.’ 

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‘ESCB Statute’)9. 

2.4  Within  the  Eurosystem,  oversight  activities  are  performed  by  NCBs  in  line  with  the  common 

oversight policy, as defined by the ECB’s Governing Council. This will also apply to BNR once 

Romania adopts the euro. Furthermore, on Romania’s adoption of the euro the securities settlement 

system selected to provide securities settlement of central bank credit operations will be assessed 

against  the  Eurosystem  standards  for  the  use  of  European  Union  securities  settlement  systems  in 
ESCB  credit  operations10.  For  that  reason,  this  opinion  is  without  prejudice  to  any  future  ECB 

assessment  of  the  securities  settlement  system  selected  to  provide  securities  settlement  of  central 
bank credit operations against the abovementioned standards11. 

2.5  The explanatory memorandum states that BNR will issue norms which will specify the standards 

and  the  methodology  for  carrying  out  an  assessment  for  each  type  of  system.  Once  such  draft 

provisions  are  prepared,  BNR  should  consider  whether  these  are  also  subject  to  the  duty  of 

consultation  which  stems  from  Article  105(4)  of  the  Treaty  and  Decision  98/415/EC.  ‘Given  the 

objectives of Decision 98/415/EC … an opinion should only be sought from the ECB on such draft 

secondary legislation if the subject matter is closely related to the ECB’s tasks and if the impact on 

areas  within  the  ECB’s  fields  of  competence  is  different  from  that  resulting  from  the  primary 
legislation itself.’12  

3. 

Specific observations 

3.1  The  ECB  recommends  clarifying  the  definitions  of  ‘payment  system’  and  ‘securities  settlement 

system’ set out in Article 2(4) and (6) of the draft regulation to avoid uncertainties, in particular in 

view of the definition of ‘system’ contained in Law No 253/2004 on settlement finality in payment 

and  securities  settlement  systems,  which  implements  the  Directive  on  settlement  finality  in 
payment  and  securities  settlement  systems13.  Furthermore, 

the  definition  of  ‘significant 

infrastructure’  in  Article  2(8)  is  rather  open-ended.  Therefore,  the  ECB  would  encourage 

establishing  objective  and  transparent  criteria,  and  making  them  publicly  available.  In  addition, 

there  is  no  reference  to  the  oversight  of  clearing  systems.  Therefore,  the  draft  regulation  should 

include clearing systems in the scope of oversight conducted by BNR. 

9  

10  
11  

12  

13  

Article 3.1 of the ESCB Statute states that ‘[i]n accordance with Article 105(2) of this Treaty, the basic tasks to be carried 
out through the ESCB shall be … to promote the smooth operation of payment systems.’ Article 22 states that ‘[t]he ECB 
and  national  central  banks  may  provide  facilities,  and  the  ECB  may  make  regulations,  to  ensure  efficient  and  sound 
clearing and payment systems within the Community and with other countries’. See also Article 34.2, which states that a 
‘regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States.’ 
The standards are available on the ECB’s website at www.ecb.int. 
See ECB Opinion CON/2006/52 of 14 November 2006 at the request of Latvijas Banka on a draft regulation on Latvijas 
Banka's securities settlement system, paragraph 2.1. 
Guide to consultation of the European Central Bank by national authorities regarding draft legislative provisions, p. 14, 
available on the  ECB’s website at www.ecb.int. 
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, 11.6.1998, p. 45). 

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3.2  Article  3(f)  and  Article  7  refer  to  ‘persons  that  issue  and/or  manage  payment  instruments’  and 

provide  for  their  obligations  under  the  draft  regulation,  respectively.  The  scope  of  the  term 

‘persons’ in these articles, as well as in the definition of ‘infrastructure’ in Article 2(7) of the draft 

regulation,  is  unclear  and  could  lead  to  legal  uncertainty;  therefore,  the  range  of  entities  that  fall 

within this category require clarification. 

3.3 

In  line  with  Article  6  of  the  draft  regulation,  which  mentions  several  measures  to  address 

operational  risks,  BNR  could  consider  also  mentioning  operational  risk  more  generally  in 

Article 5 (1)(b). 

3.4  According  to  Article  6(2)(b)  significant  infrastructure  services  operators  ‘shall  have  the  ... 

obligation  …  to  promote  interconnection  with  other  infrastructures’.  Since  this  constitutes  a 

requirement imposed on entities subject to the scope of the draft regulation, against which they will 

be  assessed,  the  obligation  contained  in  this  rule  needs  to  be  further  clarified,  because  its  exact 
content and scope of application is unclear14. 

3.5  Article  14  states  that  BNR  will  use  the  information  and  data  collected  pursuant  to  Chapter  III, 

Section I of the draft regulation to assess compliance by the entities subject to the draft regulation 

with  specific  requirements  and  principles  applied  by  BNR  in  the  field  of  oversight  of  payment 

systems, securities settlement systems and payment instruments. The ECB recommends adding to 

this  purpose  a  more  general  purpose,  which  is  the  provision  of  data  for  participation  in  ESCB-

related tasks and also ensuring the general availability of information.  

3.6  With regard to the assessment of systems, ‘the objectives and responsibilities as well as roles and 
major policies of … the central bank should be clearly defined and publicly disclosed’15. Although 
there is a Memorandum of understanding16 between BNR, the National Securities Commission and 

the  Insurance  Supervisory  Commission  on  cooperation  aimed  at  promoting  the  stability  of  the 

financial  system  under  which  the  parties  agree  to  exchange  information  to  ensure  the  proper 

licensing,  regulation  and  supervision  of  the  financial  system,  BNR  could  also  set  out  the  criteria 

under which BNR and the National Securities Commission may exchange information in the draft 

regulation. 

14  

15  
16  

See paragraph 13 of ECB Opinion CON/2003/14 of 7 August 2003 at the request of Banca d’Italia on a draft regulation 
on payment systems, payment infrastructures and payment instruments. 
See CPSS-IOSCO Recommendations for securities settlement systems, 2001, No 18, paragraph 3.86. 
Signed on 10 March 2006, as amended by the Additional Act No 1 of 14.12.2006. 

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3.7  Article  16(b)  of  the  draft  regulation  states  that  BNR  ‘may  apply  sanctions,  according  to  banking 

legislation’, if the persons performing activities subject to the scope of the draft regulation do not 

comply with the recommendations and/or adjustments set out by BNR. As the entities subject to the 

scope  of  the  draft  regulation  may  not  always  be  credit  institutions,  the  reference  to  banking 

legislation under this Article 16(b) seems ambiguous regarding its scope of application. 

This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 21 September 2007. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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