Guideline of the European Central Bank of 11 December 2008 amending Guideline ECB/2006/16 on the legal framework for accounting and financial reporting in the European System of Central Banks (ECB/2008/21)
Date: 2008-12-11
Institutions: European Central Bank
Subjects: European Central Bank, European System of Central Banks, exchange of information, exchange transaction, financial instrument, financial situation, participating country (euro area), standardised accounting system

L 36/46

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Official Journal of the European Union

5.2.2009

GUIDELINE OF THE EUROPEAN CENTRAL BANK

of 11 December 2008

amending Guideline ECB/2006/16 on the legal framework for accounting and financial reporting in
the European System of Central Banks

(ECB/2008/21)

(2009/100/EC)

THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,

(4)

The current rules on equity instruments need to be
amended in order to reflect the possibility to deal with
marketable equities as part of the management of the
ECB’s foreign reserves,

Having regard to the Statute of the European System of Central
Banks and of the European Central Bank (hereinafter the ESCB
Statute), and in particular Articles 12.1, 14.3 and 26.4 thereof,

HAS ADOPTED THIS GUIDELINE:

Having regard to the contribution of the General Council of the
European Central Bank (ECB) pursuant to the second and third
indents of Article 47.2 of the ESCB Statute,

Article 1

Amendments

Guideline ECB/2006/16 is amended as follows:

Whereas:

1. Article 5(2) is replaced by the following:

Guideline ECB/2006/16 of 10 November 2006 on the
legal framework for accounting and financial reporting in
the European System of Central Banks (1) needs to be
amended in order
and
market developments.

to reflect policy decisions

‘2.
Securities transactions including equity instruments
denominated in foreign currency may continue to be
recorded according to the cash/settlement approach. The
related accrued interest
including premiums or discounts
shall be recorded on a daily basis from the spot settlement
date.’;

securities

The Eurosystem has revised its disclosure policy for sec­
urities transactions with a view to enhance further the
transparency of the financial statements. As part of the
that previously qualified as
revised policy,
financial
fixed assets should be reclassified from the
balance sheet item ‘Other financial assets’ to the appro­
priate item under the heading ‘asset’ depending on the
origin of the issuer, the currency denomination and on
whether the securities are held-to-maturity. Moreover, all
instruments that are part of an earmarked
financial
the item ‘Other
portfolio should be included under
financial assets’.

Guideline ECB/2006/16 does not contain specific rules
on the accounting of forward interest rate swaps, foreign
exchange futures and equity futures. Such instruments are
increasingly used in the financial markets and may be
relevant
foreign
reserves. While forward interest rate swaps should be
accounted for in the same manner as ‘plain vanilla’
interest rate swaps, foreign exchange futures and equity
futures should be accounted for in the same manner as
interest rate futures.

to the management of

the ECB’s

(1) OJ L 348, 11.12.2006, p. 1.

2. Article 7 is amended as follows:

(a) Paragraph 2 is replaced by the following:

The

gold,

foreign

revaluation

‘2.
currency
of
instruments, securities other than securities classified as
held-to-maturity and non-marketable securities as well as
financial
instruments, both on-balance sheet and off-
balance sheet, shall be performed as at the quarterly
revaluation date at mid-market rates and prices. This
shall not preclude reporting entities
from revaluing
their portfolios on a more frequent basis for internal
they report
purposes, provided that
in their
balance sheets only at
transaction value during the
quarter.’;

items

(b) The following paragraph 5 is added:

‘5.
Securities classified as held-to maturity and non-
marketable securities shall be valued at amortised costs
and shall be subject to impairment.’;

(1)

(2)

(3)

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3. Article 8(5) is replaced by the following:

‘5.
Reverse transactions, including security lending trans­
actions, conducted under an automated security lending
programme shall only be recorded with effect on the
balance sheet where collateral
is provided in the form of
cash placed on an account of the relevant NCB or the ECB.’;

4. Article 9 is amended as follows:

(a) paragraph 1 is replaced by the following:

is

that

This Article

‘1.
equity
to marketable
applies
instruments,
to say equity shares or equity
funds, whether the transactions are conducted directly
by a reporting entity or by its agent, with the
exception of activities conducted for pension funds, par­
ticipating
in subsidiaries or
investments
interests,
significant interests.’;

(b) paragraph 2 is replaced by the following:

in

Equity

instruments

denominated

‘2.
foreign
currencies and disclosed under “other assets” shall not
form part of the overall currency position but shall be
part of a separate currency holding. The calculation of
the related foreign exchange gains and losses may be
performed either on a net average cost method or an
average cost method.’

(c) paragraph 3 is replaced by the following:

The revaluation of equity portfolios

‘3.
shall be
performed in accordance with Article 7(2). Revaluation
shall take place on an item-by-item basis. For equity
funds, the price revaluation shall be performed on a
net basis, and not on an individual
share-by-share
basis. There shall be no netting between different
equity shares or between different equity funds.’;

(d) the following paragraphs 4 to 8 are added:

Transactions shall be recorded in the balance sheet

‘4.
at transaction price.

5.
Brokerage commission may be recorded either as a
transaction cost to be included in the cost of the asset,
or as an expense in the profit and loss account.

The amount of the dividend purchased shall be
6.
included in the cost of the equity instrument. At ex-
dividend date, the amount of the dividend purchased
may be treated as a separate item until the payment of
the dividend has been received.

7.
Accruals on dividends shall not be booked at end-
of-period as they are already reflected in the market price
of the equity instruments with the exception of equities
quoted ex-dividend.

8.
Rights issues shall be treated as a separate asset
when issued. The acquisition cost shall be calculated
based on the equity’s existing average cost, on the new
acquisition’s strike price, and on the proportion between
existing and new equities. Alternatively, the price of the
right may be based on the right’s value in the market,
the equity’s existing average cost and the equity’s market
price before the rights issue.’;

5. Article 16 is amended as follows:

(a) The heading is replaced by the following:

‘Article 16
Future contracts’

(b) Paragraph 1 is replaced by the following:

Future contracts shall be recorded on the trade

‘1.
date in off-balance-sheet accounts.’

6. Article 17(3) is replaced by the following:

‘3.
Interest rate swaps shall be individually revalued and, if
necessary, translated into euro at the currency spot rate. It is
recommended that unrealised losses taken to the profit and
loss account at
the year-end should be amortised in
subsequent years, that in the case of forward interest rate
swaps the amortisation should begin from value date of the
transaction and that
the amortisation should be linear.
Unrealised revaluation gains shall be credited to a revaluation
account.’

7. Annexes

IV and IX to Guideline ECB/2006/16 are
amended in accordance with the Annex to this Guideline.

II,

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Official Journal of the European Union

5.2.2009

This Guideline shall enter into force on 31 December 2008.

Article 2

Entry into force

This Guideline applies to all Eurosystem central banks.

Article 3

Addressees

Done at Frankfurt am Main, 11 December 2008.

For the Governing Council of the ECB
The President of the ECB

Jean-Claude TRICHET

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Annexes II, IV and IX to Guideline ECB/2006/16 are amended as follows:

ANNEX

1. Annex II is amended as follows:

(a)

the following definition is inserted:

‘Earmarked portfolio: earmarked investment held on the assets side of the balance sheet as a counterpart fund,
consisting of securities, equity instruments, fixed-term deposits and current accounts, participating interests and/or
investments in subsidiaries. It matches an identifiable item on the liabilities side of the balance sheet, irrespective of
any legal or other constraints.’;

(b) the definition of ‘financial fixed assets’ is deleted;

(c)

the following definition is inserted:

‘Held-to-maturity securities: securities with fixed or determinable payments and a fixed maturity, which the NCB
intends to hold until maturity.’;

2. the table entitled ‘Assets’ in Annex IV is replaced by the following:

‘ASSETS

Balance sheet item (1)

Categorisation of contents of
balance sheet items

Valuation principle

Scope of
application (2)

1

1

Gold and gold
receivables

2

2

Claims on non-euro
area residents
denominated in
foreign currency

2.1

2.1

Receivables from the
International
Monetary Fund
(IMF)

Market value

Mandatory

Assets

Physical gold, i.e. bars, coins,
plates, nuggets in storage or
“under way”. Non-physical
gold, such as balances in gold
sight accounts (unallocated
accounts), term deposits and
claims to receive gold arising
from the following trans­
actions: (i) upgrading or
downgrading transactions;
and (ii) gold location or purity
swaps where there is a
difference of more than one
business day between release
and receipt

Claims on counterparties
resident outside the euro area
including international and
supranational institutions and
central banks outside the euro
area denominated in foreign
currency

(a) Drawing rights within the
reserve tranche (net)

(a) Drawing rights within the
reserve tranche (net)

Mandatory

Nominal value, trans­
lation at the foreign
exchange market rate

National quota minus
balances in euro at the
disposal of the IMF. The
No 2 account of the IMF
(euro account for admin­
istrative expenses) may be
included in this item or
under the item “Liabilities
to non-euro area residents
denominated in euro”

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Official Journal of the European Union

5.2.2009

Balance sheet item (1)

Categorisation of contents of
balance sheet items

Valuation principle

Scope of
application (2)

(b) Special drawing rights

(b) Special drawing rights

Mandatory

Holdings of special
drawing rights (gross)

Nominal value, trans­
lation at the foreign
exchange market rate

(c) Other claims

(c) Other claims

Mandatory

2.2

2.2

Balances with banks
and security
investments,
external loans and
other external assets

General arrangements to
borrow, loans under
special borrowing
arrangements, deposits
within the framework of
the Poverty Reduction and
Growth Facility

(a) Balances with banks outside
the euro area other than
those under asset item
“Other financial assets”
Current accounts, fixed-
term deposits, day-to-day
money, reverse repo
transactions

(b) Security investments outside
the euro area other than
those under asset item
“Other financial assets”
Notes and bonds, bills,
zero bonds, money
market paper, equity
instruments held as part
of the foreign reserves, all
issued by non-euro area
residents

Nominal value, trans­
lation at the foreign
exchange market rate

(a) Balances with banks
outside the euro area

Mandatory

Nominal value, trans­
lation at the foreign
exchange market rate

(b)(i) Marketable securities
other than held-to-
maturity

Mandatory

Market price and
foreign exchange
market rate

Any premiums or
discounts are
amortised

(b)(ii) Marketable securities
classified as held-to-
maturity

Mandatory

Cost subject to
impairment and
foreign exchange
market rate

Any premiums or
discounts are
amortised

(b)(iii) Non-marketable
securities

Mandatory

Cost subject to
impairment and
foreign exchange
market rate

Any premiums or
discounts are
amortised

(b)(iv) Marketable equity
instruments

Mandatory

Market price and
foreign exchange
market rate

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Balance sheet item (1)

Categorisation of contents of
balance sheet items

Valuation principle

Scope of
application (2)

3

3

Claims on euro area
residents
denominated in
foreign currency

(c) External loans (deposits)

(c) External loans

Mandatory

outside the euro area other
than those under asset item
“Other financial assets”

Deposits at nominal
value translated at the
foreign exchange
market rate

(d) Other external assets

(d) Other external assets

Mandatory

Non-euro area banknotes
and coins

Nominal value, trans­
lation at the foreign
exchange market rate

(a) Security investments inside
the euro area other than
those under asset item “Other
financial assets”
Notes and bonds, bills,
zero bonds, money
market paper, equity
instruments held as part
of the foreign reserves, all
issued by euro area
residents

(a)(i) Marketable securities
other than held-to-
maturity

Mandatory

Market price and
foreign exchange
market rate

Any premiums or
discounts are
amortised

(a)(ii) Marketable securities
classified as held-to-
maturity

Mandatory

Cost subject to
impairment and
foreign exchange
market rate

Any premiums or
discounts are
amortised

(a)(iii) Non-marketable
securities

Mandatory

Cost subject to
impairment and
foreign exchange
market rate

Any premiums or
discounts are
amortised

(a)(iv) Marketable equity
instruments

Mandatory

Market price and
foreign exchange
market rate

(b) Other claims

Mandatory

Deposits and other
lending at nominal
value, translated at the
foreign exchange
market rate

(b) Other claims on euro area
residents other than those
under asset item “Other
financial assets”
Loans, deposits, reverse
repo transactions, sundry
lending

4

4

Claims on non-euro
area residents
denominated in euro

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Balance sheet item (1)

Categorisation of contents of
balance sheet items

Valuation principle

Scope of
application (2)

Mandatory

(a) Balances with banks
outside the euro area

Nominal value

4.1

4.1

Balances with banks,
security investments
and loans

(a) Balances with banks outside
the euro area other than
those under asset item “Other
financial assets”
Current accounts, fixed-
term deposits, day-to-day
money. Reverse repo
transactions in connection
with the management of
securities denominated in
euro

(b) Security investments outside
the euro area other than
those under asset item “Other
financial assets”
Equity instruments, notes
and bonds, bills, zero
bonds, money market
paper, all issued by non-
euro area residents

(b)(i) Marketable securities
other than held-to-
maturity

Mandatory

Market price

Any premiums or
discounts are
amortised

(b)(ii) Marketable securities
classified as held-to-
maturity

Mandatory

Cost subject to
impairment

Any premiums or
discounts are
amortised

(b)(iii) Non-marketable
securities

Mandatory

Cost subject to
impairment

Any premiums or
discounts are
amortised

(b)(iv) Marketable equity
instruments

Market price

Mandatory

(c) Loans outside the euro area
other than those under asset
item “Other financial assets”

(c) Loans outside the euro

Mandatory

area

Deposits at nominal
value

(d) Securities other than those
under asset item “Other
financial assets”, issued by
entities outside the euro area

Securities issued by supra­
national or international
organisations e.g. the
European Investment
Bank, irrespective of their
geographical location

(d)(i) Marketable securities
other than held-to-
maturity

Mandatory

Market price

Any premiums or
discounts are
amortised

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Balance sheet item (1)

Categorisation of contents of
balance sheet items

Valuation principle

(d)(ii) Marketable securities
classified as held-to-
maturity

Cost subject to
impairment

Any premiums or
discounts are
amortised

Scope of
application (2)

Mandatory

(d)(iii) Non-marketable
securities

Mandatory

Cost subject to
impairment

Any premiums or
discounts are
amortised

4.2

4.2

Claims arising from
the credit facility
under ERM II

Lending according to the ERM
II conditions

Nominal value

Mandatory

5

5

Lending to euro area
credit institutions
related to monetary
policy operations
denominated in euro

5.1

5.1

Main refinancing
operations

5.2

5.2

Longer-term
refinancing
operations

Items 5.1 to 5.5: transactions
according to the respective
monetary policy instruments
described in Annex I to
Guideline ECB/2000/7 of
31 August 2000 on monetary
policy instruments and
procedures of the Euro­
system (3)

Regular liquidity-providing
reverse transactions with a
weekly frequency and
normally a maturity of one
week

Regular liquidity-providing
reverse transactions with a
monthly frequency and
normally a maturity of three
months

Nominal value or repo cost Mandatory

Nominal value or repo cost Mandatory

5.3

5.3

Fine-tuning reverse
operations

Reverse transactions, executed
as ad hoc transactions for
fine-tuning purposes

Nominal value or repo cost Mandatory

5.4

5.4

Structural reverse
operations

5.5

5.5

Marginal lending
facility

Reverse transactions adjusting
the structural position of the
Eurosystem vis-à-vis the
financial sector

Overnight liquidity facility at
a pre-specified interest rate
against eligible assets
(standing facility)

Nominal value or repo cost Mandatory

Nominal value or repo cost Mandatory

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Balance sheet item (1)

Categorisation of contents of
balance sheet items

Valuation principle

Scope of
application (2)

5.6

5.6

Credits related to
margin calls

6

6

Other claims on
euro area credit
institutions
denominated in euro

7

7

Securities of euro
area residents
denominated in euro

Additional credit to credit
institutions, arising from value
increases of underlying assets
regarding other credit to these
credit institutions

Current accounts, fixed-term
deposits, day-to-day money,
reverse repo transactions in
connection with the
management of security port­
folios under the asset item
“Securities of euro area
residents denominated in
euro”, including transactions
resulting from the transfor­
mation of former foreign
currency reserves of the euro
area and other claims. Corre­
spondent accounts with non-
domestic euro area credit
institutions. Other claims and
operations unrelated to
monetary policy operations of
the Eurosystem. Any claims
stemming from monetary
policy operations initiated by
an NCB prior to joining the
Eurosystem

Securities other than those
under asset item “Other
financial assets”: Equity
instruments, notes and bonds,
bills, zero bonds, money
market paper held outright,
including government securit­
ies stemming from before
EMU, denominated in euro;
ECB debt certificates
purchased for fine-tuning
purposes

Nominal value or cost

Mandatory

Nominal value or cost

Mandatory

Mandatory

Mandatory

(i) Marketable securities
other than held-to-
maturity

Market price

Any premiums or
discounts are
amortised

(ii) Marketable securities
classified as held-to-
maturity

Cost subject to
impairment

Any premiums or
discounts are
amortised

(iii) Non-marketable securities

Mandatory

Cost subject to
impairment

Any premium/
discounts are
amortised

(iv) Marketable equity
instruments

Market price

Mandatory

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Balance sheet item (1)

Categorisation of contents of
balance sheet items

Valuation principle

8

8

General government
debt denominated in
euro

Claims on government
stemming from before EMU
(non-marketable securities,
loans)

Deposits/loans at nominal
value, non-marketable
securities at cost

Scope of
application (2)

Mandatory

—

9

Intra-Eurosystem
claims +)

—

9.1

Participating interest
in ECB +)

Only an NCB balance sheet
item

Cost

Mandatory

—

9.2

Claims equivalent to
the transfer of
foreign reserves +)

The ECB capital share of each
NCB according to the Treaty
and the respective capital key
and contributions according
to Article 49.2 of the Statute

Only an NCB balance sheet
item

Euro-denominated claims on
the ECB in respect of initial
and additional transfers of
foreign reserves under the
Treaty provisions

Nominal value

Mandatory

—

9.3

Claims related to
promissory notes
backing the issuance
of ECB debt certi­
ficates +)

Only an ECB balance sheet
item.

Promissory notes issued by
NCBs, due to the back-to-
back agreement in connection
with ECB debt certificates

Nominal value

Mandatory

Nominal value

Mandatory

—

9.4

Net claims related to
the allocation of
euro banknotes
within the Euro­
system +) (*)

For the NCBs: net claim
related to the application of
the banknote allocation key
i.e. including the ECB’s
banknote issue related intra-
Eurosystem balances, the
compensatory amount and its
balancing accounting entry
as defined by Decision
ECB/2001/16 on the allo­
cation of monetary income of
the national central banks of
participating Member States
from the financial year 2002

For the ECB: claims related to
the ECB’s banknote issue,
according to Decision
ECB/2001/15

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Balance sheet item (1)

Categorisation of contents of
balance sheet items

Valuation principle

Scope of
application (2)

—

9.5

Other claims within
the Eurosystem
(net) +)

Net position of the following
sub-items:

(a) Nominal value

Mandatory

(b) Nominal value

Mandatory

(c) Nominal value

Mandatory

(a) net claims arising from
balances of TARGET2
accounts and corre­
spondent accounts of
NCBs i.e. the net figure of
claims and liabilities —
see also liability item
“Other liabilities within
the Eurosystem (net)”

(b) claim due to the difference
between monetary income
to be pooled and redis­
tributed. Only relevant for
the period between
booking of monetary
income as part of the
year-end procedures, and
its settlement on the last
working day in January
each year

(c) other intra-Eurosystem
claims that may arise,
including the interim
distribution of ECB
income on euro
banknotes to NCBs (*)

9

9

9

9

10

Items in the course
of settlement

Settlement account balances
(claims), including the float of
cheques in collection

Nominal value

Mandatory

11

Other assets

11.1 Coins of euro area

Euro coins if an NCB is not
the legal issuer

Nominal value

Mandatory

11.2

Tangible and
intangible fixed
assets

Land and buildings, furniture
and equipment including
computer equipment,
software

Recom­
mended

Cost less depreciation

Depreciation rates:
— computers and related
hardware/software and
motor vehicles:

4 years

— equipment, furniture
and plant in building:

10 years
— building and

capitalised major
refurbishment
expenditure:

25 years

Capitalisation of expen­
diture: limit based (below
EUR 10 000 excluding
VAT: no capitalisation)

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Balance sheet item (1)

Categorisation of contents of
balance sheet items

Valuation principle

Scope of
application (2)

9

11.3 Other financial

assets

— Participating interests and
investments in subsi­
diaries; equities held for
strategic/policy reasons,

— Securities, including
equities, and other
financial instruments and
balances (e.g. fixed term
deposits and current
accounts), held as an
earmarked portfolio,
— Reverse repo transactions
with credit institutions in
connection with the
management of securities
portfolios under this item,

Recom­
mended

Recom­
mended

(a) Marketable equity
instruments

Market price

(b) Participating interests and
illiquid equity shares, and
any other equity
instruments held as
permanent investments

Cost subject to
impairment

(c) Investment in subsidiaries
or significant interests

Recom­
mended

Net asset value

(d) Marketable securities other
than held to maturity

Recom­
mended

Market price

Any premiums or
discounts are amortised

(e) Marketable securities clas­
sified as held-to maturity
or held as a permanent
investment

Recom­
mended

Cost subject to
impairment

Any premiums or
discounts are amortised

Recom­
mended

(f) Non-marketable securities

Cost subject to
impairment

Any premiums or
discounts are amortised

(g) Balances with banks and

loans

Recom­
mended

Nominal value,
translated at the foreign
exchange market rate if
the balances or deposits
are denominated in
foreign currencies

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Balance sheet item (1)

Categorisation of contents of
balance sheet items

Valuation principle

9

9

11.4 Off-balance sheet
instruments
revaluation
differences

11.5 Accruals and prepaid
expenditure

9

11.6

Sundry

Valuation results of foreign
exchange forwards, foreign
exchange swaps, interest rate
swaps, forward rate
agreements, forward trans­
actions in securities, foreign
exchange spot transactions
from trade date to settlement
date

Income not due in, but
assignable to the reported
period. Prepaid expenditure
and accrued interest paid (i.e.
accrued interest purchased
with a security)

Advances, loans and other
minor items. Revaluation
suspense accounts (only
balance sheet item during the
year: unrealised losses at
revaluation dates during the
year, which are not covered
by the respective revaluation
accounts under the liability
item “Revaluation accounts”).
Loans on a trust basis.
Investments related to
customer gold deposits. Coins
denominated in national euro
area currency units. Current
expense (net accumulated
loss), loss of the previous year
before coverage. Net pension
assets

Scope of
application (2)

Mandatory

Net position between
forward and spot, at the
foreign exchange market
rate

Nominal value, foreign
exchange translated at
market rate

Mandatory

Nominal value or cost

Recom­
mended

Revaluation suspense accounts

Revaluation

Revaluation difference
between average cost and
market value, foreign
exchange translated at
market rate

suspense
accounts:
mandatory

Investments related to
customer gold deposits

Market value

Investments
related to
customer gold
deposits:
mandatory

—

12

Loss for the year

Nominal value

Mandatory

(1) The numbering in the first column relates to the balance sheet formats given in Annexes V, VI and VII (weekly financial statements
and consolidated annual balance sheet of the Eurosystem). The numbering in the second column relates to the balance sheet
format given in Annex VIII (annual balance sheet of a central bank). The items marked with a “+)” are consolidated in the
Eurosystem’s weekly financial statements.

(2) The composition and valuation rules listed in this Annex are considered mandatory for the ECB’s accounts and for all material

assets and liabilities in NCBs accounts for Eurosystem purposes, i.e. material to the Eurosystem’s operation.

(3) OJ L 310, 11.12.2000, p. 1.’

3.

in Annex IX, the words ‘Transfer to/from provisions for foreign exchange rate and price risks’ in the first column of
the table under subheading 2,3 are replaced by the words ‘Transfer to/from provisions for foreign exchange rate,
interest rate and gold price risks’.