Opinion of the European Central Bank of 30 June 2011 on the harmonisation of legislation related to TARGET2-Securities and Banka Slovenije’s sanctioning powers relating to investment services (CON/2011/55)
Date: 2011-06-30
Institutions: European Central Bank
Subjects: Slovenia, financial instrument, intra-EU payment, national law, payment system, securities

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 30 June 2011  

on the harmonisation of legislation related to TARGET2-Securities and Banka Slovenije’s 

sanctioning powers relating to investment services 

(CON/2011/55) 

Introduction and legal basis 

On 27 May 2011, the European Central Bank (ECB) received a request from the Slovenian Ministry of 

Finance for an opinion on the draft law amending the Law on the market in financial instruments and the 

draft law amending the Law on book-entry securities (hereinafter jointly referred to as the ‘draft laws’). 

On  21  June  2011,  the  Ministry  notified  the  ECB  that  a  new  Article  7  had  been  added  to  the  draft  law 

amending the Law on the market in financial instruments. 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning  of  the  European  Union  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  laws  relate  to  Banka  Slovenije  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 laws 

1.1  The  main  objective  of  the  draft  laws  is  to  harmonise  legislation  governing  the  operation  of 

integrated securities settlement systems in order to facilitate the integration of the Slovenian central 

securities  depository,  Centralna  klirinško  depotna  družba  d.d.,  Ljubljana,  with  TARGET2-

Securities (T2S). To this end, the draft laws introduce the following changes: 

(a)  The  draft  law  amending  the  Law  on  the  market  in  financial  instruments  removes  all 

references  concerning  the  application  of  administrative  procedures  to  the  central  securities 

depository  (CSD).  As  stated  in  the  explanatory  memorandum  to  the  draft  law,  the 

amendments are: (i) made in order to clarify that the CSD does not exercise public authority; 

and  (ii)  necessary  to  allow  the  CSD  to  transfer  its  task  of  effecting  entries  of  book-entry 

securities in the central register to T2S; 

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OJ L 189, 3.7.1998, p. 42.  

 
 
 
 
 
                                                      
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(b)  According  to  Article  34  of  the  Law  on  book-entry  securities,  the  CSD  is  strictly  liable  to 

issuers and holders of rights entered into the central register for any damage caused by the 

CSD’s failure to execute an order, execute it correctly, or meet any of its other obligations 

under the Law. However, the CSD will not be strictly liable where it can prove that the cause 

was  (i)  an  event  beyond  the  scope  of  its  business  and  its  consequences  could  not  be 

anticipated,  avoided  or  averted;  or  (ii)  an  action  on  the  part  of  an  issuer,  holder,  CSD 

member  or  third  party  that  could  not  be  anticipated  and  its  consequences  could  not  be 

avoided or averted. Pursuant to the draft law, strict liability will be replaced by fault-based 

liability  of  the  CSD  vis-à-vis  its  service  users  in  accordance  with  the  law  governing 
obligations2; 

(c)  The draft law amending the Law on book-entry securities also introduces a matching phase 

in the securities transfer between different accounts whereby, prior to carrying out a transfer, 
the CSD must establish that transfer orders from the transferor and the recipient match3.  

1.2  The draft law amending the Law on the market in financial instruments (hereinafter the ‘Law’) is 
also  intended  to  transpose  Directive  2010/78/EU4  into  Slovenian  law.  In  accordance  with  Article 

1(2) of Decision 98/415/EC, the ECB does not provide its opinion on draft legislative provisions 

the  exclusive  purpose  of  which  is  the  transposition  of  Union  directives  in  the  law  of  Member 

States. 

1.3  The draft law amending the Law has been amended to add a new Article 7, which amends Article 

33  of  the  Law.  If  this  amendment  were  made,  Banka  Slovenije  would  no  longer  have  powers  to 

sanction a breach of the Law relating to the provision of investment services by banks in Slovenia. 

Instead, those powers would be transferred to the Slovenian Securities Market Agency (hereinafter 

the  ‘Agency’),  which  is  competent,  in  cooperation  with  Banka  Slovenije  to  supervise  all  of  the 

following  in  respect  of  investment  services:  (a)  Slovenian  banks;  (b)  Member  State  banks  and 

special financial institutions as defined by the Law; (c) third country banks. 

2. 

General observations  

2.1  The ECB welcomes the amendments proposed by the draft laws mentioned in paragraph 1.1, which 

should facilitate the smooth integration of the Slovenian CSD with T2S.  

2.2  As regards the proposed transfer of Banka Slovenije’s sanctioning powers to the Agency, pursuant 

to Article 7 of the draft law amending the Law, the ECB notes that breaches of the Law relating to 

the  provision  of  investment  services  might  affect  the  prudent  and  safe  operations  of  supervised 

entities in general which are subject to prudential supervision by Banka Slovenije. Also, taking into 

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Article 239(2) of the Code of obligations: ‘(2) If a debtor fails to perform its obligation or is late in performing it, the 
creditor shall also be entitled to demand reimbursement of damage incurred thereby.’ 
Article 22(3) of the Law as amended by Article 8 of the draft law. 
Directive  2010/78/EU  of  the  European  Parliament  and  of  the  Council  of  24 November  2010  amending  Directives 
98/26/EC,  2002/87/EC,  2003/6/EC,  2003/41/EC,  2003/71/EC,  2004/39/EC,  2004/109/EC,  2005/60/EC,  2006/48/EC, 
2006/49/EC  and 2009/65/EC  in  respect  of  the  powers  of  the  European  Supervisory  Authority  (European  Banking 
Authority),  the  European  Supervisory  Authority  (European  Insurance  and  Occupational  Pensions  Authority)  and  the 
European Supervisory Authority (European Securities and Markets Authority) (OJ L 331, 15.12.2010, p. 120). 

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account that, according to the Law, supervision in the area concerned is carried out by the Agency 

in  cooperation  with  Banka  Slovenije,  this  warrants  Banka  Slovenije  remaining  involved  in  the 

sanctioning process. Against this background, the ECB expects that any decision on the transfer of 

sanctioning powers should be taken in consultation with Banka Slovenije.  

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

Done at Frankfurt am Main, 30 June 2011. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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