Opinion of the European Central Bank of 10 February 2012 on the system for monitoring transactions in book-entry securities (CON/2012/8)
Date: 2012-02-10
Institutions: European Central Bank
Subjects: Greece, central bank, financial instrument, national law, payment system, securities

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 10 February 2012 

on the system for monitoring transactions in book-entry securities 

(CON/2012/8) 

Introduction and legal basis 

On  27 January  2012,  the  European  Central  Bank  (ECB)  received  a  request  from  the  Greek  Ministry  of 

Finance for an opinion on a set of draft legislative provisions (hereinafter the ‘draft provisions’) amending 
Law  2198/19941  in  relation  to  the  entry  of  financial  instruments  and  interests  therein  in  the  system  for 

monitoring transactions in book-entry securities. 

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  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  provisions2,  as  the  draft  law  relates  to  the  Bank  of  Greece  and  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 provisions 

1.1  The draft provisions aim at enhancing the legal framework governing the operation of the system 

for  monitoring  transactions  in  book-entry  securities  (hereinafter  the  ‘System’)  established  by 

Law 2198/1994  to  monitor  transactions  in  book-entry  securities,  in  particular  as  regards  the 

possibility  for  financial  instruments  other  than  Greek  government  bonds  to  be  entered  in  the 

System.  The  Bank  of  Greece  manages  the  System.  The  proposed  measures  introduce  new 

categories of financial instruments that may be entered into the System (hereinafter the ‘financial 
instruments’)3 and provide four main possibilities for such instruments and interests therein to be 

entered into the System. 

1.2  Draft Article 11(1) provides the possibility for financial instruments to be issued for the first time 

in the System by Greek or foreign issuers. Draft Article 11(2) provides the possibility for financial 

instruments already issued by Greek or foreign issuers outside the System, and for interests therein, 

1  
2  
3  

FEK A 43, 22.3.1994. 
OJ L 189, 3.7.1998, p. 42.  
These  are  the  transferable  securities  provided  for  in  Article  2(13)  of  Law  3607/2007,  with  the  exception  of  shares  in 
companies,  and  money  market  instruments  provided  for  in  Article  2(14).  Law  3606/2007  (FEK  175A,  17.8.2007) 
transposes  into  Greek  law  Directive  2004/39/EC  of  the  European  Parliament  and  of  the  Council  of  21  April  2004  on 
markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of 
the European Parliament and of the Council and repealing Council Directive 93/22/EEC (OJ L 145, 30.4.2004, p. 1). 

 
 
 
 
                                                 
ECB-PUBLIC 

to be issued in book entry form also in the System as book-entry securities representing the rights 

in  the  underlying  instruments.  In  this  latter  case,  according  to  draft  Article  11(3)(a)  and  (b),  the 

issuer  of  the  financial  instruments  or  interests  therein  in  the  System  may  be  (a)  the  issuer  of  the 

underlying  instruments;  (b)  a  System  participant  or  (c)  any  other  entity  specified  in  draft 

Article 11(3)(a)(ii).  Draft  Article  11(3)  to  (9)  regulates  in  detail  the  claims  deriving  from  such 

securities and the rights and obligations of the parties involved. Draft Article 11(10a) provides to 

the  Bank  of  Greece  the  possibility  to  hold  in  securities  accounts  outside  the  System  financial 

instruments already issued by Greek or foreign issuers outside the System and interests therein, and 

to  issue  book-entry  securities  for  these  instruments  and  interests  in  the  System.  Draft 

Article 11(10b)  provides  the  possibility  for  financial  instruments  already  issued  by  Greek  or 

foreign  issuers  outside  the  System  to  be  held  with  the  System,  by  means  of  the  Bank  of  Greece 

holding  such  securities  through  a  securities  account  with  another,  i.e.  foreign,  central  securities 

registry or depository, hereby acting as a custodian for its System participants. 

2.   General observations 

2.1  The ECB welcomes the general objective of the draft provisions, which the ECB understands is to 

enhance  the  System’s  capabilities  for  the  entry  into  it  of  financial  instruments  issued  in  another 

central securities registry or depository and interests therein, in line with current practice across the 

European  Union.  For  the  sake  of  legal  certainty,  those  capabilities  could  be  set  out  in  a  more 

straightforward  manner  in  the  draft  provisions,  in  order  to  enhance  clarity  as  to  their  scope  and 

purposes. 

2.2 

In  the  same  vein,  the  legitimate  purpose  of  updating  the  legal  framework  governing  the  System 

could be served more efficiently if the sequence under which the various new capabilities feature in 

the  draft  provisions  corresponded  to  the  extent  of  their  use  in  European  securities  markets.  In 

particular,  the  ECB  understands  that  Article  11(10b)  aims  at  reflecting  in  Greek  legislation 

prevailing practice in the Union, i.e. the possibility for instruments already issued in other systems 

to be held with the System through accounts provided by the Bank of Greece as a custodian via a 

link. Despite the frequency of its use, this particular capability only appears at the end of the draft 

provisions, which emphasise other less extensively used capabilities. 

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

Done at Frankfurt am Main, 10 February 2012. 

[signed] 

The President of the ECB 

Mario DRAGHI 

2