Opinion of the European Central Bank of 30 March 2016 on the regime applicable to negotiable debt securities (CON/2016/20)
Date: 2016-03-30
Institutions: European Central Bank
Subjects: France, financial stability, issue of securities, securities, statistics

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 30 March 2016  

on the regime applicable to negotiable debt securities 

(CON/2016/20) 

Introduction and legal basis 

On  1  March  2016  the  European  Central  Bank  (ECB)  received  a  request  from  the  French  Ministry  of 

Finance and Public Accounts for an opinion on a draft decree and a draft ministerial order amending the 

regime applicable to negotiable debt securities (hereinafter the ‘draft regulatory acts’). 

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

Functioning  of  the  European  Union  and  the  third,  fourth  and  sixth  indents  of  Article 2(1)  of  Council 
Decision  98/415/EC1,  as  the  draft  regulatory  acts  relate  to  the  Banque  de  France,  the  collection, 

compilation and distribution of monetary, financial, banking, payment systems and balance of payments 

statistics and rules applicable to financial institutions insofar as they materially influence the stability of the 

financial  institutions  and  markets.  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 regulatory acts 

1.1  The purpose of the draft regulatory acts is to simplify further the regulatory framework applicable to 

the  issue  of  negotiable  debt  securities  (titres  de  créances  négociables,  TCNs)  with  the  aim  of 

enlarging the investor and issuer base and increasing the transparency of the TCN market.   

1.2  To  that  effect,  the  draft  regulatory  acts  provide  for  (a)  a  simplified  regime  of TCNs  based  on  two 

different categories, ‘short term TCNs (titres négociables à court terme)’ and ‘medium term TCNs 

(titres négociables à moyen terme)’; (b) a further standardisation of the issuance documentation for 

TCNs;  (c)  a  clearer  and  more  accessible  framework  for  non-domestic  TCN  issuers;  (d)  an 

extension to the list of eligible rating agencies (under specific conditions) whose rating is required 

for certain issuers to access the TCN market; and (e) an extension to the type of guarantors eligible 

to guarantee TCNs. 

1.3  Aside from these simplification measures the issuance regime for TCNs is not materially changed. 

The  Banque  de  France  remains  the  competent  authority  required  to  ensure  that  issuers  of TCNs 

comply with the relevant provisions of the French Monetary and Financial Code (Code monétaire et 

financier,  CMF)  and  is  therefore  the  addressee  of  the  issuance  documentation  established  by 

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Council  Decision  98/415/EC  of  29 June  1998  on  the  consultation  of  the  European  Central  Bank  by  national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 

 
 
 
 
                                                 
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issuers  of  TCNs.  The  Banque  de  France  also  performs  other  tasks  in  relation  to  the  issuance  of 
TCNs (including the suspension of issuances) and receives certain statistics from TCN issuers2. 

2. 

Observations of the ECB  

2.1  The  ECB  generally  welcomes  the  initiative  of  the  French  authorities  to  simplify  the  regulatory 

framework applicable to the issuance of TCNs, in particular, the fact that the relevant provisions are 

now  grouped  together  in  the  CMF  and  one  ministerial  order,  thereby  increasing  the  overall 

readability of the framework. 

2.2  The  draft  regulatory  acts  are  intended  to  simplify  further  the  regime  applicable  to  the  issue  of 

TCNs.  The  former  categories  of  certificates  of  deposit  (certificats  de  dépôts)  and  treasury  bills 

(billets  de  trésorerie),  with  different  issuers  but  identical  maturities  (of  one  year  or  less),  are 

replaced by a single category for all issuers known as ‘short term TCNs (titres négociables à court 

terme)’. The former medium term negotiable notes (bons à moyen terme négociables) become the 

second category and are now known as ‘medium term TCNs (titres négociables à moyen terme)’. 

The  ECB  welcomes  the  simplification  of  the  categorisation  of  TCNs  through  the  creation  of  two 
clear categories of TCN distinguished by their maturities and issuers 3. 

2.3  The  ECB  notes,  as  regards  the  standardisation  of  the  issuance  documentation,  that  the  draft 

regulatory  acts  simplify  further  the  language  regime  applicable  to  the  issuance  documentation 

published in respect of TCNs issued for an amount of at least EUR 200 000 by allowing the issuer 

to  publish  the  documentation  in  a  language  other  than  French  provided  such  language  is 

customarily used in the financial sphere. This is intended to facilitate the issue of TCNs as issuers 

will  no  longer  have  to  produce  a  summary  of  the  full  issuance  documentation  in  French.  A  short 

disclaimer  in  the  issuance  documentation  will  nevertheless  be  required,  inviting  investors,  if 

necessary, to have recourse to a French translation. Second, the description of the activities of the 

issuers of TCNs will be standardised, putting an end to the former specific description of activities 

based on the issuer’s status as either an industrial and commercial entity or a credit institution or 

investment firm. These arrangements do not give rise to any specific remarks from the ECB. 

2.4  The  amendment  of  Article  D.  213-9  of  the  CMF  will  allow  the  inclusion,  in  the  TCN  issuance 

documentation,  of  financial  statements  established  pursuant  to  a  standard  considered  by  the 

European Commission as equivalent to international financial reporting standards. This clarifies the 

former  requirement  for  non-domestic  issuers  to  provide  financial  information  of  an  ‘equivalent 

nature’  to  international  financial  reporting  standards,  thereby  increasing  legal  certainty  for  non-

domestic  issuers.  Where  the  registered  office  of  the  issuer  is  located  outside  the  European 

Economic Area (EEA), the issuer will have to provide accounting data subject to a statutory audit 

under  an  equivalent  public  oversight  system  recognised  as  such  by  the  European  Commission. 

These measures aim to facilitate the issue of TCNs by non-domestic issuers and, at the same time, 

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3  

See Articles D.213-2, D.213-6, D. 213-9, D. 213-11, D.213-12, D. 213-13 and D.213-14 of the CMF. 
Under the simplified regime all issuers mentioned in Article L. 213-3 of the CMF will be entitled to issue short term 
TCNs (titres négociables à court terme). The same issuers with the exception of those mentioned in Article L. 213-3 
paragraph 12 will be entitled to issue medium term TCNs (titres négociables à moyen terme). 

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ensure  the  reliability  of  the  accounting  data  provided  by  non-EEA  issuers.  The  ECB  has  no 

particular observations on these measures. 

2.5  The draft regulatory acts also extend the list of eligible rating agencies whose rating is required for 

certain issuers to access the TCN market. Under the current regime, non-supervised entities (i.e. 

entities which are not credit institutions, investment firms or insurance companies), the securities of 

which  are  not  admitted  to  trading  on  a  regulated  market,  must  provide  a  rating  of  their  issue 

programme  or  be  guaranteed  by  a  guarantor  benefitting  from  such  a  rating.  At  present  only  four 

rating  agencies  are  specified  as  eligible.  The  draft  regulatory  acts  extend  this  list  to  all  agencies 

authorised to operate by the European Securities Markets Authority (ESMA) and which fulfil certain 

specific  coverage  requirements  over  a  historic  period  of  three  years.  Moreover,  issuers  whose 

securities  are  admitted  to  trading  on  a  regulated  market  outside  the  EEA  assessed  by  the 

European Commission as equivalent to EEA regulated markets are now exempted from having to 

provide a rating for their issue programme. The ECB welcomes these amendments. 

2.6  The  envisaged  extension  to  the  type  of  entities  entitled  to  guarantee  TCN  issuance  programmes 

does not give rise to any specific remarks from the ECB.  

2.7  Finally,  the  ECB  observes  that,  in  accordance  with  Article  68  of  Guideline  (EU)  2015/510  of  the 
European Central Bank (ECB/2014/60) 4, in order to be eligible as collateral for Eurosystem credit 

operations, debt instruments must be admitted to trading either on a regulated market or on certain 

acceptable non-regulated markets. The current list of acceptable non-regulated markets, published 

by the ECB on its website, includes the French treasury bills market and medium term negotiable 

notes market. In this regard, the selection process for non-regulated markets is defined exclusively 

in terms of the performance of the Eurosystem collateral management function and should not be 

regarded  as  an  assessment  by  the  Eurosystem  of  the  intrinsic  quality  of  any  market.  The  ECB 

considers  the  changes  envisaged  in  the  draft  regulatory  acts  unlikely  to  alter  the  Eurosystem’s 

assessment of the treasury bills market and medium term negotiable notes market as acceptable 

non-regulated markets in the context of the Eurosystem collateral framework. 

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

Done at Frankfurt am Main, 30 March 2016. 

[signed] 

The President of the ECB 

Mario DRAGHI 

4  

Guideline  (EU)  2015/510  of  the  European  Central  Bank  of  19  December  2014  on  the  implementation  of  the 
Eurosystem monetary policy framework (ECB/2014/60) (OJ L 91, 2.4.2015, p. 3). 

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