Opinion of the European Central Bank of 26 September 2016 on amendments to the Book Entry Securities Act (CON/2016/46)
Date: 2016-09-26
Institutions: European Central Bank
Subjects: Slovenia, intra-EU payment, national law, payment system, securities

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 26 September 2016  

on amendments to the Book Entry Securities Act 

 (CON/2016/46) 

Introduction and legal basis 

On 26 August 2016 the European Central Bank (ECB) received a request from the Slovenian Ministry of 
Finance for an opinion on amendments to the Book Entry Securities Act1 (hereinafter the ‘draft law’). 

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 fifth indent of Article 2(1) of Council Decision 98/415/EC 2, as 

the draft law relates 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 

1.1  The main objective of the draft law is to establish rules facilitating auto-collateralisation  within the 

Target2  Securities  (T2S)  platform  by  transferring  book-entry  securities  to  an  account  pledged  in 

favour  of  Banka  Slovenije.  The  draft  law’s  explanatory  memorandum  indicates  that  under  the 
current Book Entry Securities Act3, a pledge over book-entry securities can only be established on 

the basis of a unilateral order entered in the system by a member of a central securities depository 

(CSD).  For  successful  auto-collateralisation,  the  pledgee  must  also  be  able  to  create  a  pledge. 

The draft law  takes into account the fact that T2S cannot accommodate multiple liens over book-

entry securities. 

1.2  The draft law amends the current Book Entry Securities Act to provide for the creation and deletion 

of  pledges  over  book-entry  securities  with  and  without  the  transfer  of  dematerialised  securities 

between  accounts.  The  creation  and  deletion  of  such  pledges  involving  a  transfer  between  the 

accounts of different holders can only be accomplished by a bilateral order.  

1.3  When entering a transferring part of an order for the transfer of book-entry securities, their holder 

may give prior authorisation to the member of the CSD authorised to enter the receiving part of the 

order on behalf of the acquirer. Such prior authorisation may only be given for book-entry securities 

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3  

Zakon o spremembah in dopolnitvah zakona o nematerializiranih vrednostnih papirjih. 

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). 

Zakon o nematerializiranih vrednostnih papirjih (ZNVP-1) (Ur. l. RS No 75/15). 

 
 
 
 
 
                                                 
ECB-PUBLIC 

on  a  specially  marked  account  of  the  holder  and  is  only  valid  for  book-entry  securities  on  this 

account.  

1.4  The  draft  law  further  provides  that  if,  in  accordance  with  the  holder’s  request  when  entering  their 

pledge  over  the  book-entry  securities,  the  member  of  the  CSD  authorised  by  the  pledgor  is 

replaced  by  a  member  authorised  by  the  pledgee,  the  pledge  is  then  created  on  the  basis  of  a 

bilateral  order.  The  holder  may  give  prior  authorisation  for  a  member  of  the  CSD  to  create  the 

pledge. Such prior authorisation may only be given for book-entry securities on a specially marked 

account  of  the  holder  and  is  only  valid  for  book-entry  securities  on  this  account.  The  draft  law 

provides  that  a  book-entry  security  may  not  be  encumbered  on  multiple  occasions,  nor  may  a 

pledge be established over an already encumbered book-entry security.  

2. 

General observations 

2.1  The  ECB  welcomes  the  amendments  proposed  by  the  draft  law,  which  will  further  align  the 

Slovenian legal framework with T2S requirements for successful auto-collateralisation and facilitate 

the smooth integration of the Slovenian CSD into T2S. 

2.2  The  ECB  understands  that  in  the  context  of  T2S  auto-collateralisation,  Banka  Slovenije  is  in  a 

position  to  be  simultaneously  both  a  member  of  the  CSD,  authorised  in  advance  to  enter  the 

transferring  part  of  the  order,  and  the  acquirer  (i.e.,  the  entity  which  obtains  a  pledge  over  the 

security),  authorised  to  enter  the  receiving  part  of  the  order.  Consequently,  T2S  auto-

collateralisation  transactions  are  executed  in  favour  of  Banka  Slovenije  automatically  in  line  with 

T2S’s functionalities without any additional intervention by Banka Slovenije or other CSD members. 

The  ECB  further  understands  that  by  referring  to  the  specially  marked  account  of  the  holder,  the 

draft law refers to the account pledged in favour of Banka Slovenije. 

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

Done at Frankfurt am Main, 26 September 2016. 

[signed] 

The President of the ECB 

Mario DRAGHI 

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