Resolution of 7 March 2023 by the Executive Commission of the Bank of Spain modifying the approval of general clauses for the Interbank Deposit Settlement Service

I. GENERAL PROVISIONS BANK OF SPAIN 6455 Resolution of 7 March 2023, by the Executive Commission of the Bank of Spain, modifying the Resolution of 25 January 2008 approving the general clauses applicable to the Interbank Deposit Settlement Service.

As a consequence of the completion of the T2-T2S consolidation project, TARGET-Banco de España –the Spanish payment system that is part of the new generation automated trans-European real-time gross settlement system (TARGET) managed by the Bank of Spain– will enter into operation on 20 March 2023, a date on which it will replace and legally succeed TARGET2-Banco de España.

The functionalities of the Interbank Deposit Settlement Service ("the Service") will remain in effect after the entry into operation of TARGET, without any variations regarding the functionalities offered with TARGET2. However, with the entry into operation of TARGET, changes will occur in the accounts in which the operations registered in the Service are settled: these settlements, which in TARGET2 were carried out in payment module accounts, with the entry into operation of TARGET will be carried out in the new dedicated cash accounts for real-time gross settlement of large payments ("DCA RTGS", by its English acronym).

Likewise, with the entry into operation of TARGET, the figures of "direct participant" and "indirect participant" that existed in TARGET2 disappear.

These changes require updating the general clauses applicable to the Interbank Deposit Settlement Service, approved by Resolution of the Executive Commission of the Bank of Spain of 25 January 2008, taking the opportunity to eliminate some obsolete or unnecessary references in view of the time elapsed since the approval of said general clauses.

Therefore, taking into account what is provided in clause 14 of the general clauses applicable to the Interbank Deposit Settlement Service, approved by Resolution of the Executive Commission of the Bank of Spain of 25 January 2008, the Executive Commission of the Bank of Spain agrees as follows:

First. Modification of the general clauses applicable to the Interbank Deposit Settlement Service. Include the modifications set out below in the general clauses applicable to the Interbank Deposit Settlement Service, approved by Resolution of the Executive Commission of the Bank of Spain of 25 January 2008:

1. The wording of clause 3 (general description) is modified, which will have the following wording: "Clause 3. General Description. The Bank of Spain will maintain an Interbank Deposit Settlement Service (hereinafter, the "Service") which will be responsible for the registration and settlement of interbank deposit operations negotiated between credit institutions that are admitted as members of the Service in accordance with what is established in these Clauses and their technical development applications. The cash positions resulting from the deposit operations registered in said Service will be settled through TARGET. For this reason, the Service will be considered a system linked to TARGET-Banco de España in accordance with the definition established in the uniform conditions for participation in TARGET-Banco de España, approved by the Resolution of 4 July 2022, of the Executive Commission of the Bank of Spain."

2. The wording of clause 4 (Access Criteria) is modified, which will have the following title and wording: "Clause 4. Participation Criteria. Credit institutions that: (a) are participants in TARGET-Banco de España or in another system integrated into TARGET, as well as those that, without being participants in TARGET-Banco de España or in another system integrated into TARGET, have access to a dedicated cash account for real-time gross settlement of large payments (hereinafter, "DCA RTGS", by its English acronym) as holders of accessible BICs or through multiple account access; and (b) have, in the opinion of the Bank of Spain, sufficient solvency and legal and technical capacity. may be admitted as members of the Service."

3. The wording of clause 5 (Responsibilities) is modified, which will have the following wording: "Clause 5. Responsibilities. The admission of an entity as a member of the Service does not in any way imply that the Bank of Spain guarantees the successful outcome of its operations. Member entities will assume on their own and exclusive account the risks of credit, interest rate, settlement, and any other risk they incur in the contracting, clearing, and settlement of deposit operations registered in said Service. Member entities of the Service that are participants in TARGET and have designated their own DCA RTGS to settle the cash positions resulting from their operations registered in the Service are responsible for ensuring that the designated DCA RTGS has sufficient funds at all times to attend to such settlement. Member entities of the Service that have designated a third-party's DCA RTGS to settle the cash positions resulting from their operations registered in the Service are responsible for ensuring that said DCA RTGS has sufficient funds at all times to attend to such settlement."

4. The wording of clause 6 (Application Procedure) is modified, which will have the following wording: "Clause 6. Application Procedure. The application for membership in the Service must be made using the corresponding model available on the Bank of Spain's website, depending on whether: (a) the applicant entities are participants in TARGET-Banco de España or in another system integrated into TARGET that designate their own DCA RTGS to settle the cash positions resulting from their operations registered in the Service; or (b) the applicant entities are participants in TARGET-Banco de España or in another system integrated into TARGET that designate a third-party's DCA RTGS to settle the cash positions resulting from their operations registered in the Service; or applicant entities that, without being participants in TARGET-Banco de España or in another system integrated into TARGET, have access to a third-party's DCA RTGS as holders of accessible BICs or through multiple account access and designate said DCA RTGS to settle the cash positions resulting from their operations registered in the Service. In the application, entities must designate the DCA RTGS in which they request to settle the cash positions resulting from their operations registered in the Service. In the case of the applicant entities mentioned in paragraph (b) above, the applicant entities must also provide authorization from the third-party holder of the DCA RTGS so that the cash positions resulting from the settlement of the applicant entity's operations registered in the Service can be settled in their DCA RTGS. The application will be sent to the Bank of Spain signed by a duly authorized person and accompanied by the documentation and complementary information established by the corresponding technical applications issued by the Bank of Spain at any time. Likewise, the holder of the corresponding DCA RTGS must complete the necessary procedures so that the Bank of Spain or the central bank managing the TARGET integrated system where the DCA RTGS is opened configures the necessary authorization so that the cash positions resulting from the operations registered in the Service can be settled in said DCA RTGS."

5. The wording of paragraph 1 of clause 7 (Communication, Case, and Registration) is modified, which will have the following wording: "1. Once a deposit operation eligible for registration in the Service has been contracted, each of the two contracting entities, the lender and the borrower, will immediately communicate it to the Service specifying the terms and conditions of its contracting according to the format established for these purposes by the Bank of Spain."

6. The wording of clause 9 (Settlement Amounts) is modified, which will have the following wording: "Clause 9. Settlement Amounts. The settlement of cash positions within each cycle will be carried out on a gross basis. However, in the case that there are reciprocal payment orders between two entities, the Service will carry out a prior bilateral clearing process of said payment orders, through which the bilateral net amount of mutual payment obligations will be determined and, with this, the cash position to be settled in the corresponding DCA RTGS. At the end of each cycle, the Service will send to TARGET the debit and credit instructions corresponding to the cash positions resulting in accordance with the previous paragraph, for their settlement in the corresponding DCA RTGS."

7. The wording of clause 10 (Settlement of Positions in TARGET2) is modified, which will have the following title and wording: "Clause 10. Settlement of Positions in TARGET. The settlement of cash positions and, therefore, the corresponding account entry, will in all cases be conditioned by the requirements of fund availability and sufficiency in the corresponding DCA RTGS."

8. In the first paragraph of clause 11, the reference to "TARGET2" is replaced by "TARGET".

9. The following modifications are introduced in paragraph 4 of clause 13 (Duration and Termination of Participation): (a) The wording of paragraph (b) is modified, which will have the following wording: "(b) The entity does not meet the criteria established to be a member of the Service because its participation in TARGET-Banco de España or in another system integrated into TARGET has ended or been suspended; because the DCA RTGS it had designated has been closed; because it lacks the appropriate authorization for the cash positions resulting from the settlement of its operations registered in the Service to be settled in the DCA RTGS it had designated, including, among others, by having lost access to the DCA RTGS it had designated as a holder of accessible BICs or through multiple account access; or because it does not have the level of solvency and technical or legal capacity sufficient in the opinion of the Bank of Spain." (b) The wording of paragraph (c) is modified, which will have the following wording: "(c) Revocation of the authorization granted to the entity or prohibition of initiating new operations in Spanish territory, in accordance with what is provided in Article 8 of Law 10/2014, of 26 June, on the regulation, supervision, and solvency of credit institutions, or, where applicable, in accordance with what is provided in the regulations of the corresponding jurisdiction." (c) The wording of paragraph (f) is modified, which will have the following wording: "(f) Written declaration by the member entity regarding its inability to pay all or part of its debts or to meet its obligations." (d) The wording of paragraph (g) is modified, which will have the following wording: "(g) Celebration by the member entity of a general voluntary agreement or convention with its creditors." (e) The wording of paragraph (h) is modified, which will have the following wording: "(h) That the member entity is insolvent or unable to pay its debts in the opinion of the Bank of Spain." (f) The wording of paragraph (i) is modified, which will have the following wording: "(i) That the credit balance of the DCA RTGS where the cash positions are recorded or all or most of the assets of the member entity are subject to a blocking order, attachment, execution, or any other procedure intended to protect the public interest or the rights of the entity's creditors." (g) The wording of paragraph (l) is modified, which will have the following wording: "(l) If any other circumstance related to the member entity occurs that, in the opinion of the Bank of Spain, puts at risk the overall stability, reliability, and security of the Service, TARGET-Banco de España, or another system integrated into TARGET, or the performance by the Bank of Spain of its functions in accordance with Law 13/1994, of 1 June, on the Autonomy of the Bank of Spain, and the Statutes of the European System of Central Banks and of the European Central Bank."

10. The wording of paragraph 1 of clause 14 (Modification and Development) is modified, which will have the following wording: "1. These general clauses may be modified at any time by the Executive Commission of the Bank of Spain, and the agreed modification will be applicable from the moment indicated in the corresponding resolution, which will be published in the "Official State Bulletin", without prejudice to the fact that, additionally, the Bank of Spain may notify the member entities of said modification. Entities may not claim ignorance of these general clauses, nor of their modifications, once they have been made public by the Bank of Spain."

11. The wording of clause 16 (Collaboration in Information) is modified, which will have the following title and wording: "Clause 16. Confidentiality.

12. The Bank of Spain will maintain the confidentiality of all sensitive or secret information registered by the Service, unless the member entity consents in writing to provide or disclose the information or it is permitted or required by Spanish Law.

13. Without prejudice to what is provided in paragraph 1, the member entity expressly accepts that the Bank of Spain provides information regarding the Service's operation data to other central banks, supervisory, resolution, and surveillance authorities of Member States and the European Union, to the extent that they perform their public functions, provided that this is not contrary to applicable regulations.

14. Likewise, member entities expressly authorize the Bank of Spain to obtain from any financial or supervisory authorities or commercial bodies, national or foreign, any information referred to them that is necessary in relation to their participation in the Service.

15. The Bank of Spain may use, disclose, or publish Service information for statistical, historical, scientific, or other purposes, in the performance of its public functions or the functions of other public entities to which the information is provided, and provided that this does not allow, directly or indirectly, the identification of the member entity. 4 bis. The Bank of Spain will not be liable for the financial and commercial consequences of the disclosure made in accordance with what is provided in paragraphs 2, 3, and 4 above.

16. Member entities may only use the information they have access to regarding the functioning of the Service for the purposes established in the general clauses and will maintain the confidentiality of that information, unless the Bank of Spain has expressly consented in writing to its disclosure. Participants will ensure that third parties to whom they outsource, delegate, or subcontract tasks that affect or may affect compliance with their obligations under the general clauses are obliged to comply with the confidentiality requirements of this clause."

17. Clause 17 (Statistics) is eliminated, and clauses 18 (Force Majeure), 19 (Applicable Law and Jurisdiction), 20 (Domicile), and 21 (Entry into Force) are renumbered as clauses 17, 18, 19, and 20, respectively.

18. The second and third paragraphs of clause 20 (Entry into Force) with the new numbering are eliminated.

19. Annex 1 is eliminated.

Second. Entry into Force. The modifications contained in the previous first point will apply from 20 March 2023, inclusive. Operations registered in the Service before 20 March 2023 but which are pending settlement on that date will be settled in accordance with the general clauses applicable to the Interbank Deposit Settlement Service as modified in accordance with the previous first point.

Third. Approval of the consolidated text of the general clauses applicable to the Interbank Deposit Settlement Service. Approve as an annex to this resolution a consolidated text of the general clauses applicable to the Interbank Deposit Settlement Service, approved by Resolution of the Executive Commission of the Bank of Spain of 25 January 2008 and with the modifications included by this resolution, as they will apply from 20 March 2023, inclusive.

Madrid, 7 March 2023.–The General Secretary of the Bank of Spain, Francisco-Javier Priego Pérez.

ANNEX General Clauses Applicable to the Interbank Deposit Settlement Service (Consolidated Version)

TITLE I General Provisions

Clause 1. General Legal Regime. The provision of the interbank deposit settlement service will be governed by what is provided in these General Clauses and by the technical applications issued by the Bank of Spain in their development.

Clause 2. Scope of Application. The Bank of Spain will provide the interbank deposit settlement service described in these General Clauses to entities that are admitted as members of said service.

TITLE II Interbank Deposit Settlement Service

Clause 3. General Description. The Bank of Spain will maintain an Interbank Deposit Settlement Service (hereinafter, the "Service") which will be responsible for the registration and settlement of interbank deposit operations negotiated between credit institutions that are admitted as members of the Service in accordance with what is established in these Clauses and their technical development applications. The cash positions resulting from the deposit operations registered in said Service will be settled through TARGET. For this reason, the Service will be considered a system linked to TARGET-Banco de España in accordance with the definition established in the uniform conditions for participation in TARGET-Banco de España, approved by the Resolution of 4 July 2022, of the Executive Commission of the Bank of Spain.

TITLE III Participation

Clause 4. Participation Criteria. Credit institutions that: (a) Are participants in TARGET-Banco de España or in another system integrated into TARGET, as well as those that, without being participants in TARGET-Banco de España or in another system integrated into TARGET, have access to a dedicated cash account for real-time gross settlement of large payments (hereinafter, "DCA RTGS", by its English acronym) as holders of accessible BICs or through multiple account access; and (b) Have, in the opinion of the Bank of Spain, sufficient solvency and legal and technical capacity. may be admitted as members of the Service.

Clause 5. Responsibilities. The admission of an entity as a member of the Service does not in any way imply that the Bank of Spain guarantees the successful outcome of its operations. Member entities will assume on their own and exclusive account the risks of credit, interest rate, settlement, and any other risk they incur in the contracting, clearing, and settlement of deposit operations registered in said Service. Member entities of the Service that are participants in TARGET and have designated their own DCA RTGS to settle the cash positions resulting from their operations registered in the Service are responsible for ensuring that the designated DCA RTGS has sufficient funds at all times to attend to such settlement. Member entities of the Service that have designated a third-party's DCA RTGS to settle the cash positions resulting from their operations registered in the Service are responsible for ensuring that said DCA RTGS has sufficient funds at all times to attend to such settlement.

Clause 6. Application Procedure. The application for membership in the Service must be made using the corresponding model available on the Bank of Spain's website, depending on whether: (a) The applicant entities are participants in TARGET-Banco de España or in another system integrated into TARGET that designate their own DCA RTGS to settle the cash positions resulting from their operations registered in the Service; or (b) The applicant entities are participants in TARGET-Banco de España or in another system integrated into TARGET that designate a third-party's DCA RTGS to settle the cash positions resulting from their operations registered in the Service; or applicant entities that, without being participants in TARGET-Banco de España or in another system integrated into TARGET, have access to a third-party's DCA RTGS as holders of accessible BICs or through multiple account access and designate said DCA RTGS to settle the cash positions resulting from their operations registered in the Service. In the application, entities must designate the DCA RTGS in which they request to settle the cash positions resulting from their operations registered in the Service. In the case of the applicant entities mentioned in paragraph (b) above, the applicant entities must also provide authorization from the third-party holder of the DCA RTGS so that the cash positions resulting from the settlement of the applicant entity's operations registered in the Service can be settled in their DCA RTGS. The application will be sent to the Bank of Spain signed by a duly authorized person and accompanied by the documentation and complementary information established by the corresponding technical applications issued by the Bank of Spain at any time. Likewise, the holder of the corresponding DCA RTGS must complete the necessary procedures so that the Bank of Spain or the central bank managing the TARGET integrated system where the DCA RTGS is opened configures the necessary authorization so that the cash positions resulting from the operations registered in the Service can be settled in said DCA RTGS.