Decision No. 2025-02 of 16 April 2025 on the management of collateral in Eurosystem credit operations

Decision No. 2025-02 of 16 April 2025 on the management of collateral in Eurosystem credit operations

THE GOVERNOR OF THE BANK OF FRANCE

Having regard to:

• the Treaty on the Functioning of the European Union, and in particular Article 127(2),
• the Statute of the European System of Central Banks and of the European Central Bank, and in particular Articles 3.1, 9.2, 12.1, 14.3, 17, 18.2, the first subparagraph of Article 20, and Article 22,
• ECB Guideline (EU) 2024/3129 of 13 August 2024 on the management of collateral in Eurosystem credit operations (ECB/2024/22), as amended,
• ECB Guideline (EU) 2015/510 of 19 December 2014 on the implementation of the Eurosystem monetary policy framework (ECB/2014/60), as amended,
• ECB Guideline (EU) 2014/528 of 9 July 2014 on additional temporary measures concerning Eurosystem refinancing operations and the eligibility of collateral and amending ECB Guideline 2007/9 (ECB/2014/31), as amended,
• the Monetary Agreement between the European Union and the Principality of Monaco of 29 November 2011,
• the Monetary and Financial Code, and in particular Article L. 142-8,
• the Governor’s Decision No. 2015-01 of 22 April 2015 on the implementation of the Bank of France’s monetary policy and intraday credit, as amended,
• the Governor’s Decision No. 2020-02 of 20 April 2020 on additional temporary measures concerning the Bank of France’s refinancing operations and the eligibility of collateral, as amended.

HEREBY DECIDES:

Article 1
Object and scope

1. This Decision establishes harmonized rules and arrangements for the mobilization and management of eligible collateral under the Governor’s Decision No. 2015-01 of 22 April 2015 on the implementation of the Bank of France’s monetary policy and intraday credit (hereinafter the “Governor’s Decision No. 2015-01”) and/or the Governor’s Decision No. 2020-02 of 20 April 2020 on additional temporary measures concerning the Bank of France’s refinancing operations and the eligibility of collateral (hereinafter the “Governor’s Decision No. 2020-02”), at the national or cross-border level, for the purpose of securing Eurosystem credit operations. In the event of a conflict between this Decision and the Governor’s Decision No. 2015-01, this Decision shall prevail for matters within its scope.

2. The Bank of France uses the Eurosystem Collateral Management System (ECMS) as the single Eurosystem platform for the mobilization and management of collateral referred to in paragraph 1.

3. Notwithstanding paragraphs 1 and 2:
   a) the Bank of France may manage the national mobilization of other private credit claims (additional credit claims – ACC), in particular the claims referred to in Article 4, paragraph 1(a)(iii) of the Governor’s Decision of the Bank of France No. 2020-02, outside the ECMS, in which case Article 6, paragraphs 1, 2, and 3, shall not apply; b) the Bank of France manages the mobilization of retail mortgage-backed debt instruments (RMBD) outside the ECMS.

4. In all cases where assets are mobilized outside the ECMS, the Bank of France records information on the collateral value of these assets in that system.

5. The Bank of France may also authorize the use of the ECMS for mobilizing collateral for any other purpose listed in Annex III.

Article 2
Definitions

For the purposes of this Decision, the following definitions apply:

1. “other private credit claim” or “ACC” (additional credit claim), an other private credit claim eligible under Article 4 of the Governor’s Decision No. 2020-02, excluding an RMBD;

2. “asset account”, a) with regard to the mobilization of marketable assets and non-marketable debt instruments backed by eligible credit claims (DECC): i) an account opened by a national central bank (NCB) in its own books; ii) an account opened in the books of a securities settlement system or another NCB acting as a correspondent central bank; b) with regard to the mobilization of non-marketable assets (other than DECC): i) an account opened by an NCB in its own books; ii) an account opened in the books of another NCB acting as a correspondent central bank. Accounts opened with an entity other than the central bank of the home country are referred to as “external asset accounts”, those opened in the books of the central bank of the home country are referred to as “internal asset accounts”;

3. “assisting central bank” or “ACB” (assisting central bank), an NCB that provides assistance and advice to a home central bank with regard to the cross-border mobilization of private credit claims;

4. “auto-collateralization”, an auto-collateralization as defined in point 7) of Annex VIII to the Governor’s Decision No. 2022-05 of 6 July 2022 on harmonized conditions for participation in the new generation trans-European automated real-time gross settlement express transfer system (TARGET) (hereinafter the “TARGET Decision”);

5. “business day”, a business day as defined in point 13) of Annex VIII to the TARGET Decision;

6. “cash account”, a) a main cash account; b) a non-euro cash account;

7. “central securities depository” or “CSD”, a central securities depository as defined in Article 2(1)(1) of Regulation (EU) No 909/2014 of the European Parliament and of the Council1;

8. “collateral”, all eligible marketable and non-marketable assets and cash under the Governor’s Decision No. 2015-01 of 22 April 2015 and/or the Governor’s Decision No. 2020-02 to secure Eurosystem credit operations or mobilized for any other purpose listed in Annex III of this Decision;

9. “collateral management data”, data on eligible assets, price formation information, and data on tight links;

10. “collateral enforcement”, the process by which an NCB exercises its rights on assets mobilized as collateral to obtain settlement of a due credit exposure;

11. “collateral reassignment”, the process by which assets are moved from the account designated at the time of mobilization to another account;

12. “collateral value”, the amount of credit that may be granted in exchange for the collateral provided by a counterparty, after deduction of haircuts and other factors, such as periodically determined by the Eurosystem, whether related to the asset or the counterparty;

13. “common pool”, the sum of collateral values arising from assets and cash mobilized by a counterparty and held in that common pool;

14. “collateral position”, a register of the collateral value of assets and cash mobilized as collateral;

15. “counterparty”, a) an institution meeting the eligibility criteria set out in Part Three of the Governor’s Decision No. 2015-01, which gives it the right to access Eurosystem monetary policy operations and, with regard to access to intraday credit, a participant meeting the eligibility criteria set out in Article 10 of Part Two of the TARGET Decision; or b) an entity that provides collateral managed by NCBs for any other purpose listed in Annex III of this Decision;

16. “correspondent central bank” or “CCB” (correspondent central bank), an NCB acting on behalf of the home central bank under a CCBM arrangement;

17. “correspondent central bank model” or “CCBM” (correspondent central bank model), an arrangement put in place by the Eurosystem to enable counterparties to mobilize eligible assets at the cross-border level, under which NCBs act as custodians and agents for each other and under which: a) the home central bank provides credit or liquidity to the counterparty based on eligible assets held by the counterparty, or on its behalf, in an account designated by the CCB; b) the CCB acts on behalf of the home central bank with regard to these eligible assets and provides assistance and advice; and c) in specific cases concerning private credit claims, the ACB provides assistance and advice;

18. “private credit claim”, a private credit claim eligible under Article 2(30) of the Governor’s Decision No. 2015-01;

19. “credit line”, the collateral value available to secure intraday credit in TARGET;

20. “credit position”, the amount of credit provided to a counterparty by the home central bank, including any collateral value in the common pool that is earmarked for a specific use;

21. “cross-border mobilization”, the mobilization: a) of marketable assets: i) held in a Member State other than that of the home central bank; ii) issued in a Member State other than that of the home central bank and held in the Member State of the home central bank; b) of DECC issued and held in a Member State other than that of the home central bank; c) of private credit claims governed by a law other than that of the country in which the home central bank is established; d) of ACC governed by a law other than that of the country in which the NCB receiving the collateral is established;

22. “direct access mobilization”, the mobilization of marketable assets and DECC when the Bank of France receives these assets in a securities account it holds with a CSD located in another country;

23. “direct link”, an agreement between two securities settlement systems operated by CSDs, under which a CSD becomes, by opening a securities account, a direct participant in the securities settlement system operated by the other CSD, to enable the transfer of securities by book entry;

24. “national mobilization”, a) with regard to marketable assets and DECC, the mobilization of an asset issued and held with a CSD located in France; b) with regard to private credit claims and ACC, the mobilization of private credit claims and ACC governed by French law; and c) with regard to RMBD, RMBD issued by a counterparty established in France;

25. “eligible assets”, marketable and non-marketable assets eligible under the Governor’s Decision No. 2015-01 and the Governor’s Decision No. 2020-02;

26. “eligible link”, a direct or relayed link that the Eurosystem has deemed to meet the eligibility criteria set out in Annex I and which is listed on the Eurosystem’s list of eligible links published on the ECB website. An eligible relayed link consists of underlying eligible direct links;

27. “eligible securities settlement system”, a securities settlement system operated by a CSD that the Eurosystem has deemed to meet the eligibility criteria set out in Annex I and which is listed on the Eurosystem’s list of eligible securities settlement systems published on the ECB website;

28. “eligible tripartite agent”, a tripartite agent that is operated by a CSD that the Eurosystem has deemed to meet the eligibility criteria set out in Annex II and which is listed on the Eurosystem’s list of eligible tripartite agents published on the ECB website;

29. “euro area”, belonging to or established in a Member State whose currency is the euro;

30. “Eurosystem”, the ECB and the NCBs;

31. “Eurosystem credit operations”, Eurosystem credit operations as defined in Article 2(65) of the Governor’s Decision No. 2015-01;

32. “home central bank” or “HCB” (home central bank), the NCB of the Member State in which a counterparty is established and which grants credit to that counterparty under Eurosystem credit operations;

33. “intermediary securities settlement system”, a securities settlement system acting as an intermediary between an issuer’s securities settlement system and an investor’s securities settlement system;

34. “intraday credit”, intraday credit as defined in point 35) of Annex VIII to the TARGET Decision;

35. “investor’s securities settlement system”, a securities settlement system having an eligible link with an issuer’s securities settlement system to facilitate the transfer of securities from participants in the issuer’s system to participants in the investor’s securities settlement system;

36. “issuer’s securities settlement system”, a securities settlement system operated by the CSD in which the securities were issued;

37. “link-based mobilization circuit”, the mobilization of marketable assets using an eligible link;

38. “main cash account” or “MCA” (main cash account), a main cash account held for the purposes of and in accordance with the TARGET Decision;

39. “marketable assets”, the following: a) marketable assets as defined in Article 2(3) of the Governor’s Decision No. 2015-01; b) marketable assets eligible as collateral under Articles 3 or 7 of the Governor’s Decision No. 2020-02 of 20 April 2020;

40. “mobilization circuits”, the series of procedures and arrangements put in place to enable the mobilization of eligible assets by counterparties, which includes the national mobilization circuit, the link-based mobilization circuit, the CCBM circuit, and the direct access mobilization circuit;

41. “national central bank” or “NCB”, a national central bank of a Member State whose currency is the euro;

42. “non-marketable asset”, a) a non-marketable asset as defined in Article 2(4) of the Governor’s Decision No. 2015-01; b) an ACC eligible under Article 4 of the Governor’s Decision No. 2020-02;

43. “non-marketable debt instrument backed by eligible credit claims” or “DECC” (non-marketable debt instrument backed by eligible credit claims), a non-marketable debt instrument backed by eligible credit claims as defined in Article 2(4 bis) of the Governor’s Decision No. 2015-01;

44. “pooling”, the operational method used by the Bank of France to hold collateral mobilized by counterparties, whereby the counterparty makes collateral available to the Bank of France to secure the Bank of France’s credit and in which individual eligible assets are not linked to any specific Eurosystem credit operation, except for RMBD which are linked to a specific credit operation;

45. “primary MCA”, the MCA held by the counterparty or a third party and designated by the counterparty for the settlement of payments related to collateral management;

46. “relayed link”, a link established between securities settlement systems operated by two different CSDs that perform securities operations or transfers of securities through a third securities settlement system operated by a CSD acting as an intermediary or, for securities settlement systems operated by CSDs participating in TARGET2-Securities, through several securities settlement systems operated by CSDs acting as intermediaries;

47. “retail mortgage-backed debt instrument” or “RMBD” (retail mortgage-backed debt instruments), an asset eligible for use as collateral in accordance with Article 107 of the Governor’s Decision No. 2015-01 of 22 April 2015 and Article 4 of the Governor’s Decision No. 2020-02;

48. “retention accounting mode”, the retention of marketable assets and/or DECC that are mobilized as collateral in a securities account of the counterparty;

49. “securities settlement system”, a securities settlement system as defined in Article 2(1)(10) of Regulation (EU) No 909/2014;

50. “TARGET”, the trans-European automated real-time gross settlement express transfer system of new generation, governed by ECB Guideline (EU) 2022/912 (ECB/2022/8);

50 bis) “TARGET-BANK OF FRANCE”, the real-time gross settlement system, the French component of TARGET;

51. “transfer accounting mode”, the delivery of marketable assets or DECC that are mobilized as collateral from a securities account of the counterparty to a securities account of the NCB;

52. “T2S services”, T2S services as defined in Article 2(20) of ECB Guideline 2012/132.

Article 3
Structure of accounts and common pools

1. To facilitate the mobilization and management of collateral, the Bank of France:
   a) maintains asset accounts and cash accounts; b) requires counterparties to maintain corresponding asset accounts and cash accounts.

2. The Bank of France allows its counterparties to authorize a third party to manage the counterparty’s designated asset accounts and/or cash accounts, in which case the following provisions apply:
   a) when a counterparty authorizes a third party to manage its designated asset account, this account is managed by a third party that sends instructions to and receives notifications from the Bank of France on behalf of the counterparty; b) when a counterparty authorizes a third party to manage its designated cash account, the primary MCA designated by the counterparty is co-managed (in accordance with Article 2(1)(a) and (b) of Part Two of the TARGET Decision) by another TARGET participant or belongs to another TARGET participant.

3. To receive marketable assets and DECC as collateral from counterparties, the Bank of France opens external asset accounts in the following eligible securities settlement system: Euroclear France.

4. The Bank of France opens internal asset accounts for each counterparty to receive collateral from counterparties and/or to record information on collateral mobilized by the counterparty. Separate internal asset accounts are opened for:
   a) marketable assets and DECC; b) non-marketable assets other than DECC.

5. The Bank of France uses pooling to hold collateral mobilized by its counterparties.

6. Each internal asset account and each common pool of collateral is identified by a unique and harmonized naming convention, defined by the Eurosystem and set out in the document entitled “Collateral management in Eurosystem credit operations - information for Eurosystem counterparties” which is published on the ECB website.

7. Subject to the obligation to segregate common pools (pools) provided for in paragraph 8, a portion of the collateral value of collateral mobilized in the common pool (collateral pool) of a counterparty may be pooled for purposes related to auto-collateralization under Eurosystem credit operations or for other purposes listed in Annex III of this Decision.

8. Collateral mobilized for the purpose of auto-collateralization under Eurosystem credit operations is held in a common pool separate from those used for the management of collateral for other purposes referred to in paragraph 7. The Bank of France may maintain as many common pools of collateral per counterparty as necessary for these purposes.

9. The Bank of France may open multiple internal asset accounts per counterparty. An internal asset account is linked to only one common pool of collateral. A common pool of collateral may be linked to multiple internal asset accounts.

10. For the purpose of granting intraday credit to a counterparty, only the common pool of collateral maintained to secure Eurosystem credit operations is linked to the primary MCA in TARGET designated by the counterparty.

11. To facilitate the execution of collateral management operations, the Bank of France debits the counterparty’s primary MCA in TARGET to facilitate the payment of ongoing obligations to the Eurosystem with regard to, inter alia, the following activities:
    a) the repayment of maturing credit operations; b) the processing of corporate events; c) the mobilization of cash as collateral; d) the collection of fees.

Article 4
Mobilization of collateral

1. Marketable assets and DECC mobilized as collateral by a counterparty are delivered to an account held with an eligible securities settlement system.

2. If the CSD in which the asset is issued and the CSD in which the asset is held are not identical, the collateral is mobilized only if the securities settlement systems operated by these two CSDs are connected by an eligible link.

3. At the request of another NCB (as HCB), the Bank of France (as CCB) holds a segregated or omnibus securities account in an eligible securities settlement system established in France and holds the collateral on behalf of the HCB.

4. (not applicable)

5. For the purpose of mobilizing private credit claims and ACC as collateral, the Bank of France requires counterparties to mobilize these assets in an asset account designated by the Bank of France. The Bank of France manages the national declaration of ACC outside the ECMS and ensures the updating of the corresponding asset account.

6. When cash is mobilized as collateral, the Bank of France requires counterparties to mobilize this cash in a cash account designated by the Bank of France. The Bank of France manages the national declaration of cash outside the ECMS and ensures the updating of the corresponding cash account.

1 Règlement (UE) nº 909/2014 du Parlement européen et du Conseil du 23 juillet 2014 concernant l’amélioration du règlement de titres dans l’Union européenne et les dépositaires centraux de titres, et modifiant les directives 98/26/CE et 2014/65/UE ainsi que le règlement (UE) nº 236/2012 (JO L 257 du 28.8.2014, p. 1).

2 Orientation BCE/2012/13 de la Banque centrale européenne du 18 juillet 2012 relative à TARGET2-Titres (JO L 215 du 11.8.2012, p. 19).