RegAlert2020-04-20
Added · Updated
Instruction No. 10/2020
The Bank of Portugal amends Instruction No. 3/2015 to implement Eurosystem monetary policy changes, establishing minimum credit rights thresholds of 20,000 EUR for domestic use and 500,000 EUR for cross-border use. It restricts counterparties from using unsecured debt instruments from credit institutions or closely related entities if their cumulative value exceeds 10% of the total collateral mobilized after haircuts. The regulation also updates haircuts for specific asset classes, including a 4% additional haircut for securitized debt and covered bonds, and revises the tables for eligible transactionable assets and credit rights.
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Instruction No. 10/2020
BO No. 4/2020 2nd Supplement • 2020/04/20
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Topics
Markets :: Money Markets
Mod. 99999940/T – 01/14
Index
Text of the Instruction
Text of the Instruction
Subject: Implementation of the Eurosystem monetary policy On April 7, 2020, the Governing Council of the ECB approved Decision (EU) 2020/506 of the European Central Bank, which amends Guideline (EU) 2015/510 of the European Central Bank (ECB/2014/60) on the framework for the implementation of the Eurosystem monetary policy (ECB/2020/20), and Guideline (EU) 2016/65 on the haircuts to be applied in the implementation of the Eurosystem monetary policy (ECB/2015/35). Thus, in exercise of the powers conferred upon it by Articles 12, 15, 16, and 24 of its Organic Law, approved by Law No. 5/98 of January 31, in its current version, the Bp determines:
Instruction No. 3/2015 (BO No. 5, of 15-05-2015) is amended as follows:
- Article 93 is amended, taking the following wording:
Article 93
Minimum size of credit rights
For domestic use, credit rights must, at the time they are submitted to the Bp as collateral assets by a counterparty, have a minimum value of 20,000 EUR. For use on a cross-border basis, the minimum limit is 500,000 EUR. - Article 136, paragraph 1 is amended, taking the following wording:
- Counterparties may not present or use as collateral assets debt instruments without collateral assets issued by a credit institution, or by any other entity with which that credit institution has close relations, to the extent that the value of the said assets issued by the said credit institution or by another entity with which the credit institution has close relations is cumulatively greater than 10% of the total value of the collateral assets mobilized by the counterparty, after the application of haircuts. The said threshold does not apply in the following cases:
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Lineage: In force
Source: Banco de Portugal — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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