Regulation of the Banque centrale du Luxembourg 2025/ No. 35 of 13 June 2025 implementing certain provisions of ECB Guideline 2024/3129 of 13 August 2024 on collateral management in Eurosystem credit operations

BANQUE CENTRALE DU LUXEMBOURG
Regulation of the Banque centrale du Luxembourg 2025/ No. 35 of 13 June 2025 implementing certain provisions of ECB Guideline 2024/3129 of 13 August 2024 on collateral management in Eurosystem credit operations (ECB/2024/22)

The Directorate of the Banque centrale du Luxembourg,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 127(2), first indent;

Having regard to the Statute of the European System of Central Banks and of the European Central Bank, and in particular Article 3.1, first indent, and Articles 9.2, 12.1, 14.3, 18.2 and 20, first paragraph;

Having regard to the Law of 23 December 1998 on the monetary status and the Banque centrale du Luxembourg (hereinafter the 'Central Bank'), as amended, in particular Articles 2(1), 2(2) and 34(1);

Whereas:

(1) Eurosystem counterparties use securities settlement systems and links between securities settlement systems operated by central securities depositories to mobilise collateral eligible for Eurosystem credit operations.

(2) Under Article 18.2 of the Statute of the European System of Central Banks and of the European Central Bank, the European Central Bank (ECB) must lay down the general principles governing open market and credit operations carried out by itself or by the national central banks, including the announcement of the conditions under which it is willing to conduct such operations.

(3) The Eurosystem has designed a single framework for negotiable and non-negotiable assets eligible as collateral, mobilisable within or across national borders. For the mobilisation of negotiable assets within the Eurosystem, securities settlement systems and links between such systems may only be used if the Eurosystem considers that they meet the required conditions.

(4) Since 1998, the Eurosystem has applied usage standards to assess securities settlement systems and links between such systems, in order to determine whether they are usable in Eurosystem credit operations.

(5) Given the adoption of Regulation (EU) No 909/2014 of the European Parliament and of the Council1 and the related technical standards, including regulatory technical standards and implementing technical standards, and in view of the significant overlaps between the requirements of that Regulation and the Eurosystem's usage standards, the Eurosystem decided to streamline the assessment procedure for securities settlement systems and links between such systems.

(6) Guideline ECB/2015/510, as amended by Guideline ECB/2018/3, defined Eurosystem-specific requirements not covered by the requirements of Regulation (EU) No 909/2014 concerning central securities depositories (CSD).

(7) Under Section II(1) of Annex VIa to Guideline ECB/2015/510, as amended, the operator of a securities settlement system must, for the sake of legal certainty, demonstrate to the national central bank of the Member State in which the system in question operates, by reference to a binding legal document consisting of a duly executed contract or a reference to the mandatory general conditions of that operator, or in another way, that the requirements defined in Section II of Annex VIa to Guideline ECB/2015/510, as amended, are met.

(8) In order to strengthen the efficiency and safety of collateral management operations in the Eurosystem, the European Central Bank adopted Guideline ECB/2024/222, which establishes a new collateral management framework, notably in the context of the development of the Eurosystem Collateral Management System (ECMS) as the Eurosystem's single platform enabling national central banks to manage eligible assets and cash mobilised as collateral by their counterparties.

(9) With the adoption of Guideline ECB/2024/22, the initial requirements defined in Annex VIa to Guideline ECB/2015/510, as amended, are now revised and integrated into Annex I of that new Guideline. The eligibility criteria for the use of securities settlement and delivery systems and links between such systems in Eurosystem credit operations have been updated to take into account integration with TARGET2-Securities (T2S) services, further harmonising securities settlement and delivery infrastructures within the euro area.

1 Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No 236/2012 (OJ L 257, 28.8.2014, p. 1).
2 Guideline (EU) 2024/3129 of the European Central Bank of 13 August 2024 on collateral management in Eurosystem credit operations (ECB/2024/22).

Consequently, references to Annex VIa to Guideline ECB/2015/510, as amended, must be repealed and replaced by references to Annex I to Guideline ECB/2024/22.

(10) The implementation of Guideline ECB/2024/22 by the Central Bank implies that Regulation BCL/2018/24 of 16 April 2018 implementing certain provisions of Guideline ECB/2018/3 of 7 February 2018 amending Guideline (EU) 2015/510 is repealed and replaced by the following Regulation:

HAS ADOPTED THIS REGULATION:

Article 1. Eligibility criteria for the use of securities settlement and delivery systems and links between securities settlement and delivery systems in Eurosystem credit operations

1. Securities settlement systems are considered eligible for use in the context of Eurosystem credit operations if they meet the criteria (Section I), requirements (Section II) and procedures (Section III) of the Eurosystem set out in Annex I to Guideline ECB/2024/22.

2. Securities settlement systems shall communicate to the Banque centrale du Luxembourg on an annual basis and in the event of any legislative, regulatory or other change affecting the compliance of said systems with Eurosystem requirements, the pre-established form issued by the Banque centrale du Luxembourg by which they attest that the Eurosystem requirements, defined in Section II of Annex I to Guideline ECB/2024/22, are met.

3. The same arrangements shall apply to the determination of the eligibility of a direct link or a relayed link.

4. Securities settlement systems shall apply to the Banque centrale du Luxembourg for the purpose of obtaining said form.

5. The Eurosystem and, in particular, the Banque centrale du Luxembourg may suspend or withdraw eligibility in the following cases:

• one or more of the eligibility criteria provided for in Section I of Annex I to Guideline ECB/2024/22, as amended, are not met;
• the use of the securities settlement system or the link could jeopardise the safety and efficiency of Eurosystem credit operations, the latter thereby incurring a risk of financial loss, or it is for another reason considered, under the principle of prudence, to present a risk.

Article 2. Repeal

Regulation of the Banque centrale du Luxembourg 2018/ No. 24 of 16 April 2018 implementing certain provisions of Guideline ECB/2018/3 of 7 February 2018 amending Guideline (EU) 2015/510 concerning the implementation of the Eurosystem monetary policy framework (Guideline on general documentation) (ECB/2014/60) is repealed.

Article 3. Entry into force

This Regulation shall enter into force on 16 June 2025.

Article 4. Publication

This Regulation shall be published in the Official Journal of the Grand Duchy of Luxembourg and on the website of the Central Bank (www.bcl.lu).

BANQUE CENTRALE DU LUXEMBOURG
The Directorate