- Question ID
-
2023_6733
- Legal act
- Regulation (EU) No 909/2014 (CSDR) - only RTS 2017/390
- Topic
- Market infrastructures
- Article
-
59
- Paragraph
-
4
- Subparagraph
-
c
- COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations
- Regulation (EU) 2017/390 - RTS on prudential requirements of CSDs (CSDR-related)
- Article/Paragraph
-
11(1) and 38
- Name of institution / submitter
-
National Bank of Belgium
- Country of incorporation / residence
-
Belgium
- Type of submitter
-
Competent authority
- Subject matter
-
Clarification on use of prearranged and highly reliable funding arrangements
- Question
-
If a CSD-banking service provider has routine credit at a central bank of issue in the EU, are the requirements in Article 11, paragraph 1, subparagraphs (b) and (d) simultaneously met?
- Background on the question
-
The requirements for collateral referred to in Article 11(1) should meet all conditions, among others: they should be eligible at a central bank of the Union where the CSD-banking service provider has routine credit (subparagraph b) and the CSD-banking service provider should have a prearranged funding arrangement specified in Article 38, which provides for the conversion of these instruments into cash on a same-day basis.
Article 38 in turn, provides the requirements which arrangements have to meet in order to be qualified as “prearranged and highly reliable funding arrangements” (PAFA). This includes (among others) a concentration limit on each financial institution involved in such a PAFA with the CSD-banking service provider (paragraphs 4 and 5). However, there seems to be a possibility for the CSD-banking service provider to qualify access routine credit at the central bank of issue as PAFA as well, given that paragraph 6 states that there is no need to have multiple arrangements in (major) currencies when the CSD-banking service provider has collateral that is eligible for pledging to the relevant central bank.
- Submission date
- Rejected publishing date
-
- Rationale for rejection
-
This question has been rejected because it is considered that EBA guidance or clarification is not needed with regard to the issue that it raises. For example, this can be the case where it is considered that the existing regulatory framework is sufficiently clear and unambiguous, or where different practices may be possible but it is not currently necessary to harmonise these further through the Q&A process.
The Single Rule Book Q&A tool has been established to provide explanations and non-binding interpretations on questions relating to the practical application or implementation of the provisions of legislative acts referred to in Article 1(2) of the EBA’s founding Regulation, as well as associated delegated and implementing acts, and guidelines and recommendations, adopted under these legislative acts.
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- Status
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Rejected question