Guideline of the European Central Bank of 20 June 2008 on the management of the foreign reserve assets of the European Central Bank by the national central banks and the legal documentation for operations involving such assets (recast) (ECB/2008/5)

For the purposes of this Guideline: ‘euro area NCB’ means the NCB of a Member State that has adopted the euro, and ‘European jurisdictions’ means the jurisdictions of all Member States that have adopted the euro in accordance with the Treaty, as well as Denmark, Sweden, Switzerland and the United Kingdom (England and Wales only).

1 Each euro area NCB shall be entitled to participate in the operational management of the foreign reserve assets transferred to the ECB. A euro area NCB may decide to abstain from such management or to pool such management with one or more other euro area NCBs. If a euro area NCB does not participate in the operational management of the ECB’s foreign reserve assets, then the other euro area NCBs shall manage the assets that otherwise would have been managed by the abstaining euro area NCB.

2 The euro area NCBs shall carry out operations involving the foreign reserve assets of the ECB as agents of the ECB. By commencing such operations, a euro area NCB shall be deemed to acknowledge its status as the ECB’s agent. In relation to all operations that the euro area NCBs conduct on the ECB’s behalf, when agreeing on each operation such euro area NCBs shall disclose to all parties the ECB’s status as principal both by name and by reference to an account number or identifier.

3 When carrying out operations involving the foreign reserve assets of the ECB as the ECB’s agent, each euro area NCB shall subordinate its own interests, or the interests of any other entity for which it carries out operations, to the ECB’s interests.

4 When asked by a counterparty of the ECB for proof of its authority to carry out operations involving the foreign reserve assets of the ECB as the ECB’s agent, a euro area NCB shall provide such counterparty with proof of its mandate of agency.

1 All operations involving the foreign reserve assets of the ECB shall be conducted using standard legal documentation, as required by this Article and in such forms as may be approved or amended by the ECB from time to time. Before a euro area NCB may commence trading with a counterparty on behalf of the ECB, the legal documentation shall be signed by the counterparty and the originals lodged with the ECB.

2 Repurchase, reverse repurchase, buy/sell-back and sell/buy-back operations involving the foreign reserve assets of the ECB shall be documented using the following standard agreements: (a) the FBE Master Agreement for Financial Transactions (Edition 2004) shall be used for operations with counterparties organised or incorporated under the laws of any of the European jurisdictions and under the laws of Northern Ireland and Scotland; (b) the Bond Market Association Master Repurchase Agreement, (September 1996 version) shall be used for operations with counterparties organised or incorporated under US federal or state laws; and (c) the TBMA/ISMA Global Master Repurchase Agreement (2000 version) shall be used for operations with counterparties organised or incorporated under the laws of any jurisdiction other than those listed in subparagraphs (a) or (b).

3 Over-the-counter derivatives operations involving the foreign reserve assets of the ECB shall be documented using the following standard agreements: (a) the FBE Master Agreement for Financial Transactions (Edition 2004) shall be used for operations with counterparties organised or incorporated under the laws of any of the European jurisdictions; (b) the 1992 International Swaps and Derivatives Association Master Agreement (Multicurrency — cross-border, New York law version) shall be used for operations with counterparties organised or incorporated under US federal or state laws; and (c) the 1992 International Swaps and Derivatives Association Master Agreement (Multicurrency — cross-border, English law version) shall be used for operations with counterparties organised or incorporated under the laws of any jurisdiction other than those listed in subparagraphs (a) or (b).

4 The Executive Board may decide to use one of the standard agreements referred to in paragraphs 2(c) or 3(c) rather than the agreements referred to in paragraphs 2(a) or 3(a) in relation to a Member State when it adopts the euro, if no legal assessment that is both in form and in substance acceptable to the ECB is available regarding the use of the relevant standard agreement in that Member State. The Executive Board shall promptly inform the Governing Council of any decision taken under this provision.

5 Deposits involving the ECB’s foreign reserve assets with counterparties which: (i) are eligible for the operations mentioned in paragraphs 2 and/or 3 above; and (ii) are organised or incorporated under the laws of any of the European jurisdictions, except Ireland, shall be documented using the FBE Master Agreement for Financial Transactions (Edition 2004). In cases not falling under points (i) and (ii) above, deposits involving the ECB’s foreign reserve assets shall be documented using the master netting agreement as specified in paragraph (7) below.

6 A document in the format set out in Annex I (hereinafter the ECB Annex) shall be annexed to and form an integral part of every standard agreement under which repurchase, reverse repurchase, buy/sell-back, sell/buy-back, securities lending, triparty repo or over-the-counter derivatives operations involving the ECB’s foreign reserve assets are conducted unless such operations are conducted under the FBE Master Agreement for Financial Transactions (Edition 2004).

7 A master netting agreement in one of the forms set out in Annex II shall be concluded with all counterparties, except counterparties: (i) with which the ECB has signed an FBE Master Agreement for Financial Transactions (Edition 2004); and (ii) which are organised or incorporated under the laws of any of the European jurisdictions, except Ireland, as follows: (a) a master netting agreement governed by English law and drafted in English in the form set out in Annex IIa shall be concluded with all counterparties, with the exception of the counterparties specified in point (b), (c) and (d); (b) a master netting agreement governed by French law and drafted in French in the form set out in Annex IIb shall be concluded with counterparties incorporated in France; (c) a master netting agreement governed by German law and drafted in German in the form set out in Annex IIc shall be concluded with counterparties incorporated in Germany; and (d) a master netting agreement governed by New York law and drafted in English in the form set out in Annex IId shall be concluded with counterparties incorporated in the United States.

8 The provision of financial services involving the foreign reserve assets of the ECB by financial intermediaries including, without limitation, banking, brokerage, custodial and investment services obtained from correspondents, custodians and depositories, settlement organisations and central clearers for exchange-traded derivatives shall be documented under such specific agreements as the ECB may approve from time to time.

1 Guideline ECB/2006/28 is hereby repealed with effect from 25 June 2008.

2 References to Guideline ECB/2006/28 shall be construed as being made to this Guideline.

3 This Guideline shall enter into force on 25 June 2008.

This Guideline applies to the euro area NCBs.