Decision (EU) 2019/1311 of the European Central Bank of 22 July 2019 on a third series of targeted longer-term refinancing operations (ECB/2019/21)

For the purposes of this Decision, the following definitions apply: (1) ‘benchmark net lending’ means the amount of eligible net lending that a participant needs to exceed in the period 1 April 2019 to 31 March 2021 in order to qualify for an interest rate on the participant's TLTRO-III borrowing that is lower than the initial rate applied and which is calculated in accordance with the principles and the detailed provisions set out in Article 4 and Annex I, respectively; (2) ‘benchmark outstanding amount’ means the sum of a participant's outstanding amounts of eligible loans as at 31 March 2019 and the participant's benchmark net lending which is calculated in accordance with the principles and the detailed provisions set out in Article 4 and Annex I, respectively; (3) ‘bid limit’ means the maximum amount that may be borrowed by a participant in any TLTRO-III calculated in accordance with the principles and the detailed provisions set out in Article 4 and Annex I, respectively; (4) ‘borrowing allowance’ means the overall amount that may be borrowed by a participant in all TLTROs-III and calculated in accordance with the principles and the detailed provisions set out in Article 4 and Annex I, respectively; (5) ‘credit institution’ means a credit institution as defined in point (14) of Article 2 of Guideline (EU) 2015/510 of the European Central Bank (ECB/2014/60) ; (6) ‘deviation from the benchmark outstanding amount’ means the percentage points by which a participant's eligible loans granted in the period 1 April 2019 to 31 March 2021 have increased or decreased with respect to its benchmark outstanding amount, as calculated in accordance with the detailed provisions set out in Article 4 and Annex I; (7) ‘eligible loans’ means loans to non-financial corporations and households (including non-profit institutions serving households) resident, as defined in point (4) of Article 1 of Council Regulation (EC) No 2533/98 , in Member States whose currency is the euro, except loans to households for house purchases, as further detailed in Annex II; (8) ‘eligible net lending’ means gross lending in the form of eligible loans net of repayments of outstanding amounts of eligible loans during a specific period, as further detailed in Annex II; (9) ‘financial vehicle corporation’ (FVC) means a financial vehicle corporation as defined in Article 1(1) of Regulation (EU) No 1075/2013 of the European Central Bank (ECB/2013/40) ; (10) ‘first reference period’ means the period 1 April 2018 to 31 March 2019; (11) ‘FVC code’ means a unique identification code for an FVC on the list of FVCs maintained and published by the European Central Bank (ECB) for statistical purposes in accordance with Article 3 of Regulation (EU) No 1075/2013 (ECB/2013/40); (12) ‘interest rate incentive adjustment’ means the reduction, if any, in the interest rate to be applied to amounts borrowed under TLTROs-III, expressed as a fraction of the average difference between the maximum possible interest rate and the minimum possible interest rate, as calculated in accordance with the detailed provisions set out in Annex I; (13) ‘Legal Entity Identifier’ (LEI) means an alphanumeric reference code in line with ISO 17442 that is assigned to a legal entity; (14) ‘monetary financial institution’ (MFI) means a monetary financial institution as defined in point (a) of Article 1 of Regulation (EU) No 1071/2013 of the European Central Bank (ECB/2013/33) ; (15) ‘MFI code’ means a unique identification code for an MFI in the list of MFIs maintained and published by the European Central Bank (ECB) for statistical purposes in accordance with Article 4 of Regulation (EU) No 1071/2013 (ECB/2013/33); (16) ‘outstanding amounts of eligible loans’ means outstanding eligible loans on the balance sheet, excluding eligible loans securitised or otherwise transferred without derecognition from the balance sheet as further detailed in Annex II; (17) ‘participant’ means a counterparty eligible for Eurosystem monetary policy open market operations in accordance with Guideline (EU) 2015/510 (ECB/2014/60), which submits bids in TLTRO-III tender procedures either on an individual basis or on a group basis as lead institution, and which is subject to all rights and obligations associated with its participation in the TLTRO-III tender procedures; (18) ‘reference outstanding amount’ means the sum of outstanding amounts of eligible loans and, upon exercise of the option in Article 6(3), outstanding amounts of self-securitised eligible loans as at 28 February 2019; (19) ‘relevant NCB’ means, with reference to a particular participant, the NCB of the Member State in which the participant is established; (20) ‘second reference period’ means the period 1 April 2019 to 31 March 2021; (21) ‘securitisation’ means a transaction that is either: (a) a traditional securitisation as defined in Article 2(9) of Regulation (EU) No 2017/2402 of the European Parliament and of the Council ; and/or (b) a securitisation as defined in Article 1(2) of Regulation (EU) No 1075/2013 (ECB/2013/40) and which involves the transfer of the loans being securitised to an FVC; (22) ‘self-securitised eligible loans’ means eligible loans originated and securitised by a participant or a TLTRO-III group member whereby the asset-backed securities resulting from the securitisation are 100 % retained by that participant or TLTRO-III group member.

1 The Eurosystem shall conduct seven TLTROs-III in accordance with the indicative calendar for TLTROs-III published on the ECB's website.

2 Each TLTRO-III shall mature, without there being an option for voluntary early repayment, two years after the respective settlement date, on a day that coincides with the settlement date of a Eurosystem main refinancing operation, in accordance with the indicative calendar for TLTROs-III published on the ECB's website.

3 TLTROs-III shall be: (a) liquidity-providing reverse transactions; (b) executed in a decentralised manner by the NCBs; (c) executed through standard tenders; and (d) executed in the form of fixed-rate tender procedures.

4 The standard conditions under which the NCBs are prepared to conduct credit operations shall apply in respect of TLTROs-III, unless otherwise specified in this Decision. These conditions shall include the procedures for conducting open market operations, the criteria for determining the eligibility of counterparties and collateral for the purposes of Eurosystem credit operations and the sanctions applicable in the event of non-compliance with counterparty obligations. Each of these conditions is laid down in the general and temporary legal frameworks applicable to refinancing operations and as implemented in NCBs' contractual and/or regulatory national frameworks.

5 In the event of a conflict between this Decision and Guideline (EU) 2015/510 (ECB/2014/60) or any other ECB legal act laying down the legal framework applicable to longer-term refinancing operations and/or any national measures implementing it at national level, this Decision shall prevail.

1 Institutions may participate in TLTROs-III on an individual basis if they are eligible counterparties for Eurosystem monetary policy open market operations.

2 Institutions may participate in TLTROs-III on a group basis by forming a TLTRO-III group. Participation on a group basis is relevant for the purposes of calculating the applicable borrowing allowance and the benchmarks as laid down in Article 4 and the associated reporting obligations as laid down in Article 6. Participation on a group basis shall be subject to the following restrictions: (a) an institution shall not be a member of more than one TLTRO-III group; (b) an institution participating in TLTROs-III on a group basis may not participate on an individual basis; (c) the institution appointed as lead institution shall be the only member of the TLTRO-III group that may participate in TLTRO-III tender procedures; and (d) the composition and the lead institution of a TLTRO-III group shall remain unchanged for all TLTROs-III, subject to paragraphs 5 and 6 of this Article.

3 In order to participate in TLTROs-III through a TLTRO-III group, the following conditions shall be fulfilled. (a) With effect from the last day of the month preceding the application referred to in point (d) of this paragraph, each member of a given group shall: (i) have a close link to another member of the group within the meaning of ‘close link’ as defined in Article 138 of Guideline (EU) 2015/510 (ECB/2014/60) and references therein to ‘counterparty’, ‘guarantor’, ‘issuer’ or ‘debtor’ shall be understood as referring to a group member; or (ii) hold required reserves with the Eurosystem in accordance with Regulation (EC) No 1745/2003 of the European Central Bank (ECB/2003/9) indirectly through another member of the group or be used by another member of the group in order to indirectly hold required reserves with the Eurosystem. (b) The group shall appoint one member as the lead institution for the group. The lead institution shall be an eligible counterparty for Eurosystem monetary policy open market operations. (c) Each member of the TLTRO-III group shall be a credit institution established in a Member State whose currency is the euro, and shall fulfil the criteria laid down in points (a), (b) and (c) of Article 55 of Guideline (EU) 2015/510 (ECB/2014/60). (d) Subject to point (e), the lead institution shall apply for group participation to its NCB in accordance with the indicative calendar for TLTROs-III published on the ECB's website. The application shall include: (i) the name of the lead institution; (ii) a list of the MFI codes and names of all the institutions to be included in the TLTRO-III group; (iii) an explanation of the basis for a group application, including a list of the close links and/or indirect reserve holding relationships between the members of the group, identifying each member by its MFI code; (iv) in the case of group members which meet the conditions stipulated in point (ii) of point (a): written confirmation from the lead institution certifying that each member of its TLTRO-III group has formally decided to be a member of the TLTRO-III group in question and agrees not to participate in TLTROs-III as an individual counterparty or as a member of any other TLTRO-III group, together with appropriate evidence that the written confirmation from the lead institution was executed by duly authorised signatories. A lead institution may make the necessary confirmation in respect of its TLTRO-III group members where there are agreements in place, such as those for the indirect holding of minimum reserves pursuant to Article 10(2) of Regulation (EC) No 1745/2003 (ECB/2003/9), which expressly state that the relevant group members participate in Eurosystem open market operations exclusively through the lead institution. The relevant NCB, in cooperation with the NCBs of the relevant group members, may check the validity of the written confirmation concerned; and (v) in the case of a group member to which point (i) of point (a) applies: (1) written confirmation from the relevant group member of its formal decision to be a member of the TLTRO-III group in question and not to participate in TLTROs-III as an individual counterparty or as a member of any other TLTRO-III group; and (2) appropriate evidence, confirmed by the NCB of the relevant group member, that this formal decision was taken at the highest decision-making level of the member's corporate structure, such as the Board of Directors or equivalent in accordance with any applicable law. (e) A TLTRO-II group recognised for the purposes of TLTROs-II pursuant to Decision (EU) 2016/810 (ECB/2016/10) may participate in TLTROs-III as a TLTRO-III group provided that its lead institution submits a written notification to that effect to the relevant NCB in accordance with the indicative calendar for TLTROs-III published on the ECB's website. The notification shall include: (i) a list of members of the TLTRO-II group who have formally decided to be members of the TLTRO-III group in question and not to participate in TLTRO-III as individual counterparties or as members of any other TLTRO-III group. In the case of group members which meet the conditions stipulated in point (ii) of point (a), the lead institution may provide the necessary notification where there are agreements in place, as referred to in point (iv) of point (d), which expressly state that the relevant group members participate in Eurosystem open market operations exclusively through the lead institution. The relevant NCB, in cooperation with the NCBs of the relevant group members, may check the validity of that list; and (ii) appropriate evidence, as may be requested by the lead institution's NCB, that it was executed by duly authorised signatories. (f) The lead institution shall obtain confirmation from its NCB that the TLTRO-III group has been recognised. Prior to issuing its confirmation, the relevant NCB may request any additional information relevant for its assessment of the potential TLTRO-III group from the lead institution. In its assessment of a group application, the relevant NCB shall also take into account any assessments by the NCBs of group members that may be necessary, such as the verification of documentation provided in accordance with points (d) or (e) as applicable. For the purposes of this Decision, credit institutions subject to consolidated supervision, including branches of the same credit institution, shall also be regarded as suitable applicants for TLTRO-III group recognition, and shall be required to meet the conditions laid down in this Article mutatis mutandis. This facilitates the formation of TLTRO-III groups among such institutions, where they are part of the same legal entity. For the purpose of confirming the formation, or a change in the composition, of a TLTRO-III group of this nature, paragraph 3(d)(v) and paragraph 6(b)(ii)(5) shall apply respectively.

4 If one or more of the institutions included in the application for TLTRO-III group recognition do not fulfil the conditions of paragraph 3, the relevant NCB may partially reject the application of the proposed group. In such a case, the institutions submitting the application may decide to act as a TLTRO-III group with the composition limited to those group members that fulfil the necessary conditions or to withdraw the application for TLTRO-III group recognition.

5 In exceptional cases, where there are objective reasons, the Governing Council may decide to deviate from the conditions set out in paragraphs 2 and 3.

6 Without prejudice to paragraph 5, the composition of a group recognised in accordance with paragraph 3 may change in the following circumstances: (a) A member shall be excluded from the TLTRO-III group if it no longer meets the requirements of point (a) or (c) of paragraph 3. The relevant group member's NCB shall inform the lead institution of the group member's failure to meet those requirements. In such cases, the lead institution concerned shall notify the relevant NCB of the change in status of its group member. (b) If, in relation to the TLTRO-III group, additional close links or indirect holdings of required reserves with the Eurosystem are established after the last day of the month preceding the application referred to in point (d) of paragraph 3, the TLTRO-III group composition may change to reflect the addition of a new member provided that: (i) the lead institution applies to its NCB for recognition of the change in the TLTRO-III group's composition in accordance with the indicative calendar for TLTROs-III published on the ECB's website; (ii) the application referred to in point (i) includes: (1) the name of the lead institution; (2) the list of MFI codes and names of all the institutions that are intended to be included in the new composition of the TLTRO-III group; (3) an explanation of the basis for the application, including details of the changes to the close links and/or indirect reserve holding relationships between the members of the group, identifying each member by its MFI code; (4) in the case of group members to which point (ii) of paragraph 3(a) applies: written confirmation from the lead institution certifying that each member of its TLTRO-III group has formally decided to be a member of the TLTRO-III group in question and not to participate in TLTROs-III as an individual counterparty or as a member of any other TLTRO-III group. A lead institution may make the necessary certification in respect of its TLTRO-III group members where there are agreements in place, such as those for the indirect holding of minimum reserves pursuant to Article 10(2) of Regulation (EC) No 1745/2003 (ECB/2003/9), which expressly state that the relevant group members participate in Eurosystem open market operations exclusively through the lead institution. The relevant NCB, in cooperation with the NCBs of the relevant group members, may check the validity of that written confirmation; and (5) in the case of group members to which point (i) of paragraph 3(a) applies, written confirmation from each additional member of its formal decision to be a member of the TLTRO-III group in question and not to participate in TLTROs-III as an individual counterparty or as a member of any other TLTRO-III group, and written confirmation from each member of the TLTRO-III group, included in both the old and the new composition, of its formal decision to agree to the new composition of the TLTRO-III group, together with appropriate evidence, confirmed by the NCB of the relevant group member, as detailed in point (v) of paragraph 3(d); and (iii) the lead institution has obtained confirmation from its NCB that the changed TLTRO-III group has been recognised. Prior to issuing its confirmation, the relevant NCB may request any additional information relevant for its assessment of the new TLTRO-III group composition from the lead institution. In its assessment of a group application, the relevant NCB must also take into account any necessary assessment of the NCBs of group members, such as the verification of documentation provided in accordance with point (ii). (c) If, in relation to the TLTRO-III group, a merger, acquisition or division involving the TLTRO-III group members takes place after the last day of the month preceding the application referred to in point (d) of paragraph 3 and that operation does not result in any change in the set of eligible loans, the TLTRO-III group composition may change to reflect the merger, acquisition or division, as applicable, provided that the conditions listed in point (b) are met.

7 Where changes in the composition of a TLTRO-III group have been accepted by the Governing Council in accordance with paragraph 5, or changes in the composition of TLTRO-III groups have taken place in accordance with paragraph 6, unless otherwise decided by the Governing Council, the following shall apply: (a) in respect of the changes to which paragraph 5, paragraph 6(b) or paragraph 6(c) applies, the lead institution may participate in a TLTRO-III on the basis of the new composition of its TLTRO-III group only after it has obtained confirmation from its NCB that the new composition of the TLTRO-III group has been recognised; and (b) an institution that is no longer a member of a TLTRO-III group shall not participate in any further TLTRO-III either individually or as member of another TLTRO-III group, unless it submits a new application to participate in accordance with paragraphs 1, 3 or 6.

8 If a lead institution loses its eligibility as a counterparty for Eurosystem monetary policy open market operations, its TLTRO-III group shall no longer be recognised and such lead institution shall be obliged to repay all amounts borrowed under TLTROs-III.

1 The borrowing allowance applicable to an individual participant shall be calculated on the basis of the loan data in respect of the reference outstanding amount of the individual participant. The borrowing allowance applicable to a participant which is the lead institution of a TLTRO-III group shall be calculated on the basis of the aggregated loan data in respect of the reference outstanding amount for all members of the TLTRO-III group.

2 Each participant's borrowing allowance shall equal 30 % of its total reference outstanding amount, less any amount previously borrowed by that TLTRO-III participant under TLTROs-II pursuant to Decision (EU) 2016/810 (ECB/2016/10) and still outstanding on the settlement date of a TLTRO-III having regard to any legally binding notification for early repayment submitted by the participant in accordance with Article 6 of Decision (EU) 2016/810 (ECB/2016/10). The relevant technical calculations are outlined in Annex I.

3 If a member of a TLTRO group recognised for the purposes of TLTROs-II pursuant to Decision (EU) 2016/810 (ECB/2016/10) is not willing to be a member of the respective TLTRO-III group, for the purposes of calculating the TLTRO-III borrowing allowance for that credit institution as an individual participant, that institution shall be deemed to have borrowed under TLTROs-II an amount equal to the amount borrowed by the lead institution of the TLTRO-II group under TLTROs-II and still outstanding on the settlement date of a TLTRO-III multiplied by the share of eligible loans of the member to those of the TLTRO-II group as at 31 January 2016. This latter amount will be subtracted from the amount that the respective TLTRO-III group is deemed to have borrowed under TLTROs-II for the purpose of calculating the TLTRO-III borrowing allowance of the lead institution.

4 Each participant's bid limit for each TLTRO-III shall be equal to either: (i) its borrowing allowance reduced by the amounts borrowed under previous TLTROs-III; or (ii) one tenth of the total reference outstanding amount, whichever is lower. This amount shall be considered to represent a maximum bid limit for each participant and the rules applicable to bids exceeding the maximum bid limit, as laid down in Article 36 of Guideline (EU) 2015/510 (ECB/2014/60), shall apply. The relevant technical calculations are outlined in Annex I.

5 A participant's benchmark net lending shall be determined on the basis of eligible net lending in the first reference period, as follows: (a) for participants who report positive or zero eligible net lending in the first reference period, the benchmark net lending shall be zero; (b) for participants who report negative eligible net lending in the first reference period, the benchmark net lending shall be equal to the eligible net lending for the first reference period. The relevant technical calculations are outlined in Annex I. The benchmark net lending for participants that have been granted banking licences after 28 February 2019 shall be zero unless the Governing Council, in circumstances where it is objectively justified, decides otherwise.

6 A participant's benchmark outstanding amount shall be determined as the sum of the outstanding amounts of eligible loans as at 31 March 2019 and the benchmark net lending. The relevant technical calculations are outlined in Annex I.

1 Subject to paragraph 2, the interest rate applicable to the amount borrowed under each TLTRO-III shall be set at 10 basis points above the average rate on the main refinancing operation over the life of the respective TLTRO-III.

2 The interest rate applicable to the amounts borrowed by participants whose eligible net lending in the second reference period exceeds their benchmark net lending shall be lower than the rate specified in paragraph 1 and may be as low as 10 basis points above the average rate on the deposit facility over the life of the respective TLTRO-III, depending on the deviation from the benchmark outstanding amount. The detailed provisions and calculations are outlined in Annex I.

3 The deviation from the benchmark outstanding amount, the resulting interest rate incentive adjustment, if any, and the final interest rates shall be communicated to participants in accordance with the indicative calendar for TLTROs-III published on the ECB's website.

4 Interest shall be settled in arrears on the maturity of each TLTRO-III.

5 If, due to the exercise of remedies available to an NCB in accordance with its contractual or regulatory arrangements, a participant is required to repay the TLTRO-III outstanding amounts before the deviation from the benchmark outstanding amount and the resulting interest rate incentive adjustment, if any, are communicated to that participant, the interest rate applicable to the amounts borrowed by that participant under each TLTRO-III shall be set at 10 basis points above the average rate on the main refinancing operation over the life of the relevant TLTRO-III up to the date on which the repayment was required to be made by the NCB. If such repayment is required after the deviation from the benchmark outstanding amount and the resulting interest rate incentive adjustment, if any, have been communicated to the participant, the interest rate applicable to the amounts borrowed by that participant under each TLTRO-III shall be set taking into account the deviation from the benchmark outstanding amount.

1 Each participant in TLTROs-III shall submit to the relevant NCB the data identified in the reporting templates set out in Annex II as follows: (a) the reference outstanding amount for the purposes of establishing the participant's borrowing allowance and bid limits, and data relating to the first reference period for the purposes of establishing the participant's benchmarks (hereinafter referred to as the ‘first report’); and (b) data relating to the second reference period for the purposes of determining the applicable interest rates (hereinafter referred to as the ‘second report’).

2 The data shall be provided in accordance with: (a) the indicative calendar for TLTROs-III published on the ECB's website; (b) the guidelines set out in Annex II; and (c) the minimum standards for accuracy and compliance with concepts specified in Annex IV to Regulation (EU) No 1071/2013 (ECB/2013/33).

3 Participants intending to include self-securitised eligible loans for the purposes of calculating their borrowing allowance shall exercise this option by providing the supplementary items relating to all self-securitised eligible loans, as detailed in Annex II, together with the auditor's evaluation of these supplementary items, in accordance with the following rules: (a) Participants who participate in the first or second TLTRO-III operation may participate on the basis of a first report which omits the supplementary items. However, in order for self-securitised loans to be included in the calculations of their borrowing allowance and bid limits as of the second or third operation, the supplementary items and the respective auditor's evaluation of the supplementary items shall be made available to the relevant NCB before the deadline for the first report for either of these operations specified in the indicative calendar for TLTROs-III published on the ECB's website (b) Participants who first participate in the third or subsequent TLTRO-III operations shall make available, by the relevant deadline specified in the indicative calendar for TLTROs-III published on the ECB's website, to the relevant NCB both the first report including the supplementary items, and the respective auditor's evaluation of the supplementary items.

4 Terms used in the report submitted by participants shall be interpreted in accordance with the definitions of those terms in Regulation (EU) No 1071/2013 (ECB/2013/33).

5 Lead institutions of TLTRO-III groups shall submit reports reflecting aggregated data in respect of all members of the TLTRO-III group. In addition, the lead institution's NCB, or the NCB of a member of a TLTRO-III group may, in coordination with the lead institution's NCB, require the lead institution to submit disaggregated data for each individual group member.

6 Each participant shall ensure that the quality of the data submitted pursuant to paragraphs 1 to 3 is evaluated by an external auditor in accordance with the following rules: (a) the auditor's evaluation of the first report shall be made available to the relevant NCB by the relevant deadline specified in the indicative calendar for TLTROs-III published on the ECB's website; (b) the results of the auditor's evaluation in respect of the second report shall be made available to the relevant NCB by the relevant deadline specified in the indicative calendar for TLTROs-III published on the ECB's website; (c) the auditor's evaluations shall focus on the requirements set out in paragraphs 2 and 4. In particular, the auditor shall: (i) evaluate the accuracy of the data provided by verifying that the set of the participant's eligible loans including, in the case of a lead institution the eligible loans of its TLTRO-III group members, satisfies the eligibility criteria; (ii) check that the data reported complies with the guidelines detailed in Annex II and with the concepts introduced by Regulation (EU) No 1071/2013 (ECB/2013/33); (iii) check that the data reported are consistent with data compiled pursuant to Regulation (EU) No 1071/2013 (ECB/2013/33); (iv) check whether controls and procedures are in place to validate the integrity, accuracy and consistency of the data; and (v) with respect to the supplementary items, ensure, by means of a positive assurance engagement procedure, i.e. a procedure that certifies that the data reported are accurate and relevant, that self-securitised eligible loans included for the purpose of calculating a participant's reference outstanding amount correspond to the relevant asset-backed securities 100 % retained by the respective participant or TLTRO-III group member that originated the self-securitised eligible loans. In the case of participation on a group basis, the results of the auditor's evaluations shall be shared with the NCBs of the other TLTRO-III group members. At the request of the participant's NCB, detailed results of the evaluations conducted pursuant to this paragraph shall be provided to that NCB and, in the case of group participation, subsequently shared with the NCBs of the group members. (d) the auditor's evaluations shall contain, at least the following elements: (i) the type of auditing procedure applied; (ii) the period covered by the audit; (iii) the documentation analysed; (iv) a description of the methods followed by the auditors to perform the tasks described in Article 6(6)(c); (v) where applicable, the identifiers (FVC codes and/or LEIs, as applicable) of each securitisation vehicle holding the self-securitised eligible loans referred to in paragraph (c)(v), and the MFI code of the participant or TLTRO-III group member that originated the self-securitised eligible loans; (vi) corrections performed, if any, after applying the methods described in point (iv); (vii) confirmation that the data included in the reporting templates are in line with the information contained in the participants' internal systems; and (viii) final observations or assessment as a result of the external audit. The Eurosystem may provide further guidance on the manner in which the auditor's evaluation is to be conducted in which case the participants shall ensure that such guidance is applied by the auditors in their evaluation.

7 Subject to paragraph 8, following a change in the TLTRO-III group composition or a corporate reorganisation, such as a merger, acquisition or division (including one that results from a participant's resolution or liquidation), that affects the set of the participant's eligible loans, a revised first report shall be submitted in accordance with the instructions received from the participant's NCB. The relevant NCB shall assess the impact of the revision and undertake appropriate action. Such action may include a requirement to repay amounts borrowed which, taking into account the change to the TLTRO-III group composition or the corporate reorganisation, exceed the relevant borrowing allowance. The participant concerned, which may include a newly-established entity following the corporate reorganisation, shall provide any additional information requested by the relevant NCB to assist in the assessment of the impact of the revision.

8 By way of exception from paragraph 7, revision of the first report is not required, but the relevant impact on eligible loans may instead be recorded as an adjustment in the second report in cases where: (a) the corporate reorganisation involves institutions which prior to the corporate reorganisation were subject to supervisory or resolution measures and these measures, as confirmed by the relevant NCB, actually hampered their ability to lend during at least half of the second reference period; (b) the corporate reorganisation involves an acquisition by a participant that was completed in the last six months of the second reference period; or (c) the relevant NCB assesses the impact of the change in the group composition or corporate reorganisation as not requiring a revised report. For cases (b) and (c), participants may still choose to revise the first report to take into account the corporate reorganisations.

9 The data provided by the participants pursuant to this Article may be used by the Eurosystem for the implementation of the TLTRO-III framework, as well as for the analysis of the framework's effectiveness and other Eurosystem analytical purposes. For these purposes NCBs that receive data reported pursuant to this Article may exchange such data within the Eurosystem. Data reported pursuant to this Article may be also shared within the Eurosystem for the purpose of validating the data provided.

1 Where a participant fails to submit a report or comply with audit requirements, or where errors are identified in the data reported, the following shall apply: (a) If a participant fails to make the first report available to the relevant NCB by the relevant deadline, its borrowing allowance shall be set at zero. (b) If a participant fails to make the results of the auditor's evaluation of the first report available to the relevant NCB by the relevant deadline specified in the indicative calendar for TLTROs-III published on the ECB website, the participant shall repay all the outstanding amounts borrowed under TLTRO-III on the settlement day of the next main refinancing operation at the interest rate of 10 basis points above the average rate on the main refinancing operation over the life of each respective TLTRO-III. (c) If a participant fails to make the second report available to the relevant NCB by the relevant deadline, the interest rate of 10 basis points above the average rate on the main refinancing operation over the life of each respective TLTRO-III shall apply to the amounts borrowed by that participant under TLTROs-III together with an additional daily penalty of EUR 500 until the second report is submitted but up to a maximum of EUR 15000. The penalty shall be accumulated and charged upon receipt by the relevant NCB of the second report or when the maximum penalty has been reached if the second report has still not been received by then. (d) If a participant fails to make the results of the auditor's evaluation of the second report available to the relevant NCB by the relevant deadline, the interest rate of 10 basis points above the average rate on the main refinancing operation over the life of each respective TLTRO-III shall apply to the amounts borrowed by that participant under TLTROs-III. (e) If a participant fails to otherwise comply with the obligations set out in Article 6(6) or (7), the interest rate of 10 basis points above the average rate on the main refinancing operation over the life of each respective TLTRO-III shall apply to the amounts borrowed by that participant under TLTROs-III. (f) If a participant, either in connection with the audit referred to in Article 6(6) or by any other means, identifies errors in the data submitted in the reports, including inaccuracies or incompleteness, it shall notify the relevant NCB thereof within the shortest timeframe possible. Where the relevant NCB has been notified of such errors, inaccuracies or omissions, or where such errors, inaccuracies or omissions come to its attention by other means: (i) the participant shall provide any additional information requested by the relevant NCB within the shortest timeframe possible to assist in assessing the impact of the errors, inaccuracies or omissions concerned; and (ii) the relevant NCB may take appropriate action, which may include a recalculation of the relevant values that in turn may affect the interest rate applied to the participant's borrowing under TLTROs-III and a requirement to repay the amounts borrowed which, due to the error, inaccuracy or omission exceed the participant's borrowing allowance.

2 Paragraph 1 shall be without prejudice to any sanction that may be imposed pursuant to Decision ECB/2010/10 in respect of the reporting obligations laid down in Regulation (EU) No 1071/2013 (ECB/2013/33).

This Decision shall enter into force on 3 August 2019.