Published: 2016-05-07
Key Benefits:
Passed 28.04.2016 Annex 5
This Decree is established on the basis of clause 2 (2) 4) and clause 14 5) of the Bank of Estonia (Eesti Pank) Act and subsection 87 (2) of the Credit Institutions Act.
Eesti Pank Governor’s Decree No 4 of 9 May 2008 “Approval of TARGET2-Eesti rules” (RT I, 12.08.2015, 5) (hereinafter the Decree) is amended as follows:
(1) Appendix 1 to the Decree “Harmonised conditions for participation in TARGET2-Eesti” is amended as follows:
1) in Article 1, the definition of ‘direct debit authorisation’ is replaced by the following:
“direct debit authorisation means a general instruction by a payer to its CB entitling and obliging that CB to debit the payer’s account upon receipt of a valid direct debit instruction from a payee;”;
2) Article 7(3) is replaced by the following:
“(3) A PM account holder accepting its PM account to be designated as the Main PM account defined in Appendix 1 A shall be bound by any invoices related to the opening and operation of each Dedicated Cash Account linked to that PM account, as set out in Appendix VI to this Appendix, regardless of the content of, or any non-compliance with, the contractual or other arrangements between that PM account holder and the DCA holder.”;
3) in Article 7, the following paragraph 5 is inserted:
“(5) A PM account holder that also holds a DCA used for auto-collateralisation shall be liable for any penalties levied in accordance with paragraph 9(d) of Appendix 3 A.”;
4) in Article 34, the following text is added at the end of paragraph 1:
“For the purposes of this paragraph, the taking of resolution action within the meaning of Directive 2014/59/EU of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council against a PM account holder shall not automatically qualify as the opening of insolvency proceedings.”;
5) in Article 34, paragraph 4(a) is replaced by the following:
“a) In the event that Eesti Pank suspends or terminates a PM account holder’s participation in TARGET2-Eesti under paragraph 1 or 2, Eesti Pank shall immediately inform, by means of an ICM broadcast message or a T2S broadcast message, that PM account holder, other CBs and PM account holders and DCA holders in all of the TARGET2 component systems of such suspension or termination. Such message shall be deemed to have been issued by the home CB of the PM account holder that receives the message.”;
6) in Article 34, paragraph 4(b) is declared invalid;
7) in Article 38, paragraph 1 is replaced by the following:
“(1) Eesti Pank shall keep confidential all sensitive or secret information, including when such information relates to payment, technical or organisational information belonging to the participant, participants from the same AL or CAI group or the participant’s customers, unless the participant or its customer has given its written consent to disclose or such disclosure is permitted or required under law.”;
8) in Appendix II “TARGET2 compensation scheme”, paragraph 3(a)(ii) is replaced by the following:
“ii) interest compensation shall be determined by applying a reference rate to be fixed from day to day. This reference rate shall be the lower of the euro overnight index average (EONIA) rate and the marginal lending rate. The reference rate shall be applied to the amount of the payment order not settled as a result of the technical malfunction of TARGET2 for each day in the period from the date of the actual or, in relation to payment orders referred to in paragraph 2(b)(ii), intended submission of the payment order until the date on which the payment order was or could have been successfully settled. Any interest or charges resulting from the placing of any non-settled payment orders on deposit with the Eurosystem shall be deducted from, or charged to, the amount of any compensation, as the case may be;”;
9) In Appendix IV “Business continuity and contingency procedures”, paragraph 4 is replaced by the following:
“4. Relocating the operation of the SSP to an alternative site
a) In case any of the events referred to in paragraph 2(a) occur, the operation of the SSP may be relocated to an alternative site, either within the same region or in another region.
b) In the event that the operation of the SSP or the T2S Platform is relocated from one region (Region 1) to another region (Region 2), the participants shall endeavour to reconcile their positions up to the point of the failure or the occurrence of the abnormal external events and provide to Eesti Pank all relevant information in this respect.
c) Where a PM to DCA liquidity transfer order is debited on the participant’s PM account on the SSP in Region 1, but, after reconciliation, is not shown as debited on the SSP in Region 2, the CB responsible for the participant shall debit the participant’s PM account in Region 2 to return the participant’s PM account balance to the level it had prior to the relocation.”;
10) in Appendix IV “Business continuity and contingency procedures”, paragraph 6(d)(iii) is replaced by the following:
“iii) DCA to PM liquidity transfer orders.”;
11) in Appendix IV “Business continuity and contingency procedures”, paragraph 8(c) is replaced by the following:
“c) Eesti Pank may require that the participants participate in regular or ad hoc testing of business continuity and contingency processing measures, training or any other preventative arrangements, as deemed necessary by Eesti Pank. Any costs incurred by the participants as a result of such testing or other arrangements shall be borne solely by the participants.”;
12) in Appendix VI “Fee schedule and invoicing”, paragraph 15 is replaced by the following:
“15. An ancillary system using the Participant Interface, irrespective of the number of any accounts it may hold with Eesti Pank and/or the SCB, shall be subject to a fee schedule consisting of the following elements:
a) a fixed monthly fee of EUR 1,000 to be charged to each ancillary system (Fixed Fee I);
b) a second monthly fixed fee of between EUR 417 and EUR 8,333, in proportion to the underlying gross value of the ancillary system’s euro cash settlement transactions (Fixed Fee II):
| Band | From (EUR million/day) | To (EUR million/day) | Annual fee EUR | Monthly fee EUR |
| 1 | 0 | Below 1,000 | 5,000 | 417 |
| 2 | 1,000 | Below 2,500 | 10,000 | 833 |
| 3 | 2,500 | Below 5,000 | 20,000 | 1,667 |
| 4 | 5,000 | Below 10,000 | 30,000 | 2,500 |
| 5 | 10,000 | Below 50,000 | 40,000 | 3,333 |
| 6 | 50,000 | Below 500,000 | 50,000 | 4,167 |
| 7 | Above 500,000 | — | 100,000 | 8,333 |
The gross value of the ancillary system’s euro cash settlement transactions shall be calculated by Eesti Pank once a year on the basis of such gross value during the previous year and the calculated gross value shall be applied for calculating the fee from 1 January of each calendar year. The gross value shall exclude transactions settled on DCAs;
(c) a transaction fee calculated on the same basis as the schedule established for PM account holders in this Appendix. The ancillary system may choose one of the two options: either to pay a flat EUR 0.80 fee per credit instruction (Option A) or to pay a fee calculated on a degressive basis (Option B), subject to the following modifications:
(i) for Option B, the limits of the bands relating to the volume of credit instructions are divided by two; and
(ii) a monthly fixed fee of EUR 150 (under Option A) or EUR 1,875 (under Option B) shall be charged in addition to Fixed Fee I and Fixed Fee II.
Credit instruction means a payment instruction submitted by an ancillary system and addressed to the ancillary system central bank to debit one of the accounts kept and/or managed by the ancillary system in the PM, and to credit a settlement bank’s account or sub-account by the amount specified in the credit instruction.
(d) In addition to the fees set out in points (a) to (c), an ancillary system using the Participant Interface shall also be subject to the following fees:
(i) if the ancillary system makes use of the TARGET2 value-added services for T2S, the monthly fee for the use of the value added services shall be EUR 50 for those systems that have chosen option A and EUR 625 for those systems that have chosen option B. This fee shall be charged for each account held by the ancillary system that uses the services;
ii) if the ancillary system holds a Main PM account linked to one or more DCAs, the monthly fee shall be EUR 250 for each linked DCA;
iii) the ancillary system as Main PM account holder shall be charged the following fees for T2S services connected with the linked DCA(s). These items
shall be billed separately:
| Tariff items | Price | Explanation |
| Settlement services |
|
|
| DCA to DCA liquidity transfer orders | 9 | Per transfer |
| Intra-balance movement (i.e. blocking, unblocking, reservation of liquidity etc.) | 6 | Per transaction |
| Information services |
|
|
| A2A reports | 0.4 | Per business item in any A2A report generated |
| A2A queries | 0.7 | Per queried business item in any A2A query generated |
| U2A queries | 10 | Per executed search function |
| U2A queries downloaded | 0.7 | Per queried business item in any U2A query generated and downloaded |
| Messages bundled into a file | 0.4 | Per message in a file |
| Transmissions | 1.2 | Per transmission |
”.
(2) Appendix 1 A to the Decree “Harmonised conditions for the opening and operation of dedicated cash account in TARGET2-Eesti” is amended as follows:
1) in Article 1, the definition of ‘auto collateralisation’ is replaced by the following:
“ - auto-collateralisation means intraday credit granted by the euro area national central bank (NCB) in central bank money triggered when a DCA holder has insufficient funds to settle securities transactions, whereby such intraday credit is collateralised either with the securities being purchased (collateral on flow), or with securities already held by the DCA holder (collateral on stock). An auto collateralisation transaction consists of two distinct transactions, one for the granting of auto-collateralisation and one for its reimbursement. It may also include a third transaction for any eventual relocation of collateral. For the purposes of Article 16, all three transactions are deemed to have been entered into the system and deemed to be irrevocable at the same time as the transaction for the granting of the auto-collateralisation;”;
2) in Article 1, the definition of ‘Main PM account’ is replaced by the following:
“ - Main PM account means the PM Account to which a DCA is linked and to which any remaining balance will be automatically repatriated at the end of the day,”;
3) in Article 24, paragraph 1 is replaced by the following:
“(1) A DCA holder’s participation in TARGET2-Eesti shall be immediately terminated without prior notice or suspended if one of the following events of default occurs:
a) the opening of insolvency proceedings; and/or
b) the DCA holder no longer meets the access criteria laid down in Article 5.
For the purposes of this paragraph, the taking of resolution action within the meaning of Directive 2014/59/EU of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012 (OJ L 173, 12.6.2014, p. 190), of the European Parliament and of the Council against a DCA holder shall not automatically qualify as the opening of insolvency proceedings.”;
4) in Article 24, paragraph 4(a) is replaced by the following:
“a) In the event that Eesti Pank suspends or terminates a DCA holder’s participation in TARGET2-Eesti under paragraph 1 or 2, Eesti Pank shall immediately inform, by means of an ICM broadcast message or a T2S broadcast message, that DCA holder, other CBs and DCA holders and PM account holders in all of the TARGET2 component systems of such suspension or termination. Such message shall be deemed to have been issued by the home CB of the PM account holder that receives the message.“;
5) in Appendix II “TARGET2 compensation scheme in relation to the opening and the operation of the DCA”, paragraph 3(a)(ii) is replaced by the following:
“ii) interest compensation shall be determined by applying a reference rate to be fixed from day to day. This reference rate shall be the lower of the euro overnight index average (EONIA) rate and the marginal lending rate. The reference rate shall be applied to the amount of the payment order not settled as a result of the technical malfunction of TARGET2 for each day in the period from the date of the actual or, in relation to payment orders referred to in paragraph 2(b)(ii), intended submission of the payment order until the date on which the payment order was or could have been successfully settled. Any interest or charges resulting from the placing of any non-settled payment orders on deposit with the Eurosystem shall be deducted from, or charged to, the amount of any compensation, as the case may be;”;
6) in Appendix IV “Business continuity and contingency procedures”, paragraph 7(b) is replaced by the following:
“b) Eesti Pank may require that the DCA holders participate in regular or ad hoc testing of business continuity and contingency processing measures, training or any other preventative arrangements, as deemed necessary by Eesti Pank. Any costs incurred by the DCA holders as a result of such testing or other arrangements shall be borne solely by the DCA holders.”;
7) appendix VI “Fee schedule” is replaced by the following:
“Appendix VI
Fees for T2S services
The following fees for T2S services connected with DCAs shall be charged to the Main PM account holders:
| Tariff items | Price | Explanation |
| Settlement services |
|
|
| DCA to DCA liquidity transfer orders | 9 | Per transfer |
| Intra-balance movement (i.e. blocking, unblocking, reservation of liquidity etc.) | 6 | Per transaction |
| Information services |
|
|
| A2A reports | 0.4 | Per business item in any A2A report generated |
| A2A queries | 0.7 | Per queried business item in any A2A query generated |
| U2A queries | 10 | Per executed search function |
| U2A queries downloaded | 0.7 | Per queried business item in any U2A query generated and downloaded |
| Messages bundled into a file | 0.4 | Per message in a file |
| Transmissions | 1.2 | Per transmission |
”.
(3) In Appendix 2 to the Decree “Supplemental and modified harmonised conditions for participation in TARGET2-Eesti using Internet-based access”, paragraph 21 of Appendix II A “Fee schedule and invoicing for Internet-based access” is replaced by the following:
“21. Eesti Pank shall issue and maintain up to five active certificates per participant for each PM account free of charge. Eesti Pank shall charge a fee of EUR 120 for the issuance of a sixth and for each subsequent active certificate. Eesti Pank shall charge an annual maintenance fee of EUR 30 for the sixth and for each subsequent active certificate. Active certificates shall be valid for five years.”.
(4) Appendix 3 to the Decree “Provision of intraday credit” is amended and recast (enclosed).
(5) Appendix 3 A to the Decree “Conditions for auto-collateralisation operations“ is amended as follows:
1) The list of definitions, title and introductory sentence is replaced by the following:
“Application and definitions
The provisions of this Appendix shall be applied with other Appendices to Eesti Pank Governor’s Decree No 4 of 9 May 2008 “Approval of TARGET2-Eesti rules” and the following definitions are used therein:”;
2) in the list of definitions, point (1) ‘auto-collateralisation’ is replaced by the following:
“1) auto-collateralisation means intraday credit granted by the euro area national central bank (NCB) in central bank money triggered when a DCA holder has insufficient funds to settle securities transactions, whereby such intraday credit is collateralised either with the securities being purchased (collateral on flow), or with securities already held by the DCA holder (collateral on stock). An auto collateralisation transaction consists of two distinct transactions, one for the granting of auto-collateralisation and one for its reimbursement. It may also include a third transaction for any eventual relocation of collateral. For the purposes of Article 16 of Appendix 1 A, all three transactions are deemed to have been entered into the system and deemed to be irrevocable at the same time as the transaction for the granting of the auto-collateralisation;”;
3) in the list of definitions, point (6) ‘close links’ is replaced by the following:
“6) close links means close links within the meaning of Article 138 of Guideline (EU) 2015/510 of the European Central Bank on the implementation of the Eurosystem monetary policy framework (ECB/2014/60);”;
4) paragraph 3 is replaced by the following:
“3. Auto-collateralisation shall be based on eligible collateral. Eligible collateral shall consist of the same assets as eligible for use in Eurosystem monetary policy operations, and shall be subject to the same valuation and risk control rules as those laid down in Part Four of Guideline (EU) 2015/510 (ECB/2014/60).”;
5) paragraph 4 is replaced by the following:
“4. Debt instruments issued or guaranteed by the entity, or by any other third party with which the entity has close links, may only be accepted as eligible collateral in the situations laid down in Part Four of Guideline (EU) 2015/510 (ECB/2014/60).”;
6) in paragraph 9, point (d) is replaced by the following:
“d) Eesti Pank shall apply a penalty fee of EUR 1,000 for each business day where one or more recourses to collateral relocation under point (c) occur. The penalty fee shall be debited from the relevant PM account of the DCA holder referred to in point (c).”;
7) paragraph 10 is replaced by the following:
10. Auto-collateralisation facilities may be suspended, limited or terminated in the following cases:
a) Eesti Pank shall suspend or terminate access to auto-collateralisation facilities if one of the following events of default occurs:
i) the DCA or PM account of the entity with Eesti Pank is suspended or closed;
ii) the entity concerned ceases to meet any of the requirements laid down in this Appendix;
iii) a decision is made by a competent judicial or other authority to implement in relation to the entity a procedure for the winding-up of the entity or the appointment of a liquidator or analogous officer over the entity or any other analogous procedure;
iv) the entity becomes subject to the freezing of funds and/or other measures imposed by the Union restricting the entity’s ability to use its funds;
v) the entity’s eligibility as a counterparty for Eurosystem monetary policy operations has been suspended or terminated.
b) Eesti Pank may terminate access to auto-collateralisation facilities if another NCB suspends or terminates the DCA holder’s participation in TARGET2 pursuant to Articles 24(2)(b) to (e) of Appendix 1 A, or if one or more events of default (other than those referred to in Article 24(2)(a) of Appendix 1 A) occur.
c) The Eurosystem may decide to suspend, limit or exclude counterparties’ access to monetary policy instruments on the grounds of prudence or otherwise in accordance with Article 158 of Guideline (EU) 2015/510 (ECB/2014/60). In such cases, Eesti Pank shall implement that decision in respect of access to auto-collateralisation facilities pursuant to provisions in the contractual or regulatory arrangements applied by Eesti Pank.
d) Eesti Pank may decide to suspend, limit or terminate a DCA holder’s access to auto-collateralisation facilities if the DCA holder is deemed to pose risks on the grounds of prudence. In such cases, Eesti Pank shall immediately notify the ECB and other euro area NCBs and connected NCBs thereof in writing. Where appropriate, the Governing Council shall decide upon uniform implementation of the measures taken in all TARGET2 component systems.”.
Ardo Hansson
Governor
