Decision of the European Central Bank of 14 December 2011 on additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral (ECB/2011/25) (2011/870/EU) (repealed)

Article 1 Additional measures relating to refinancing operations and eligible collateral

1. The rules for the conduct of Eurosystem monetary policy operations and the eligibility criteria for collateral laid down in this Decision shall apply in conjunction with the General Documentation.

2. In the event of any discrepancy between this Decision and the General Documentation, as implemented at national level by the NCBs, the former shall prevail. The NCBs shall continue to apply all provisions of the General Documentation unaltered unless otherwise provided for in this Decision.

Article 2 Option to terminate or modify longer-term refinancing operations

The Eurosystem may decide that, under certain conditions, counterparties may reduce the amount of, or terminate, certain longer-term refinancing operations before maturity.

Article 3 Admission of certain additional asset-backed securities

1. In addition to asset-backed securities (ABS) eligible under Chapter 6 of the General Documentation, ABS whose underlying assets include either only residential mortgages or only loans to small and medium-sized enterprises (SMEs) shall be eligible as collateral for Eurosystem monetary policy operations even if those ABS do not fulfil the credit assessment requirements under Section 6.3.2 of the General Documentation but otherwise comply with all eligibility criteria applicable to ABS pursuant to the General Documentation, provided that they have a second-best rating of at least the Eurosystem’s minimum threshold of credit quality step 2 of the Eurosystem’s harmonised rating scale, as referred to in Section 6.3.1 of the General Documentation, at issuance and at any time subsequently. They shall also satisfy all the following requirements:

(a) the cash-flow generating assets backing the ABS shall belong to the same asset class, i.e. the asset pool shall consist of either only residential mortgages or only loans to SMEs, and there shall be no mix of assets of different asset classes;

(b) the cash-flow generating assets backing the ABS shall not contain loans which are:

(i)

at the time of the issuance of the ABS, non-performing; or

(ii)

at any time, structured, syndicated or leveraged;

(c) the counterparty submitting an ABS as collateral, or any third party with which it has close links, shall not act as an interest rate hedge provider in relation to the ABS;

(d) the ABS transaction documents shall contain servicing continuity provisions.

2. For the purposes of paragraph 1 the terms ‘small enterprise’ and ‘medium-sized enterprise’ shall have the meaning given to them in Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises(1).

Article 4 Admission of certain additional credit claims

1. An NCB may accept as collateral for Eurosystem monetary policy operations credit claims that do not satisfy the Eurosystem eligibility criteria.

2. The NCBs shall establish eligibility criteria and risk control measures for accepting credit claims pursuant to paragraph 1. Such eligibility criteria and risk control measures shall be subject to prior approval by the Governing Council.

Article 5 Final provisions

This Decision shall enter into force on 19 December 2011.

Done at Frankfurt am Main, 14 December 2011.

For the Governing Council of the ECB

The President of the ECB

Mario Draghi