Decision (EU) 2016/810 of the European Central BankDangos y teitl llawn

Article 3 U.K. Participation

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

2. Institutions may participate in TLTROs-II on a group basis by forming a TLTRO-II 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 7. 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-II group;

(b) an institution participating in TLTROs-II 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-II group that may participate in TLTRO-II tender procedures; and

(d) the composition and the lead institution of a TLTRO-II group shall remain unchanged for all TLTROs-II, subject to paragraphs 6 and 7 of this Article.

3. In order to participate in TLTROs-II through a TLTRO-II 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)(1) 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-II 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-II 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-II 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-II group has formally decided to be a member of the TLTRO-II group in question and agrees not to participate in TLTROs-II as an individual counterparty or as a member of any other TLTRO-II 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-II 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-II group in question and not to participate in TLTROs-II as an individual counterparty or as a member of any other TLTRO-II 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 group recognised for the purposes of TLTROs pursuant to Decision ECB/2014/34 may participate in TLTROs-II as a TLTRO-II 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-II published on the ECB's website. The notification shall include:

(i)

a list of members of the TLTRO group who have formally decided to be members of the TLTRO-II group in question and not to participate in TLTRO-II as individual counterparties or as members of any other TLTRO-II 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-II 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-II 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-II group recognition, and shall be required to meet the conditions laid down in this Article mutatis mutandis. This facilitates the formation of TLTRO-II 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-II group of this nature, paragraph 3(d)(iv) and paragraph 6(b)(ii)(4) shall apply respectively.

4. If one or more of the institutions included in the application for TLTRO-II 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-II group with the composition limited to those group members that fulfil the necessary conditions or to withdraw the application for TLTRO-II 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-II 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-II 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-II group composition may change to reflect the addition of a new member provided that:

(i)

[F1 the lead institution applies to its NCB for recognition of the change in the TLTRO-II group's composition in accordance with the indicative calendar for TLTROs-II 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-II 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-II group has formally decided to be a member of the TLTRO-II group in question and not to participate in TLTROs-II as an individual counterparty or as a member of any other TLTRO-II group. A lead institution may make the necessary certification in respect of its TLTRO-II 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-II group in question and not to participate in TLTROs-II as an individual counterparty or as a member of any other TLTRO-II group, and written confirmation from each member of the TLTRO-II group, included in both the old and the new composition, of its formal decision to agree to the new composition of the TLTRO-II 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-II 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-II 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-II group, a merger, acquisition or division involving the TLTRO-II 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-II 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-II group have been accepted by the Governing Council in accordance with paragraph 5, or changes in the composition of TLTRO-II groups have taken place in accordance with paragraph 6, unless otherwise decided by the Governing Council, the following shall apply:

[F1 (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-II on the basis of the new composition of its TLTRO-II group only after it has obtained confirmation from its NCB that the new composition of the TLTRO-II group has been recognised; and]

(b) an institution that is no longer a member of a TLTRO-II group shall not participate in any further TLTRO-II either individually or as member of another TLTRO-II 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-II group shall no longer be recognised and such lead institution shall be obliged to repay all amounts borrowed under TLTROs-II.

Textual Amendments

F1 Substituted by Decision (EU) 2016/1974 of the European Central Bank of 31 October 2016 amending Decision (EU) 2016/810 (ECB/2016/10) on a second series of targeted longer-term refinancing operations (ECB/2016/30).

(1)

Regulation (EC) No 1745/2003 of the European Central Bank of 12 September 2003 on the application of minimum reserves (ECB/2003/9) (OJ L 250, 2.10.2003, p. 10).