Regulation (EU) No 575/2013 states that equities or convertible bonds included in a main index may be used by institutions as eligible collateral. One of the eligibility criteria for collateral is that it should be sufficiently liquid. To be considered as main indices for the purposes of that Regulation, equity indices should therefore mainly consist of equities that can reasonably be expected to be realisable when an institution needs to liquidate them. This should be the case when at least 90 % of the components of an index have a free float of at least EUR 500 000 000 or, in the absence of information about free float, a market capitalisation of at least EUR 1 000 000 000.

It should also be possible for institutions to recognise as eligible collateral instruments that are liquid relative to the markets in which they are operating and meet a minimum level of liquidity, irrespective of whether a market is established in the Union or in a third country. Therefore, an equity index should be considered as a main index where it includes no more than half of the total number of companies whose shares are traded on the market on which the index is based, where the average daily turnover is at least EUR 100 000, and where it also meets two of the following three criteria: the total market capitalisation of the index is at least 40 % of the market capitalisation of all the companies whose shares are traded on that market; the total turnover of trading in the components of the index is at least 40 % of the total turnover of all equity trading on that market; and the index serves as an underlying for derivatives products.

Convertible bond indices should be considered as main indices only where the constituent bonds can be converted into equities where at least 90 % of those equities have a free float of at least EUR 500 000 000 or, in the absence of information about free float, a market capitalisation of at least EUR 1 000 000 000.

Where two indices meet the criteria to be considered a main index and one is a subset of the other, for simplicity only the broader one should be included in the list of main indices.

Regulation (EU) No 575/2013 states that debt securities issued by certain institutions, not having a credit assessment by an external credit assessment institution (ECAI) may be used as eligible collateral where they fulfil a number of conditions, one of them being that they are listed on a recognised exchange.

This Regulation is based on the draft implementing technical standards submitted by the European Securities and Markets Authority (ESMA) to the Commission.

On 17 December 2015, the Commission notified ESMA of its intention to endorse the draft implementing technical standard with amendments to take account of the fact that some equity indices that meet the eligibility criteria to be considered as main indices were not included in the list provided in that draft standard. In its formal opinion of 28 January 2016, ESMA confirmed its initial position and did not resubmit an implementing technical standard amended in a way consistent with the Commission's proposed amendments. The draft implementing technical standard should therefore be endorsed with the amendments necessary to avoid the exclusion of indices that meet the eligibility criteria to be considered as main indices for the purposes of Regulation (EU) No 575/2013.