Marketable assets

Eligibility criteria

Changes following the United Kingdom's withdrawal from the EU Changes to the Eurosystem collateral eligibility rules for asset-backed securities (ABSs)

In order to be eligible as collateral for Eurosystem credit operations, marketable assets must comply with the eligibility criteria as laid down in the "General framework" . Additional temporary measures on collateral eligibility are laid down in the “Temporary framework” , and are applicable until further notice.

Changes in collateral eligibility following the United Kingdom's withdrawal from the EU

After the end of the transition period outlined in the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, the following assets no longer meet the eligibility criteria of the current Eurosystem collateral framework:

• unsecured debt instruments issued by credit institutions or investment firms, or by their closely-linked entities, that are established in the United Kingdom (Article 81a of the “General framework”);
• asset-backed securities whose issuer or originator is established in the United Kingdom (Article 74 of the “General framework”);
• asset-backed securities in which the acquisition of the cash-flow generating assets by the SPV is governed by UK law (Article 75 of the “General framework”);
• asset-backed securities in which clawback rules are governed by UK law (Article 76 of the “General framework”);
• assets denominated in pounds sterling, yen or US dollars whose issuer is established in the United Kingdom (Article 7 of the “Temporary framework”);
• assets with guarantees governed by UK law or where the guarantor is established in the United Kingdom, unless the guarantee is not needed to establish the credit quality requirements for the specific debt instrument (Article 114(4) and Article 70 of the “General framework”);
• credit claims for which the facility agent is a credit institution located in the United Kingdom (Article 104(4) of the “General framework”).

Based on the United Kingdom’s status as a non-EEA G10 country, euro-denominated debt instruments issued by entities established in the United Kingdom, but which do not fall into the categories listed above, will continue to be accepted as eligible collateral (in line with Article 70 of the “General framework”).

Debt instruments listed on the London Stock Exchange must also be admitted to trading on at least one acceptable market as defined by Article 68(1) of the “General framework” in order to remain eligible for collateral purposes, provided all other eligibility criteria are met.

The above list of criteria is non-exhaustive and highlights only the most common features.

Changes to the Eurosystem collateral eligibility rules for asset-backed securities (ABSs)

In relation to changes to the Eurosystem collateral eligibility rules for ABSs, the Governing Council decided that cash-flow generating assets of ABSs will be required to entail full recourse against the obligors.

This change in eligibility requirements for ABSs will be implemented on the occasion of the next regular update of Guideline ECB/2014/60.

Eligibility assessment procedure

Proactive assessment by NCBs once the asset is issued

Prior to the publication on the ECB website in the list of eligible marketable assets, national central banks (NCBs) proactively assess the eligibility of the marketable assets. The NCB of the country where the asset is admitted to trading on a regulated market or traded on a non-regulated market is responsible for the assessment of the eligibility of the marketable asset.

The eligibility assessment process only begins once the asset is issued and all the necessary documentation mentioned below is available to the respective NCB. Both NCBs and ECB do not confirm the eligibility of an asset prior to its issuance.

Once the assessment procedure is completed, the marketable asset will be included in the list of eligible marketable assets provided it complies with the ECB’s eligibility criteria.

In case a marketable asset does not appear on the list of eligible marketable assets, but you believe it should be there, please contact the national central bank of the country in which the asset is admitted to trading on a or traded on an acceptable non-regulated market. In this case, the following information could be provided to the responsible NCB in order to facilitate the assessment procedure:

• Letters of rating from the rating agencies,
• Rating agencies pre-sale reports (not the rating agencies web pages),
• Final offering circulars for the transaction,
• ISIN codes of the security, Reuters/Bloomberg page codes,
• Confirmation of New Global Note (NGN) form, if applicable. ⁽¹⁾

⁽¹⁾ The NGN criterion only applies to international debt instruments in global bearer which are issued through the ICSD’s with XS ISIN codes. The NGN requirement does not pertain to domestic securities issued through domestic CSD’s or individual bearer or global registered international securities.

Acceptable markets

One eligibility criterion for marketable assets is that the debt instrument must be admitted to trading on a regulated market as defined in the Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, or traded on certain non-regulated markets specified by the ECB.

Regulated markets

The European Securities and Markets Authority (ESMA) maintains a list of regulated markets which can be accessed under registers.esma.europa.eu.

Non-regulated markets

The assessment of non-regulated markets is made by the Eurosystem and is based on three principles: safety, transparency, and accessibility.

The three principles are defined by the Eurosystem exclusively in terms of the performance of the Eurosystem’s collateral management function. The selection process is not aimed at assessing the intrinsic quality of the various markets.

• Safety is taken to mean certainty with regard to transactions, in particular certainty on the validity and enforceability of transactions.
• Transparency is taken to mean unimpeded access to information on the market’s rules of procedure and operation, the financial features of the assets, the price formation mechanism, and the relevant prices and quantities (quotes, interest rates, trading volumes, outstanding amounts, etc.).
• Accessibility refers to the Eurosystem’s ability to take part in and have access to the market; a market is accessible for collateral management purposes if its rules of procedure and operation allow the Eurosystem to obtain information and conduct transactions when needed for these purposes. The current list of non-regulated markets which are deemed to comply with these three principles are listed in the table below.

Recognised agencies

Recognised supranational issuers

Updated: 10 January 2020

• African Development Bank
• Asian Development Bank
• Asian Infrastructure Investment Bank
• Bank for International Settlements
• Caribbean Development Bank
• Council of Europe Development Bank
• European Atomic Energy Community
• European Bank for Reconstruction and Development
• European Financial Stability Facility
• European Investment Bank
• European Investment Fund
• European Stability Mechanism
• European Union
• Inter-American Development Bank
• International Bank for Reconstruction and Development
• International Development Association
• International Finance Corporation
• International Finance Facility for Immunisation
• International Monetary Fund
• Islamic Development Bank
• Multilateral Investment Guarantee Agency
• Nordic Investment Bank