EMS ( European Monetary System ) established in 1979 in accordance with the Resolution of the European Council on the establishment of the EMS and related matters of 5 December 1978 .

Quick tenders are executed within a time frame of one hour and are restricted to a limited set of counterparties .

Such arrangements allow the cross border transfer of eligible securities between systems .

The main components of the EMS were the ECU the exchange rate and intervention mechanism ( ERM )

In order to promote co ordination of the policies of Member States to the full extent needed for the functioning of the internal market , Article 109c of the Treaty lists a set of areas where the Monetary Committee was to contribute to the preparation of the work of the EU Council . At the start of Stage Three of EMU the Monetary Committee was dissolved and the Economic and Financial Committee established .

A securities trade typically results in the delivery of securities ( securities leg ) and the transfer of cash funds ( cash leg ) .

Structural operation an open market operation executed by the Eurosystem mainly in order to adjust the structural liquidity position of the financial sector vis à vis the Eurosystem .

Solvency risk the risk of loss owing to the failure ( bankruptcy ) of an issuer of a financial asset or to the insolvency of the counterparty .

Such management may include transactions with securities , deposit taking , the transfer of profits to the respective government or administrative expenditures .

ECB The implementation of monetary policy in the euro area September 2006 ANNEX 2 Standardised deduction the fixed percentage of the amount outstanding of debt securities with an agreed maturity of up to two years ( including money market paper ) which can be deducted from the reserve base by the issuers which cannot present evidence that such outstanding amount is held by other institutions subject to the minimum reserve system of the Eurosystem , by the ECB or by a national central bank .

Loss sharing rule ( or loss sharing agreement ) an agreement between participants in a transfer system or a clearing house arrangement regarding the allocation of any loss arising when one or more participants fail to fulfil their obligations

The link arrangements between securities settlement systems ( SSSs ) for the transfer of securities currently constitute the only alternative to the CCBM .

As a result there are now eight SSSs in the EU that can be used without preconditions .

The start date corresponds to the purchase date for operations based on repurchase agreements and foreign exchange swaps . Strip ( separate trading of interest and principal ) a zero coupon bond created in order to trade separately the claims on particular cash flows of a security and the principal of the same instrument .

Start date the date on which the first leg of a monetary policy operation is settled . The start date corresponds to the purchase date for operations based on repurchase agreements and foreign exchange swaps .

Settlement agent an institution that manages the settlement process ( e.g. the determination of settlement positions , monitoring the exchange of payments , etc .) for transfer systems or other arrangements that require settlement . Settlement risk a general term used to designate the risk that settlement in a transfer system will not take place as expected .

Reserve base the sum of the balance sheet items ( in particular liabilities ) which constitute the basis for calculating the reserve requirement of a credit institution .

Solvency risk the risk of loss owing to the failure ( bankruptcy ) of an issuer of a financial asset or to the insolvency of the counterparty . Standard tender a tender procedure used by the Eurosystem in its regular open market operations .

Strip ( separate trading of interest and principal ) a zero coupon bond created in order to trade separately the claims on particular cash flows of a security and the principal of the same instrument .

The Eurosystem offers two overnight standing facilities the marginal lending facility and the deposit facility . Start date the date on which the first leg of a monetary policy operation is settled .

Standard tender a tender procedure used by the Eurosystem in its regular open market operations . Standard tenders are carried out within a time frame of 24 hours .

Solvency risk the risk of loss owing to the failure ( bankruptcy ) of an issuer of a financial asset or to the insolvency of the counterparty . Standard tender a tender procedure used by the Eurosystem in its regular open market operations .

New procedures for the transfer of securities used as collateral for Eurosystem credit operations

Link between securities settlement systems procedures and arrangements between securities settlement systems ( SSSs ) for the transfer of securities through a book entry process .

Funds transfer system ( FTS ) a formal arrangement , based on private contract or statute law , with multiple membership , common rules and standardised arrangements , for the transmission and settlement of money obligations arising between the members .

financial infrastructure permits the transfer of payments as well as the trading , clearing and settlement of securities .

Thus , in addition to the correspondent central banking model ( CCBM ) , which was established by the Eurosystem , there are now market alternatives available in some countries for the cross border transfer of collateral .

ELIGIBLE LINKS BETWEEN SECURITIES SETTLEMENT SYSTEMS SSSs can be linked by means of contractual and operational arrangements to allow the crossborder transfer of eligible securities between systems .

Links between securities settlement systems In addition to the CCBM , eligible links between EU SSSs can be used for the cross border transfer of securities .

Settlement date the date on which a transaction is settled . The settlement might take place on the same day as the trade ( same day settlement ) or can occur one or several days after the trade ( the settlement date is specified as the trade date ( T ) the settlement lag ) .

ELIGIBLE LINKS BETWEEN NATIONAL SECURITIES SETTLEMENT SYSTEMS National SSSs can be linked by means of contractual and operational arrangements to allow the cross border transfer of eligible securities between systems .

The Eurosystem offers two overnight standing facilities the marginal lending facility and the deposit facility . Structural operation an open market operation executed by the Eurosystem mainly in order to adjust the structural liquidity position of the financial sector vis à vis the Eurosystem .

6.6.2 LINKS BETWEEN SECURITIES SETTLEMENT SYSTEMS In addition to the CCBM , eligible links between EU SSSs can be used for the cross border transfer of securities .

Assets held through a link can be used for Eurosystem credit operations , as well as for any other purpose selected by the counterparty .

Relayed links between SSSs may also be used for the cross border transfer of securities to the Eurosystem .

Relayed links between SSSs may also be used for the cross border transfer of securities to the Euro system .

Luxembourg Circulation of securities and other financial instruments and the transfer of title by way of security ( amending and completing several other acts ) .

To safeguard the integrity of securities issues and the interests of investors , the CSD should ensure that the issue , holding and transfer of securities are conducted in an adequate and proper manner .

The maintenance period for Eurosystem minimum reserves would be one month , starting on a fixed day of each month ( e.g. the maintenance period may start on the 24th calendar day of each month and end on the 23rd calendar day of the following month ) .

Disruptions in securities settlement systems ( SSSs ) can spread to payment systems owing to the existence of delivery versus payment ( DVP ) mechanisms for the transfer of securities and cash payments .

Start date the date on which the first leg of a monetary policy operation is settled . The start date corresponds to the purchase date for operations based on repurchase agreements and foreign exchange swaps .

The settlement dates for securities and cash to be transferred to the ECB shall be specified by the ECB , and in due course the Bank of Geece shall give instructions for the transfer of the ownership of securities and for the transfer of cash to the ECB on the settlement dates .

Securities settlement system a system which permits the transfer of securities either free of charge or against payment . 1

The transfer of underlying assets is executed either via the counterparties safe custody accounts with national central banks or via their securities settlement accounts with securities settlement systems fulfilling the ECB 's minimum standards ( see Annex 7 ) .

Maintenance periods begin on the settlement day of the first main refinancing operation following the meeting of the Governing Council at which the monthly assessment of the monetary policy stance is pre scheduled .