New Safekeeping Structure

Following a recommendation by the Eurosystem concerning the custody structure of international debt securities in global registered form, the International Central Securities Depositories (the ICSDs), Euroclear Bank and Clearstream Banking Luxembourg, will implement on 30 June 2010 a New Safekeeping Structure (NSS).

The NSS will be mandatory for newly issued international debt security in registered form to be recognised as potentially eligible collateral for Eurosystem monetary policy and intra-day credit operations as of 1 October 2010.

The Eurosystem has however decided to withdraw collateral eligibility of the international debt securities in individual form (securities represented by definitive certificates and issued in bearer form) as of 1 October 2010. Securities in individual note form issued in the existing holding structure before 1 October 2010 will however remain eligible as collateral for Eurosystem monetary policy operations until maturity.

The Frequently Asked Questions provides complementary information on the New Safekeeping Structure and on securities in individual form.

Impacted parties

This information is aimed at all market professionals involved in the issuance and asset servicing of international debt securities deposited with the ICSDs.

Key features of the New Safekeeping Structure (NSS)

• The registered form global notes will be safekept by an ICSD as the Common Safekeeper (CSK) and serviced by a Common Service Provider (CSP),
• Registered securities held under the NSS will have the same legal form as existing Classical Global Notes (CGNs) in registered form. The registrar is the legal record keeper.
• The registered owner will be a nominee of the ICSD CSK.

ICSDs eligibility criteria to safekeep registered form CGNs in the NSS

• The note is issued by an entity resident in a European Economic Area (EEA) or G-10 country, or by a supranational entity,
• The note is denominated in an ECB eligible currency,
• The issue documentation indicates that the security is to be held in a manner that would allow it to be eligible as collateral for Eurosystem intra-day credit and monetary policy operations.

Documents required by the ICSDs for the NSS

The issuer’s agent shall provide the ICSDs with:

• An Issuer-ICSDs Agreement (Document for stand-alone issues or for programme issues should be collected as appropriate),
• An Effectuation and Disposal Authorisation (Document for stand-alone issues or for programme issues should be collected as appropriate),
• an Effectuation Instruction,
• and a CSK election form.

These templates are applicable for both NGNs and registered form securities held under the NSS and are effective as of 30 June 2010.