Short Term Securities

1
Short Term Securities

• Summary of answers to ECSDA questionnaire

2
Background

• Development of European money markets (domestic
  markets and the international market)
• Demand for a harmonized short term euro
  denominated market
• Euribor / ACI consultation (STEP Task force)

3
ECSDA questionnaire

• Aim
• identify
• if and how European CSDs process Short term
  Securities (STS)
• the potential needs of harmonisation or gaps for
  a single STS Euro denominated market
• Questionnaire sent on October 2002
• 11 answers received
• analysis done on the basis of the 10 CSDs which
  accept such securities to their operations

4
List of CSDs

• SCLV
• OeKB
• Euroclear Bank
• Crest
• Euroclear France

• Cleasrteam Banking Luxembourg
• Clearstream Banking Frankfurt
• Monte Titoli
• Interbolsa
• VPC
• VP

Questionnaire relates to CSDs activity (no
Central Banks answers)
5
Topics covered

• Kinds of securities accepted, form and
  outstandings
• Issuance process (ability to offer same day
  issuance)
• Collateral usage
• Projects

6
Definition of STS

• Security with a short maturity what is the
  limit, 1,2 years ?
• Type of issuer corporate, bank,... including
  Treasuries ?
• Legal status monetary instruments, debt
  securities, notes ?
• Situations vary from country to country
• Global approach taken in the analysis

7
A great variety of instruments

• Treasury bills
• Bubills (CBF)
• Treasury Bills (Crest, Euroclear Bank)
• Bons du Trésor Français (Euroclear France)
• Austrian Treasury Bills (OeKB)
• DI SSVX (VPC)
• Notes
• Asset backed
• Pagares titulizados (SCLV)
• DI BOC (VPC)
• Local administrations
• Local Authorities Bills (Crest)
• DI FC (municipal) (VPC)
• DI LC (county council) (VPC)

• Corporate STS
• Commercial Paper
• Pagares (SCLV)
• Billets de trésorerie (Euroclear France)
• Euro Commercial Paper
• Bank STS
• Certificates of Deposit
• Bank bills (Crest)
• Euro-Certificates of Deposit
• Certificats de Dépôt (Euroclear France)
• Certificato di Deposito (Monte Titoli)
• DI BAC (VPC)
• Financial Paper (CBF)

8
Role of CSDs
9
Outstanding amounts per CSD
10
Form of securitiesMost Common
Representation
Legal form
Future form of Money Market Instruments (MMIs)
in Crest after their migration in 2003
11
Issuance process
Special process dedicated for STS ?
Who is the agent ?
Issuance under program
12
Code allocation
Who allocates ?
What codes ?
Special code allocation process?
Crest Isin only after CMO migration
13
Same day issuance
Best CSD capability
Usual issuance deadline
L launch date
Same day deadlines range from 1030 to 530
14
Eligibility as collateral
Eligibility for monetary operations with NCB
Eligibility in the settlement process
Eligibility may depend on The instrument Treasur
y Bills Billets de Trésorerie (France) The
acceptance as such by the ECB
Same conditions as for operations with NCB except
if - The CSD does not use securities as
collateral in the settlement process - The CSD
operates in Commercial Bank money
15
Listing of STS
STS may be listed in - Austria (Vienna Stock
Exchange for Treasury Bills) - Spain (AIAF) -
Denmark (project) In France no listing but
market information provided by NCB
16
Conclusion

• First analysis to be completed (cross border
  settlement, information, Central Banks acting as
  SSS,...)
• Various situations in Europe but convergence in
• the way STS are issued
• the light form of those instruments
• the trend to reach same day issuance
• Need of a more formal definition of STS to allow
  straight comparisons
• Need of common criteria for the eligibility of
  those instruments as collateral