Article 2

Directive 89/647/EEC is amended as follows: 1. Article 2 shall be amended as follows: In paragraph (1) the following indent shall be added: function regularly, have rules, issued or approved by the appropriate authorities of the home country of the exchange, which define the conditions for the operation of the exchange, the conditions for access to the exchange as well as the conditions that must be satisfied by a contract before it can effectively be dealt on the exchange, have a clearing mechanism that provides for contracts listed in Annex III to be subject to daily margin requirements providing an appropriate protection in the opinion of the competent authorities.` '- "recognised exchanges" shall mean exchanges recognised by the competent authorities which: In paragraph (2) the following subparagraph shall be added: 'The competent authorities may also include within the concept of regional governments and local authorities, churches and religious communities constituted in the form of a legal person under public law, in so far as they raise taxes in accordance with legislation conferring on them the right to do so. However, in this case the option set out in Article 7 shall not apply`. 2. In Article 5(3), the first sentence shall be replaced by the following: '3. In the case of the off-balance-sheet items referred to in Article 6(3), the potential costs of replacing contracts in the event of counterparty default shall be calculated by means of one of the two methods set out in Annex II`. 3. Article 6 shall be amended as follows: In paragraph (2) the following sentence shall be added: 'The portion of unpaid capital subscribed to the European Investment Fund may be weighted at 20 %`. Paragraph (3) shall be replaced by the following: contracts traded on recognised exchanges, foreign-exchange contracts (except contracts concerning gold) with an original maturity of 14 calendar days or less. '3. The methods set out in Annex II shall be applied to the off-balance-sheet items listed in Annex III except for: Until 31 December 2006, the competent authorities of Member States may exempt from the application of the methods set out in Annex II over-the-counter (OTC) contracts cleared by a clearing house where the latter acts as the legal counterparty and all participants fully collateralise on a daily basis the exposure they present to the clearing house, thereby providing a protection covering both the current exposure and the potential future exposure. The competent authorities must be satisfied that the posted collateral gives the same level of protection as collateral which complies with paragraph 1(a)(7) and that the risk of a build-up of the clearing house's exposures beyond the market value of posted collateral is eliminated. Member States shall inform the Commission of the use they make of this option`. In paragraph (4) the following subparagraph shall be added: 'The Member States may apply a 50 % weighting to off-balance-sheet items which are sureties or guarantees having the character of credit substitutes and which are fully guaranteed, to the satisfaction of the competent authorities, by mortgages meeting the conditions set out in paragraph (1)(c)(1), subject to the guarantor having a direct right to such collateral`. 4. Article 7 shall be amended as follows: in paragraph (1) the following shall be added after the words 'local authorities`: 'or secured, to the satisfaction of the competent authorities concerned, by collateral in the form of securities issued by those regional governments or local authorities`; in paragraph (2) the following shall be added after the words 'the latter`: ', including collateral in the form of securities`. 5. Article 8(1) shall be replaced by the following: '1. Without prejudice to Article 7(1) the Member States may apply a weighting of 20 % to asset items which are secured, to the satisfaction of the competent authorities concerned, by collateral in the form of securities issued by Zone A regional governments or local authorities, by deposits placed with Zone A credit institutions other than the lending institution, or by certificates of deposit or similar instruments issued by such credit institutions`. 6. Annexes II and III shall be amended or replaced in accordance with Parts A and B of the Annex to this Directive.

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Source: EUR-Lex (Cellar) · retrieved 2026-11-05 · Text as adopted (Official Journal); later amendments are not incorporated in this text.