Admission criteria and default rules
In order to be eligible to participate in the EURO1 system, a bank has to fulfil certain legal, financial and operational criteria.
A bank has to:
- Be authorised to conduct banking business
- Have its registered office in a member state of the EU or in an OECD country
- Participate in the EURO1 system from its registered address or a branch located in the EU
- Provide a capacity opinion
- Not be a member of the same group as an existing EURO1 Participant (for Pre-fund Participants the requirement is to be a member of the same bank group as a EURO1 Participant)
In addition, the laws of all the jurisdictions from where a participating bank accesses the system must recognise the Single Obligation Structure, which forms the legal basis of the system.
Financial criteria (applying upon admission)
A bank has to:
- Have own funds of at least EUR 1.25 billion
- Have a short-term credit rating of at least P2 (Moody’s) or A2 (S&P), or equivalent
A bank has to:
- Have direct access to TARGET2
- Have adequate technical and operational facilities, including back-up facilities, and staffing for the purposes of participation in the system
Future change dates
The following dates are agreed with SWIFT for changes to EURO1 provisioning. This includes the connection of new participants to the systems and the addition of sub-participants as sub-addresses.
- 8 January 2018
- 5 February 2018
- 5 March 2018
- 9 April 2018
- 7 May 2018
- 4 June 2018
- 9 July 2018
- 6 August 2018
- 3 September 2018
- 8 October 2018
- 5 November 2018
- 3 December 2018
Please note that there will be a freeze period from 15 December 2017 to 12 January 2018.
A participant in EURO1 may voluntarily withdraw from the system upon at least 30 days’ notice.
A participant can be prevented by the System Operator from continuing to participate in the system if certain events occur:
Failure to comply with the operational and legal criteria for participation and failure to pay or replenish when due settlement related obligations constitute suspension events.
Where relevant, an inquiry notice is sent to the participant to confirm the occurrence of a suspension event.
Participants must remedy the cause of a suspension event. An appeals procedure is in place in case the System Operator denies to terminate a suspension.
Events that may give rise to exclusion comprise in particular
- confirmed insolvency events
- loss or authorisation to conduct banking business
- unremedied suspension
Payment messages to and from a participant that is suspended or excluded will not be processed for the duration of a suspension, respectively as from the moment of exclusion.
The occurrence of a suspension or exclusion event and the consequences thereof for the suspended / excluded participant and for the other participants are determined solely in accordance with the terms and conditions set forth in the rules governing the system. The systems’ rules are proprietary and confidential, and are available to all participants, to prospective participants that have applied for becoming a participant, and to relevant authorities including in particular the European Central Bank / Eurosystem as overseer of EURO1.
Section 5 of the EURO1 PFMI Disclosure Report elaborates on the use of the liquidity pool in case of a financial default of one or more Participants.
For information on the EURO1 pricing, please click here.