Agreement on Account Management, Settlement and Collateralisation between... (name of the Bank) and. For Norges Bank

Transcription

1 Page 1 of 13 Agreement on Account Management, Settlement and Collateralisation between. (name of the Bank) and Norges Bank Type of account (please mark one): Ordinary account Contingency account Oslo, date... Place and date For the Bank For Norges Bank......

2 Page 2 of 13 I Introductory provisions 1. Scope of the agreement The agreement applies to the establishment and use of the accounts which the Account Holder (the Bank) has or may establish in Norges Bank and the payment settlements in which the Bank participates at any time. Furthermore, the agreement applies to any assets provided by the Bank as collateral for its loans at the central bank, Norges Bank s rights to perform close-out netting of accounts and to realise securities pledged as collateral for loans. The bank may choose between an ordinary account or a contingency account. If an ordinary account is chosen, all provisions in the agreement, except Sections 4 and 33, will apply. If a contingency account agreement is chosen, all provisions, except Sections 3 and 8, will apply. If the Bank requests to change its type of account, a new agreement is entered into by submitting a new front page of the agreement to Norges Bank where the requested type of account is marked. The front page must be signed by a person authorised by the Bank to do so. 2. Definitions Bank means a commercial or savings bank with its head office resident in Norway, a subsidiary in Norway of a bank and a credit institution with its head office resident in another state and a bank and a credit institution with its head office resident in another state that is entitled to market and provide services in Norway (cross-border services). Cash account means a separate deposit account that is credited by disbursements in connection with maturity, instalments or redemption of securities collateralised in favour of Norges Bank. Deposits in this account may be used as collateral in favour of Norges Bank. Clearing means the calculation of net payments on the basis of multiple gross payments. Clearing system means a system that calculates net payment positions. Collateral means assets that banks have pledged as collateral for loans in Norges Bank pursuant to the Regulation on the access of banks to borrowing and deposit facilities at Norges Bank etc. Collateral account means deposits in a non-interest bearing account with Danmarks Nationalbank, Sveriges Riksbank and/or Norges Bank that the Bank has pledged as collateral for its own or another bank s borrowing at Norges Bank or at one of the two other central banks pursuant to the agreement on the Scandinavian Cash Pool (SCP). Gross settlement means settlement of individual payment orders between two banks or between a bank and Norges Bank. NBO (Norges Bank s settlement system) means Norges Bank s electronic system and rules, routines and procedures for settling payment orders between banks or between a bank and Norges Bank.

3 Page 3 of 13 NBO LOM account (Liquidity Optimization Mechanism) means secondary account under the primary account over which the Bank has the right of disposal. NBO Online means Norges Banks screen based information and transaction system for the banks access to NBO. Net settlement means the settlement of a clearing received from a clearing system. NICS (Norwegian Interbank Clearing System) means the banks system for clearing of payment orders. Notification in writing means a letter, SWIFT message, message with test numbers in the form of a telefax, or message sent via the messaging system of the Norwegian Central Securities Depository (VPS). Operating schedule means the NBO opening and closing times and deadlines for the settlement of payments. Operator of an interbank system means an institution responsible for the operations of a clearing system or settlement system. Payment order means an order from account holders to execute payments and the account holders deposit or withdrawal of cash. Primary account means the Bank s account in NBO on which the Bank s loans or deposits will be registered overnight. Realisation means selling collateralised securities and taking possession of deposits in a collateral account. Rejected payment order means that a payment order, which does not have sufficient funds, is cancelled by Norges Bank. Scandinavian Cash Pool (SCP) means the agreement whereby Danmarks Nationalbank, Sveriges Riksbank and Norges Bank grant loans to banks against collateral deposited in each bank s collateral account at one of the other two central banks. Settlement means the final transfer of funds between the accounts of participants in NBO. Settlement account means the primary account and one or more secondary accounts (LOM accounts) in NBO which are used to settle payment orders and over which the Bank has the right of disposal. Settlement day means the business day on which a payment order is executed. Settlement days are weekdays from Monday to Friday, with the exception of public holidays and Christmas Eve. For each year the settlement days are published on Norges Bank s website. Settlement system means a system which is used for settlement of payment orders between participants in the system. Sufficient funds mean that deposits and borrowing access are sufficient to execute a payment order by debiting the account that is specified in the payment order. In the

4 Page 4 of 13 primary account, sufficient funds can be in the form of deposits and access to loans, while sufficient funds in a NBO LOM account must be in the form of deposits only. II Execution of payment orders, access to account, deadlines and payment limits etc. 3. Right of disposal over ordinary account The Bank disposes over its accounts in Norges Bank by using NBO Online or sending SWIFT messages. In contingency situations and by specific agreement with Norges Bank, the Bank may access its accounts by the use of telefax. The Bank is responsible for ensuring that employees who register payment orders in NBO on behalf of the Bank have undergone the necessary training to use the system, including rules for using NBO Online. 4. Right of disposal over contingency account Norges Bank decides how the Bank may dispose over its contingency account from the time the account is activated until such time as an ordinary account may be established, cf. Section Delivery of payment orders and participation in settlement The Bank shall state the settlement day and may state the settlement time for payment orders. Payment orders which are to be settled on the same day must be received by NBO by the deadline stated in the operating schedule for NBO. The Bank shall inform Norges Bank of which clearings it requests to be settled on its accounts in NBO. The Bank must notify Norges Bank of any changes in its participation in net settlements at the latest one (1) week before the change becomes effective. The one week s notice of changes in participation in net settlements does not apply to contingency situations where the swift change of settlement bank is crucial. In such situations the Bank may participate in net settlements as soon as operational factors permit. 6. Operating schedule for NBO Norges Bank determines the operating schedule for NBO. Norges Bank may amend the operating schedule with one (1) month s notice. The operating schedule and amendments to it are notified by circular. 7. Duty to provide information and duty of confidentiality Norges Bank shall notify the Bank through NBO Online of payment orders settled on the Bank s accounts. Account statements are made available for each account through NBO Online. Norges Bank may also send notification of settlements and account statements via SWIFT. Employees at the Bank and at Norges Bank have a duty of confidentiality with regard to information they acquire via account management in Norges Bank concerning others

5 Page 5 of 13 business or personal affairs, unless otherwise specified in legislation. This also applies to others who provide services for one of the parties to the agreement. The parties to the agreement are obliged to inform everyone involved about the duty of confidentiality. The duty of confidentiality in accordance with this agreement or in accordance with the statutory duty of confidentiality does not prevent the parties from providing information which is considered necessary for Norges Bank to be able to perform its tasks as a central bank. The duty of confidentiality does not prevent Norges Bank from providing information about balances on the VPO LOM accounts to the Norwegian Central Securities Depository (VPS) or from notifying the VPS about amendments in Norges Bank s agreements with the banks. If one or more participants have insufficient funds for its net settlement position to be settled in NBO, Norges Bank may inform the operator of the clearing system of which banks that have insufficient funds. Norges Bank may also pass on information to an operator of a clearing system about termination, suspension and restrictions on access to loans in addition to termination of account. 8. Security requirements when using NBO Online The Bank shall assign security officer(s) who will be contact person(s) for Norges Bank regarding NBO Online. The Bank shall assign and authorise persons who will have access to NBO Online. The Bank shall report new users of NBO Online to Norges Bank and grant each user their rights. The Bank shall also report to Norges Bank the names of persons that are no longer users. The Bank is responsible for ensuring that each user handles his or her authentication data (log-in information and code) in a secure way. The Bank is responsible for ensuring that any equipment used to access NBO Online is secured at all times in line with the Financial Supervisory Authority of Norway s ICT regulation (Finanstilsynets forskrift om bruk av informasjons- og kommunikasjonsteknologi (IKT)). 9. Requirements for sufficient funds, prioritising settlements and rejection of payment orders If the Bank has not specified another settlement time, Norges Bank will settle the payment order in the Bank s accounts in NBO in the order in which they are received. Norges Bank can decide upon changes in the rules for settling payment orders held in a queue due to insufficient funds. Prior to Norges Bank deciding upon such changes, the changes will be discussed with the operators responsible for the interbank or securities settlement systems involved. The Bank shall be notified at least one (1) month before the change takes effect. In the event of insufficient funds in a NBO LOM account, the following priorities apply to the settlement of payment orders: i. Interest on overnight loans (D-loans) and settlement of foreign exchange transactions

6 Page 6 of 13 ii. iii. Clearing results from NICS and Oslo Clearing ASA Gross payment orders sent by the Bank and payment orders sent by Norges Bank except interest on overnight loans (D-loans) and settlement of foreign exchange transactions. The Bank may give priority to one gross payment order over another gross payment order in a queue, but may not give priority to a gross payment order over a clearing result in a queue. The Bank shall have sufficient funds for its commitments within the time limits set forth in the NBO operating schedule. Net settlements and gross settlements that are to be debited a NBO LOM account will be rejected in the event of insufficient funds at the times specified in the operating schedule. Payment orders to be debited the primary account will be rejected immediately in the event of insufficient funds. Norges Bank may reject a clearing result without sufficient funds in the NBO if requested to do so by the operator of the clearing system. This applies even if the time limits in the operating schedule have not been exceeded. Norges Bank may settle a clearing result to replace the cancelled clearing result by agreement with the clearing system operator. 10. Special agreement on legal protection and security The Bank and Norges Bank may agree on that payment orders from the Bank shall be executed even if insolvency proceedings of the Bank have been opened, provided that the payment orders were registered in NBO before the opening of the insolvency proceedings, cf. the Payment Systems Act, Section 4-2. Norges Bank and the Bank may also enter into a special agreement to secure the execution of net settlements. Such security cannot be reversed pursuant to the Norwegian Creditors Recovery act, Section 5-7, cf. the Payment Systems Act, Section Execution of securities settlement If the Bank participates in securities settlements (VPO), the Bank shall, prior to each clearing, transfer funds to its own VPO LOM account within the time limits specified in the NBO operating schedule. The Bank does not have these funds at its own disposal within the time frames specified in the operating schedule. The payment part of the securities settlement takes place when Norges Bank debits or credits each bank s VPO LOM account by an amount corresponding to the Bank s position in the clearing that Norges Bank receives from the Norwegian Central Securities Depository (VPS), cf. also Section 12 of this agreement. The execution of the securities settlement depends on each bank having sufficient funds in the form of deposits on its VPO LOM account. 12. Right to debit and credit accounts Norges Bank has the right to debit the Bank s accounts on the basis of payment orders that are received in accordance with this agreement. The same applies to claims that Norges Bank has against the Bank as a consequence of the Bank s loans at Norges Bank and its participation in NBO.

7 Page 7 of Final settlement right to recall The settlement of a payment order is final when it has been debited or credited to one of the Bank s accounts in NBO. Norges Bank, the Bank or a third party may not recall the payment order after this time. Nevertheless, Norges Bank may make corrections in accordance with the provisions in Section 28 of this agreement. III PRICES FOR ACCOUNT MANAGEMENT, SETTLEMENT AND COLLATERALISATION FOR LOANS AT NORGES BANK 14. Prices The Bank shall pay for account management, participation in payment settlements and collateralisation for loans in accordance with prices that are determined by Norges Bank. The prices for each calendar year and the terms of payment are published by circular from Norges Bank at least two (2) months before the beginning of the year the prices apply. 15. Coverage of Norges Bank s costs related to securities depositories Costs related to the Bank s collateralisation in securities depositories shall be borne by the Bank. If such costs are charged to Norges Bank, Norges Bank will invoice the Bank accordingly. IV COLLATERAL FOR LOANS AT NORGES BANK 16. Introductory provisions The Bank s access to loans in Norges Bank is regulated in the Regulation on the access of banks to borrowing and deposit facilities in Norges Bank etc. and in more detailed guidelines given in accordance with the regulation and with provisions given in this chapter. If the Bank participates in the SCP scheme, the access to loans against collateral is also regulated in the Agreement concerning financial collateralisation for other bank s loans at Norges Bank. Norges Bank may decide that securities have no borrowing value in a given period prior to maturity or redemption. The Bank shall ensure that securities collateralised in favour of Norges Bank are not utilised in this period. More detailed rules in this regard will be published by circular from Norges Bank. Norges Bank may require the Bank to increase its collateral if the value of the Bank s loans and accrued interest exceeds the borrowing value of the collateralised securities. In such cases Norges Bank may also claim the Bank s ordinary deposits at Norges Bank as collateral. Banks with contingency account agreement may put up collateral for loans at Norges Bank. The collateral will not give access to loans at Norges Bank until the contingency account is activated.

8 Page 8 of The size of the claim on collateral Norges Bank s maximum claim against the Bank within this agreement amounts to NOK. This provision does not apply when the Bank s loans are secured by collateral in the form of deposits in another central bank (SCP scheme) or by deposits at Norges Bank. 18. Declaration of collateral The Bank accepts that its collateral, including funds that are disbursed at maturity, instalment or redemption of collateralised securities, is to be utilised as collateral for Norges Bank s present and future claims for repayment of principal, interest, interest on overdue payments, fees and costs related to the realisation of the collateral. 19. The Bank s right of disposal Assets which the Bank has collateralised for loans at Norges Bank cannot be utilised as collateral in relation to a third party. Furthermore, the Bank does not have the right of disposal of the collateral without written consent from Norges Bank. 20. Norges Bank s right of disposal Norges Bank may only utilise the collateral to cover the claims specified in Section 18. The collateral shall be realised in accordance with the conditions in Sections Instalment and maturity Disbursements in connection with maturity, instalments or redemption of securities pledged as collateral for loans at Norges Bank are included in Norges Bank s security interest and shall be credited an account decided by Norges Bank. 22. Interest The Bank has the right of disposal over interest disbursed on collateralised securities. 23. Breach of contract and public administration, etc Within the scope of this agreement, Norges Bank has the right to recover any claims against the bank by close-out netting and to take possession of and realise the collateral in full or in part if a) the Bank defaults on its obligations to Norges Bank on repayment of loans or payment of interest on loans b) the Bank defaults on its obligations to Norges Bank to put up additional collateral if the sum of loans and accrued interest exceeds the borrowing value of the collateral c) the Bank is placed under public administration or bankruptcy proceedings have been initiated with the Bank, or

9 Page 9 of 13 d) Norges Bank has decided to suspend or limit the Bank s access to loans at Norges Bank under the provisions of the Regulation on the access of banks to borrowing and deposit facilities in Norges Bank etc. 24. Close-out netting If at least one of the conditions in Section 23 is present, Norges Bank can cover its claims against the Bank in accordance with this agreement by netting against the Bank s deposits in Norges Bank, including ordinary deposits and deposits with fixed terms (F-deposits). If the Bank participates in the SCP scheme, Norges Bank may also cover its claims against deposits placed as collateral for loans in Norges Bank at Sveriges Riksbank and/or Danmarks Nationalbank. Norges Bank does not have the right to net against the Bank s deposits in a collateral account in Norges Bank that are pledged as collateral for loans at Danmarks Nationalbank and/or Sveriges Riksbank. 25. Invalidation of collateral Deposits in the Bank s accounts and the Bank s collateral for loans at Norges Bank may not be reversed pursuant to the Norwegian Creditors Recovery Act Section 5-7, cf. the Payment Systems Act Section 4-4 and the Financial Collateral Act Section Realisation of collateral, etc If at least one of the conditions in Section 23 is present, Norges Bank has the right immediately and without further consent from the Bank to realise collateral registered at Norwegian or foreign central securities depository and collateralised deposits at Danmarks Nationalbank and/or Sveriges Riksbank. The collateral shall be utilised to cover claims that are mentioned in Section 18 of this agreement. The determination of values, realisation and, if applicable, close-out settlement between the Bank and Norges Bank shall be executed on commercially reasonable terms. For deposits collateralised abroad the close-out settlement shall be based on the foreign exchange rate obtained from an independent broker at the time of realisation of the collateral. By signing this agreement, the Bank grants Norges Bank the irrevocable authority to give registrars for securities, central securities depository and broker the instructions necessary to realise the collateral. Norges Bank shall notify the Bank or the administrator in bankruptcy before realisation of the collateral. 27. Tax liability and tax reporting etc. The Bank shall, upon request from Norges Bank, fill out documents that Norges Bank receives from foreign securities depository concerning tax liability to other countries, and submit these to Norges Bank. Norges Bank shall send the completed documents to the relevant recipients. Any financial losses inflicted upon the Bank due to the erroneous or insufficient completion of these documents shall be borne by the Bank.

10 Page 10 of 13 V DUTY TO CORRECT AND LIABILITY FOR DAMAGES 28. Correction of incorrect registration If Norges Bank has credited an incorrect account or the correct account by an incorrect amount, Norges Bank may correct the error after informing the Bank provided the correction is executed within the expiration of the third settlement day after the incorrect credit took place. After this deadline, Norges Bank shall obtain written consent from the Bank before a correction is executed. If Norges Bank has debited the Bank s accounts incorrectly, Norges Bank shall correct the mistake without undue delay. 29. Liability for damages Norges Bank is liable for direct losses, for example loss of interest, if Norges Banks executes an incorrect or delayed credit or debit on the Bank s account. Norges Bank s liability for direct losses other than loss of interest, however, does not apply if Norges Bank establishes that the error or delay is due to an obstacle beyond Norges Bank s control and that Norges Bank could not reasonably have been expected to take into account at the time the agreement was signed or avoid or overcome the consequences of at a later time. Exemption from liability applies as long as the obstacles exist. In the event of error due to gross negligence or intent on the part of Norges Bank, Norges Bank is also responsible for indirect losses. 30. Limitation of Norges Bank s liability If the Bank has contributed to the error or delay, Norges Bank s liability pursuant to Section 29 of the agreement may be limited or cease to apply. VI Sanctions 31. Fees Norges Bank may impose a fee on the Bank if it does not have sufficient funds for its payment obligation in the settlement of clearings by the deadlines set in the operational schedule for NBO. Norges Bank may impose a fee on the Bank if it does not repay loans granted within the SCP scheme by the deadline set in the operational schedule of NBO. Norges Bank may impose a fee on the Bank if securities collateralised for loans at Norges Bank are utilised at a time when, pursuant to Section 16, second paragraph, they do not have borrowing value. Norges Bank may change the fees with one (1) month s notice. Changes in fees will be published by circular. Imposed fees will be debited the Bank s account at Norges Bank.

11 Page 11 of 13 VII termination and cancellation 32. Termination and cancellation The agreement may be terminated in full or in part with one (1) month s notice from either of the parties. Termination on the part of Norges Bank shall have reasonable grounds. The Bank shall notify Norges Bank of changes in its legal company structure, mergers or demergers at the latest one (1) month before the change enters into force. Norges Bank may terminate the agreement effective from the date the change enters into force. In the event of a material breach of the agreement, either of the parties may suspend the agreement for a specified period or terminate the agreement with immediate effect. The agreement terminates with immediate effect if the Bank is placed under public administration or enters into insolvency proceedings. This does, however, not apply to provisions in Section 10 concerning special agreement on legal protection and security, and Chapter 4 concerning collateral for loans at Norges Bank. VIII Other provisions 33. Contingency account The Bank may request to have a contingency account in Norges Bank if it does not participate in payment settlements in NBO. The contingency account cannot be used for settlement of payment orders until it has been activated by Norges Bank. Norges Bank may activate the account based on a written request from the Bank. A form concerning a request to activate a contingency account shall be used, cf. attachment. The Bank shall state one of the following two reasons for its request to activate the account: a. The Bank has an immediate need for an account in NBO to settle payments, including participation in settlement of clearings. In such a situation Norges Bank will activate the account immediately b. The Bank wishes to establish an ordinary account in Norges Bank for other reasons than what is mentioned in subsection a. In such a situation Norges Bank will activate the account as soon as possible. As a part of its request to activate its contingency account, the Bank shall attach a short assessment of its liquidity situation. The assessment shall be signed by a person with necessary authority in the Bank. Norges Bank may reject a request for activation of a contingency account on reasonable grounds only. Norges Bank will lay down further provisions on how the Bank may utilise its contingency account including access to account information. At the latest fourteen (14) calendar days after the contingency account has been activated, the Bank shall provide Norges Bank with a written notification whether it will enter into an ordinary account agreement, continue a contingency account agreement

12 Page 12 of 13 or terminate the agreement. If Norges Bank does not receive such a written notification from the Bank, the account will be treated as an ordinary account pursuant to this agreement. 34. Notification to EFTA Norges Bank may provide EFTA s Surveillance Authority with such information about the Bank as is necessary to meet requirements for notification pursuant to Section 4-5 of the Act relating to Payment Systems. 35. Choice of law and dispute resolution The parties rights and obligations according to this agreement are regulated by Norwegian law. In case of discrepancy between the text of this agreement in Norwegian and in English, the agreement text in Norwegian applies. The parties shall attempt to resolve disputes concerning the terms of this agreement by negotiation. If a dispute is not settled within three (3) months, the dispute shall be resolved by an ordinary court of law proceedings. The parties agree to use Oslo as venue. 36. Entry into force This agreement enters into force when it is signed by both parties.

13 Page 13 of 13 Attachment Request for activation of contingency account...(name of the Bank) requests that the Bank s contingency account at Norges Bank is activated with effect from :...(date). The purpose of activating the account is (check one): An immediate need to participate in payment settlements, including net settlements A request to establish an ordinary account at Norges Bank The Bank will participate in the following net settlements in NBO (check off) Settlement of the clearing from NICS (NICS Net) Securities settlement (VPO) The settlement of derivatives (Oslo Clearing) The Norwegian Securities Borrowing and Lending Program Place and date For the Bank