Guideline (EU) 2021/565 of the European Central Bank of 17 March 2021 amending Guideline (EU) 2019/1265 on the euro short-term rate (€STR) (ECB/2021/10)

• Celex Number: 32021O0565
• Published date: 07 April 2021
• Date: 17 March 2021
• Date of Signature: 17 March 2021
• Official Gazette Publication: Official Journal of the European Union, L 119, 7 April 2021

7.4.2021 EN Official Journal of the European Union L 119/128

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GUIDELINE (EU) 2021/565 OF THE EUROPEAN CENTRAL BANK

of 17 March 2021

amending Guideline (EU) 2019/1265 on the euro short-term rate (€STR) (ECB/2021/10)

THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 127(2) and (5) thereof,

Having regard to the Statute of the European System of Central Banks and of the European Central Bank, and in particular Article 12.1 and 14.3 thereof,

Whereas:

(1) Regulation (EU) 2016/1011 of the European Parliament and of the Council (1) necessitates the adoption of robust fallback provisions in a large number of financial contracts and instruments. In the absence of such fallback provisions, the possible discontinuation in the future of a critical benchmark, such as Euribor, may have serious repercussions for the functioning of markets and, as a result, for the implementation of monetary policy. These repercussions could include the inability of market participants to value balance sheet positions, the frustration of a significant number of contracts, and disruption in certain markets – including lending markets – which are important for the Eurosystem’s monetary policy. Overnight rates compounded in arrears are one viable fallback option that is recommended by the Financial Stability Board and market participants support the introduction of such rates. The publication by the European Central Bank (ECB) of compounded rates based on historical euro short-term rate (€STR) values would thus contribute to mitigating systemic risk in scenarios of benchmark discontinuation, whilst promoting a wider use of the €STR and fostering consistency across major currency areas in the fall back options available to market participants.

(2) The tasks and responsibilities of the ECB provided for in Guideline (EU) 2019/1265 of the European Central Bank (ECB/2019/19) (2) should be updated to include the calculation and publication of compounded rates.

(3) To enhance its clarity, the framework for the consultation of stakeholders provided for in Article 14 of Guideline (EU) 2019/1265 (ECB/2019/19) should be updated.

(4) Therefore, Guideline (EU) 2019/1265 (ECB/2019/19) should be amended accordingly,

HAS ADOPTED THIS GUIDELINE:

Article 1

Amendments

Guideline (EU) 2019/1265 (ECB/2019/19) is amended as follows:

1. Article 1 is replaced by the following: ‘Article 1 Subject matter 1. This Guideline governs the euro short-term rate and establishes the ECB’s responsibility for its administration and the oversight of the euro short-term rate determination process. The Guideline also establishes the tasks and responsibilities of the ECB and the NCBs with respect to their contribution to the euro short-term rate determination process and other business procedures. 2. This Guideline governs also the calculation and publication of the compounded euro short-term rate average rates and the compounded euro short-term rate index.’;

2. Article 2 is amended as follows: (a) point (15) is replaced by the following: ‘(15) “stakeholders” means reporting agents, users of the euro short-term rate, users of the compounded euro short-term rate average rates and/or users of the compounded euro short-term rate index;’; (b) point (24) is replaced by the following: ‘(24) “material change” means a change to the euro short-term rate methodology, to the euro short-term rate determination process, or to the calculation and publication rules of the compounded euro short-term rate average rates and/or the compounded euro short-term rate index (including a decision to cease the publication of either or both of them) which could have an

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