Range of services

All services are fully supported by extensive reporting, with all movements on accounts in both cash and securities being reported to customers in line with general market standards. Customised reporting may also be provided if required. The services include: Securities services, Automatic overnight investment facility, Fixed-term deposit services, Foreign exchange operations, Executing investments according to standing instructions and some additional services

Securities services

Euro-denominated securities

Custody (safekeeping) and settlement services are provided for an extensive range of fixed-income euro-denominated securities, including:

• government securities
• agency securities
• covered bonds, and
• supranational securities

A complete list is available on the European Central Bank’s website via the Eurosystem’s Eligible Assets Database. The custody and settlement services for customers in respect of their holdings in the above securities are provided in various ways, e. g. via an account with the local central securities depository, an account with other central securities depositories or international central securities depositories as well as via bilateral arrangements between Eurosystem members.

Custody and settlement

One key aspect of the Eurosystem framework for reserve management services is that customers only need to open a single custody account with a Eurosystem service provider. Via this account, customers can conveniently settle and hold in safekeeping the entire range of euro-denominated securities referred to in the previous section.

The underlying settlement services cover:

• free of payment and delivery against payment settlement operations, with related payments being effected on the designated account with the Eurosystem service provider;
• settlement of cash flows arising from coupon payments, redemptions and other corporate actions;
• end-of-month custody statements. Such statements may also be provided at other dates at the customer’s request;
• transmission of statements via SWIFT to all customers capable of receiving statements via SWIFT and via other means, as appropriate, for non-SWIFT customers.

Executing orders for customers

If requested by customers, Eurosystem service providers execute securities orders for them in the secondary market. Such purchases or sales of securities are carried out on a “best effort” basis for the entire range of eligible securities for which custody accounts are provided. Order parameters are set by customers in accordance with their portfolio management objectives.

Facilitating automatic securities lending programmes

In recognition of the increasing use of automatic securities lending programmes, the Eurosystem reserve management services framework facilitates such programmes on behalf of customers. The Eurosystem service providers offer these programmes via customers’ third-party agents or via (international) central securities depositories. Agreements are concluded to grant the securities lending agent access to customers’ securities holdings. In certain cases, additional sub-accounts may be opened for customers.

Automatic overnight investment facility

Prominent among the services available is a flexible overnight investment facility for cash balances on customers’ accounts. This covers all payment accounts held by customers with the Eurosystem service providers; it is not limited to those payment accounts held in connection with Eurosystem reserve management services. It is available on a customised basis, meeting individual customers’ needs in terms of the working balance desired for their portfolio management or other activities.

The Eurosystem service for overnight investment of customers’ credit balances comprises two investment tiers. Tier 1 involves an investment of a fixed amount directly with the Eurosystem service provider, on a principal basis, at an attractive remuneration rate and consistent with overall market conditions. Tier 2 involves an investment of customers’ balances in the market, on an agency basis, with carefully selected and highly-rated counterparties, and is remunerated in accordance with the rate at which the funds are placed in the market.

This two-tier investment facility allows for the optimisation of cash management. Customers can maintain a high level of liquidity throughout the day (making the settlement of operations easier), knowing that at day’s end the Eurosystem will provide for an automatic overnight investment facility at an attractive rate. The placement of investments under each of the tiers is optional, with customers able to choose both tiers or only one, depending on their preferences and circumstances.

Fixed-term deposit services

Fixed-term deposit services are available to customers on both a principal and an agency basis. Such transactions are carried out at the request of customers, either on an individual basis (transaction by transaction) or as part of a standing order arrangement. In all cases, the deposits are placed with highly-rated counterparties, fulfilling prudent selection criteria, and are remunerated at the market rate.

Foreign exchange operations

Foreign exchange services are available to customers directly from the Eurosystem service providers, meaning that the service provider is the actual counterparty of the transaction. This facility covers the purchase and sale, on a spot basis, of euro against non-euro area G10 currencies.

Executing investments according to standing instructions

Customers can issue standing instructions for the execution of certain investments via a proxy, covering the type of investment, amounts involved and frequency of the standing instruction. In this context, the various individual services encompassing the complete set of Eurosystem reserve management services can be combined in a convenient standing arrangement, meeting the specific needs of customers. Standing instructions are carried out automatically by the respective Eurosystem service provider unless specifically terminated or replaced by the customer in advance of pre-defined deadlines.

Additional services

In addition to the services provided under the framework, each Eurosystem service provider offers certain ancillary services on an individual basis, catering for a variety of specific needs. This high degree of flexibility ensures that customers’ requests are fully and efficiently met.