Clarifications on the Call for Expressions of Interes No. JER-001/2011/1 to select Financial Intermediaries that will receive resources from the EIF , acting through the JEREMIE Holding Fund for Greece, to implement the Funded Risk Sharing Financial Instrument for Information and Communication Technologies (“ICT”)

Reference number: CEoI No. JER-001/2011/1

The Deadline for the submission of Expressions of Interest is the 31^st of March 2010.

Question 1 (Q1):	Please clarify for us the exact management/monitoring procedure of the EIF (JEREMIE) funds. In particular, the EIF funds should be monitored through a separate deposit account by reimbursing repaid capital instalments in weekly/monthly (other) basis?
EIF Answer:	JEREMIE funds are provided from the EIF to the selected Financial Intermediaries (“FIs”) ex-ante or ex-post, based on actual utilisation, in order to finance on a loan by loan basis 50% of the new portfolio to be created. The JEREMIE funds need to be segregated from the FIs own resources. In addition, separate accounting system/code needs to be kept per Operational Programme (“OPs”) contributing to the financial instrument – see 6 OPs presented in Annex 2, section 3, “geographical allocation”. Proper tracking of the funds per Operational Programmes during the various stages (i.e. prior and after disbursement to the SMEs) is required by EC regulation. Typically this is achieved via the opening of separate bank accounts per OP. For the remuneration of the JEREMIE funds please refer to Annex 2, section 2, “Summary description of the risk sharing structure”. The “deposit rate” mentioned in the CEoI accrues on a daily basis. Repayments of JEREMIE funds of all types - as described in Annex 2, section 3, “Repayment of the Financial Instrument under the Operational Agreement”- including interest earned, are repaid from the FIs to the Holding Fund normally on a quarterly basis.
Q2:	Can the Financial Intermediary amend (increase or decrease) the pricing of relevant products? In particular, can the FI increase or decrease the applied spread and/or commission fees because of long duration of the loans and the changing economic circumstances in the future? Also please clarify if a Law 128/75 (0,60%) contribution is permitted to be incorporated on the new loans' final interest rate.
EIF Answer:	As provided for in the CEoI, the pricing – which may be a range – and the fees offer constitute a significant factor in the evaluation of the applications received. In this respect, selected FIs are not entitled to amend their pricing/fees offer throughout the implementation of the product. Law 128/75 contribution of 0.6% is indeed applicable. For clarity reasons, Applicants are requested to specify whether their submitted offer includes this contribution or not.
Q3:	Is there any ability for the FI to apply fixed interest rate products in addition to the floating ones?
EIF Answer:	Fixed interest rate offers are acceptable.
Q4:	In order to implement IT reports (based on Call of Expression of Interest IT Reporting template) there is a need for clarification of various fields of the templates. - a) Is there any possibility for direct communication with the EIF responsible IT person? - b) Can we provide similar or corresponding data from those produced by current applications modified as far as possible?
EIF Answer:	The indicative reporting template is presented alongside the CEoI in order to provide potential Applicants with an initial view of the product’s reporting requirements. Clarifications on IT/Monitoring obligations are provided to the selected FIs in the context of contractual negotiations. Selected FIs are required to complete the relevant reporting tables and provide them to the EIF normally on a quarterly basis in accordance with the reporting template. Financial Institutions can utilise data produced by the current applications but cannot deviate from the reporting format.
Q5:	Customer Interest rate for SBL loans is based on originator rate, so applicable base rate does not exist. Would you accept the presentation of the pricing policy using originator rate, or do we need to “convert” the originator rate into base rate?
EIF Answer:	Originator rate is indeed acceptable to the extent that it is applied by the Applicant - as standard policy - in other similar operations and also to the extent that its methodology is disclosed to the EIF and its fluctuation/update is publicly available.
Q6:	Would it be acceptable to split the pricing and collateral policy to be applied into: Micro and Small Enterprises pricing and collateral policy using the originator rate and; Medium Enterprises pricing and collateral policy using the base rate.
EIF Answer:	Intermediaries should to the extent possible aim to submit a pricing and collateral offer that is in line with tables 1a and 1b of Annex 1, Appendix 2, item (c), (cc). Pricing and collateral offers linked to the size of the enterprises would be acceptable to the extent that a differentiation is made between “high risk” and “standard risk” enterprises as required by the CEoI. Such differentiation shall be made by the FIs taking into consideration their internal credit risk policy guidelines and procedures.
Q7:	On the call it was stated that “A Financial Instrument shall either be set up as an independent legal entity governed by agreements between the co-financing partners or shareholders or as a separate block of finance within a Financial Intermediary” Does this mean that an SPV structure would be acceptable? If not, could you please explain the alternatives to a separate block of finance within a Financial Intermediary?
EIF Answer:	The quoted wording sought to describe the broad definition of a Financial Instrument from a regulatory point of view. The FRSP product envisaged relies on accounting entries within the Financial Intermediary in order to track the drawdown, usage as SME Loans and repayment of funds borrowed from the JEREMIE HF, thereby implementing the “separate block of finance concept”. Please also refer to Q1 above.