1. Financial instruments shall be considered highly liquid with minimal credit and market risk where they are debt instruments meeting the following conditions:

(a) they are issued or guaranteed by:

(i) a government;

(ii) a central bank;

(iii) a multilateral development bank as listed under Article 117 of Regulation (EU) No 575/2013 of the European Parliament and of the Council [Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1).];

(iv) the European Financial Stability Facility or the European Stability Mechanism;

(b) the CSD can demonstrate to the competent authority that the financial instruments have low credit and market risk based upon an internal assessment by the CSD;

(c) they are denominated in any of the following currencies:

(i) a currency in which transactions are settled in the securities settlement system operated by the CSD;

(ii) any other currency the risks of which the CSD is able to manage.

(d) they are freely transferable and without any regulatory constraint or third party claims that impair liquidation;