Banks and financial markets: settlement finality in payment and securities settlement systems

It affects banks, investment firms, payment institutions, central securities depositories, clearing houses, central counterparties, system operators, central banks, and other financial-market participants using settlement or payment systems.

• Replaces the Settlement Finality Directive with directly applicable EU-wide designation and protection rules.
• Protects transfer orders, netting and collateral from insolvency effects once system finality conditions are met.
• Creates harmonised registration for third-country systems used by qualifying EU participants.
• Updates definitions to cover DLT-based systems, digital records, tokenised instruments and technology-neutral collateral.

Transitional law

Existing designated systems and protected third-country systems continue temporarily until re-designated or registered, or for five years after entry into force.

• Directive 98/26/EC (31998L0026)
  • entire act: repeals the entire directive and replaces references with this Regulation
• Directive 2002/47/EC (32002L0047)
  • art. 1(4): adds subparagraphs to point (a) covering DLT-issued or recorded assets and possible extension of financial instruments
  • art. 2: adds definition of account and clarifies electronic records, DLT, and electronic signing references
  • art. 11: adds derogating transposition deadline for amendments to Articles 1(4) and 2