Internal Market and Services Commissioner Charlie McCreevy said: "We need to ensure that the payment and securities settlement systems that lie at the heart of our financial markets are safe and secure. The current settlement finality structure works well. However we will work closely with Member States, industry and the ECB to Establish if it is appropriate to adapt the directive once we have looked at the issues that are to be subject of review.
Settlement Finality Directive
The Settlement Finality Directive was the EU's response to the need to minimise systemic risk and to ensure the stability of payment and securities settlement systems, especially in light of Economic and Monetary Union (EMU). It provides that transfer orders entered into these systems cannot be revoked or otherwise invalidated, even when a participant in the system becomes insolvent. Making these transfer orders legally binding and enforceable contributes to the stability of settlement systems and thus to stability of the financial sector as a whole.
The Directive specifies (Article 12) that the Commission should produce a report on the Directive and, where appropriate, propose revisions to it.
Background
Payment systems are highly automated computerised arrangements through which
payments of money, usually in large amounts, are effected. Securities settlement
systems perform a similar function in relation to transfers of securities and
are where market trades are usually executed and recorded.
The evaluation
report is available at:
http://europa.eu.int/comm/internal_market/financial-markets/settlement/index_en.htm