Brussels, 17/05/2006 (Agence Europe) - On 16 May, the Commission invited industry, consumers and other stakeholders to comment on the evaluation report of December 2005 on the implementation of directive 98/26/EC on Settlement Finality in payment and securities settlement systems (see EUROPE 9091). The consultation exercise, which is open until 30 June, will assess whether or not the directive needs revision.
The evaluation report identifies ten areas which need to be considered very carefully, notably, some definitions contained in the directive which are interpreted by Member States. According to the report, it is not clear whether the definition of insolvency covers all types of insolvency or similar proceedings. Some Member States, the report notes, would welcome this definition to be widened. Interpretations differ, too, at national level over the inclusion of electronic money firms in the sense of directive 2000/46/EC in the definition of credit firms. Finally, the report highlights the lack of consensus in the EU on whether the settlement body, clearing houses and central counterparties fall within the definition of participant or indirect participant.
Directive 98/26/EC sought to minimise systemic risk and to ensure the stability of payment and securities settlement systems, especially in the light of Economic and Monetary Union and the increase in cross-border financial transactions. It provides that transfer orders entered into these systems cannot be revoked or otherwise invalidated, even when a participant becomes insolvent.