31 July 2008

ECON draft report on review of Settlement Systems

Rapporteur Piia-Noora Kauppi issued her draft report on the Commission proposal amending the settlement finality and the financial collateral directives. The rapporteur proposes few substantial, as well as a number of minor clarifications.

As regards the Settlement Finality Directive, several amendments to the

Commission proposal are introduced to clarify definitions of interoperable systems in order to improve legal certainty in the application of the Directive to such systems.

As regards the Financial Collateral Directive, the rapporteur proposes three substantial changes.

• First, consumer credit as well as credit for small enterprises is excluded from the scope of the Directive. A definition of a small enterprise is introduced in order not to exempt an unnecessarily large part of business loans from the scope of the Directive.
• Second, the formal notification requirement of the use of credit claims as collateral should be phased out and a sunset clause in five years is introduced.
• Finally, the directive is extended to include inter-bank loans as eligible collateral, instead of just central bank loans as the original proposal suggested.

Draft report

Commission proposal

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