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Brussels, 16 May 2006

Payment and securities settlement systems: Commission consults industry on evaluation of Settlement Finality Directive

The European Commission is inviting industry, consumers and other stakeholders to comment on the evaluation report on the Settlement Finality Directive (see IP/05/1613), which identified a number of areas where the Directive could possibly be revised. The Commission will also discuss the report with Member States and the European Central Bank within the framework of the European Securities Committee. On the basis of these consultations, the Commission will assess whether or not the Directive requires revision. The deadline for submission of comments is 30 June 2006.

Internal Market and Services Commissioner Charlie McCreevy said: "I encourage the settlement industry and consumers to give us their views on the evaluation report. Together with the opinions we are receiving from Member States and the ECB, this will help us to establish whether or not the Settlement Finality Directive needs to be revised, and to ensure that the EU's payment and securities settlement systems remain safe and secure."

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 the light of Economic and Monetary Union. 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.


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:

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