CELEX: 51996PC0193
Language: en
Date: 1996-05-30
Title: Proposal for a European Parliament and Council Directive on settlement finality and collateral security

Avis juridique important

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51996PC0193

Proposal for a European Parliament and Council Directive on settlement finality and collateral security  /* COM/96/0193 FINAL - COD 96/0126 */  

Official Journal C 207 , 18/07/1996 P. 0013

Proposal for a European  Parliament and Council Directive on settlement finality and collateral security(96/C   207/08)COM(96) 193 final - 96/0126(COD)(Submitted by the Commission on 30 May  1996)THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 100A  thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Monetary Institute, Having regard to the opinion of the Economic and Social Committee, In accordance with the procedure laid down in Article 189b of the Treaty establishing the European  Community, Whereas the Lamfalussy report of 1990 to the Governors of the central banks of the Group of Ten  Countries demonstrated the important systemic risk inherent in payment systems which operate on the  basis of one or more legal types of payment netting be it bilateral or multilateral, on the one  hand; whereas the reduction of legal risks associated with participation in real time gross  settlement payment systems is of paramount importance, given the increasing development of these  systems, on the other; Whereas the reduction of systemic risk regards in particular the finality of settlement and the  enforceability of collateral security; whereas collateral security is meant to comprise all means  provided by a participant to the other participants in the payment system to secure rights and  obligations in connection with that payment system including, among other means, repurchase  agreements, insurance contracted by a participant in a payment system for the benefit of the other  participants; Whereas, by ensuring that payments and movement of capital may be made free of impediments in the  internal market, the present Directive contributes to the efficient and the cost-effective  operation of cross-border payment arrangements in the European Union; whereas the Directive thereby  follows up the progress made towards completion of the internal market, in particular towards the  freedom to provide services and liberalization of capital movements, with a view to the realisation  of economic and monetary union; Whereas the present Directive is intended to cover payment systems of a domestic as well as of a  cross-border nature; whereas debit as well as credit transfers are covered; whereas the Directive  is applicable to Community payment systems and collateral security constituted by their  participants, be they Community or third country participants, in connection with participation in  these payment systems; whereas the Directive also covers Community institutions which participate  in third-country payment systems; whereas financial flows are increasingly taking place on a  world-wide level; whereas Community institutions and Community payment systems thus are bound to  establish and maintain close operational links with third-country payment systems and to  participate in them; whereas it is essential, therefore, that the cross-border relations between  Community institutions and Community payment systems on the one hand and third-country payment  systems on the other are addressed and facilitated by this directive with a view to avoiding  impediments for Community institutions to participate in third-country payment systems arising from  a lack of legal security; whereas efficient Community payment systems are vital for the internal  market and cannot operate properly without links to third-country payment systems because financial  markets are inextricably connected with one another; Whereas the Directive, by covering collateral security provided in connection with monetary policy  operations, assists the EMI in its task of promoting the efficiency of cross-border payments with a  view to the preparation of the third stage of economic and monetary union and thereby contributes  to developing the necessary legal framework in which the future European central bank may develop  its monetary policy; Whereas the purpose of the present Directive is to ensure that netting is legally enforceable under  all Member States' jurisdictions and binding on third parties; whereas the purpose of the Directive  is also to ensure that payment orders cannot be revoked after a contractually agreed time; whereas  the Directive aims at securing that insolvency proceedings do not have a retroactive effect on the  rights and obligations of participants; whereas the present Directive furthermore aims at  determining - in the event of insolvency proceedings against a participant in a payment system -  which insolvency law is applicable to that part of the insolvency which the rights and obligations  in connection with direct participation in that payment system are; whereas the present Directive  finally intends to insulate collateral security from the effects of the insolvency law applicable  to the failed participant; Whereas the present Directive also applies to the relationship between an institution and a member  of a payment system which transfers the payment orders of such institution to the payment system,  given that this relationship can be considered in itself to be a separate payment system; Whereas the adoption of the present Directive constitutes the most appropriate way of realising the  above objectives; whereas the present proposal is necessary to realise these objectives and does  not go beyond the goal of realising these objectives; HAVE ADOPTED THIS DIRECTIVE: TITLE I SCOPE AND DEFINITIONS Article 1 ScopeThe provisions of this  directive shall apply to: 1. any Community payment system operating in any currency and the ecu and to collateral security  provided in connection with participation in such a system. 2. any Community institution which participates directly in a third-country payment system and to  collateral security provided in connection with participation in such a system. 3. collateral security provided in connection with monetary policy operations. Article 2 DefinitionsFor the purpose of this Directive: (a) institution means any undertaking as defined in Article 1 of Council Directive 77/780/EEC  including the institutions set out in the list in Article 2 (2) thereof, which participates  directly in a payment system, and any other undertaking which participates directly in a payment  system; (b) direct participation means participation in a payment system entailing responsibility for  settlement; (c) EC institution means any institution which has its registered office in a Member State; (d) third country institution means any institution which is not a Community institution; (e) payment order means any instruction to place at the disposal of a final recipient an amount of  money by means of a book entry on the accounts of a credit institution or a central bank; (f) insolvency proceedings means any measure which, for reasons of impending or actual inability to  meet financial obligations, is pronounced by a judicial or administrative authority for the benefit  of a collectivity of creditors, and which precludes from making payments or disposing of property; (g) payment netting means the conversion into one net claim or one net obligation of claims and  obligations resulting from payment orders which an institution either issues to one or more other  institutions or receives from one or more other institutions, with the result that only the net  claim can be demanded or the net obligation be owed; (h) payment system means any written agreement between two or more institutions for executing  payment orders; (i) Community payment system means a payment system located in a Member State. A payment system  shall be deemed to be located in the Member State the law of which has been chosen by the  institutions which participate directly in that payment system. In the absence of choice, the  payment system shall be deemed to be located in the Member State where the settlement takes place; (j) third-country payment system means any payment system which is not a Community payment system; (k) monetary policy operation means an outright (spot and forward) buying and selling operation in  the financial markets or such an operation under a repurchase agreement, or lending or borrowing of  claims and marketable instruments, whether in Community or in non-Community currencies or in  precious metals, by a Member State central bank or by the future European central bank; it also  means the conduct of credit operations, by a Member State central bank or by the future European  central bank, with credit institutions or other market participants, with lending being based on  adequate collateral; (l) collateral security means all assets, provided for the purpose of securing rights and  obligations potentially arising in a payment system or provided to Member State central banks or to  the future European central bank in connection with monetary policy operations. TITLE II FINALITY OF PAYMENT NETTING Article 3 Payment netting1.  Payment netting is legally  enforceable and shall, even in the event of insolvency proceedings against any institution which  participates directly in a payment system, be binding on third parties, provided that the payment  order was entered into the payment system before the opening of insolvency proceedings. The moment  of entrance shall be defined by the rules of that payment system. 2.  Any rule on the setting aside of contracts and transactions entered into before the opening of  insolvency proceedings, shall not lead to the unwinding of the netting. TITLE III REVOCATION OF PAYMENT ORDERS Article 4 Revocation1.  A payment order may not be  revoked either by an institution which participates directly in a payment system or a third party  as against the other direct participants in that payment system after the moment defined by the  rules of that payment system. This rule applies notwithstanding the opening of insolvency  proceedings. 2.  Any right which the originator of a payment order might have to a refund shall be exercised  without prejudice to paragraph 1. TITLE IV NON-RETROACTIVITY AND APPLICABLE INSOLVENCY LAW Article 5 Non-retroactivityInsolvency  proceedings shall not have retroactive effects on the rights and obligations of an institution in  connection with direct participation in a Community payment system. Any other rule or practice  which has a retroactive effect shall be superseded. Article 6 Applicable insolvency lawIn the event of insolvency proceedings against an institution  which participates directly in a payment system, the rights and obligations arising from or in  connection with direct participation in that payment system, shall be determined by the insolvency  law of the country where the payment system is located. TITLE V INSULATION OF THE RIGHTS OF THE PLEDGEE FROM THE EFFECTS OF THE INSOLVENCY OF THE PLEDGER  Article 7 Insulation from the effects of insolvency1.  The rights of a pledgee in connection  with liabilities of one participant to one or more other participants in a payment system or the  rights of monetary authorities to whom collateral security has been pledged in connection with  monetary policy operations, shall not be affected by the opening of insolvency proceedings against  the pledger. The collateral security shall be realised for the satisfaction of rights in connection  with participation in a payment system or with monetary policy operations with priority over all  other creditors. 2.  Where a third-country institution constitutes collateral security in a Member State in  connection with participation in a Community payment system or in connection with monetary policy  operations, the rights of the pledgee shall not be affected by the opening of insolvency  proceedings against that third-country institution. TITLE VI FINAL PROVISIONS Article 8 Implementation1.  Member States shall bring into force the  laws, regulations and administrative provisions necessary to comply with this Directive before 31  December 1998 at the latest. They shall immediately inform the Commission. 2.  When Member States adopt these measures, they shall contain a reference to this Directive or  shall be accompanied by such reference at the time of their official publication. The procedure for  such a reference shall be laid down by the Member States. 3.  Member States shall communicate to the Commission the text of the laws, regulations and  administrative provisions which they adopt in the field governed by this Directive. In this  Communication Member States shall provide a table of correspondence showing the national provisions  which exist or are introduced in respect of each article of this directive. Article 9 Report to the European Parliament and the CouncilNo later than three years after the  date mentioned in Article 8 (1), the Commission shall present a report to the European Parliament  and the Council on the application of this Directive, accompanied where appropriate by proposals  for its revision. Article 10 This Directive is addressed to the Member States.