The European Commission’s targeted consultations on European Union settlement finality and financial collateral rules

The previous occasion on which we heard from the European Commission on the directives (an interpretative communication in March 2018)³ was somewhat of a non-event. In relation to key issues of interpretation related to the question of which law governs the proprietary aspects of collateral transactions in book-entry securities the Commission “clarified” that all the divergent approaches taken by member states were valid under the relevant directive provisions.⁴ In fact despite their undoubted importance to the Commission’s longstanding aim of achieving integrated capital markets in Europe relatively little has been said about the directives at EU-level leaving it largely up to member states to define their scope and operation. In contrast the consultations raised a number of important and interesting policy ideas. I will discuss a few of these below as well as consider whether there are other material issues to be addressed...