(This note is not part of the Regulations)

These Regulations implement Directive 2009/44/EC of the European Parliament and of the Council amending Directive 98/26/EC on settlement finality in payment and securities settlement systems and Directive 2002/47/EC on financial collateral arrangements (OJ L146, 10.6.09, p 37). The Directive seeks to make further provision for linked or "interoperable" systems, and ensure that credit claims may be used as financial collateral.

Regulation 2 amends the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (S.I. 1999/2979) ("the 1999 Regulations"). Paragraph (2) amends the definition of "collateral security" to include credit claims, and defines credit claims. It also amends the definitions of participant and indirect participant, adds new definitions of "business day", "interoperable system" and "system operator", and amends a number of definitions to provide for interoperable systems.

Paragraphs (3) to (7) and (9) amend regulations 4 to 8 and 10 of the 1999 Regulations so that obligations previously imposed on the designated system itself are now imposed on the system operator of that system. Paragraph (8) clarifies the liability of a participant through which an indirect participant passes transfer orders to the designated system.