(This note is not part of the Regulations)
The Regulations implement Directive 98/26/EC of the European Parliament and of the Council on settlement finality in payment and securities settlement systems (OJ L166, 19.5.98, p. 45) ("the Directive"). The Directive seeks to reduce the risks associated with participation in payment and securities settlement systems by minimising the disruption caused by insolvency proceedings brought against a participant in such a system.
The protection provided by the Regulations is given to any system which has been designated by the Financial Services Authority or the Bank of England. Regulations 3 to 12 make provision in relation to designation and the Schedule sets out the requirements that a designated system must satisfy.
Regulations 13 to 19 modify the law of insolvency in so far as it applies to transfer orders effected through a designated system and to collateral security provided in connection with participation in designated system. Regulation
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