The European Association of CCP Clearing Houses published a position paper on the European Commission’s draft Settlement Finality Regulation that would repeal the Settlement Finality Directive and amend the Financial Collateral Directive. EACH supports the move to a more harmonised EU settlement finality framework but argues that parts of the draft could add procedural complexity, duplicate existing requirements for regulated infrastructures, and leave gaps in legal certainty for CCPs, including in third-country contexts. EACH’s proposals include simplifying the designation and withdrawal processes and removing jurisdictional frictions such as the condition that at least one participant be established in the Member State of the designating authority, as well as adding a grandfathering mechanism so already designated or registered systems would not have to re-apply. It also asks for closer alignment with Regulation (EU) No 648/2012 (EMIR), including deleting the draft restriction that clearing of non-financial instruments be only “to a limited extent”, and ensuring settlement finality protections for non-financial instruments follow the scope of a CCP’s EMIR authorisation. For third-country systems, EACH calls for consistent application of insolvency protections by extending scope from “institutions” to “participants”, clarifying that protections apply to system operators as well as participants, and applying key finality concepts (moment of entry, irrevocability and final settlement) to registered third-country systems. Other recommendations cover explicitly recognising indirect participants, reversing the draft “transfer order” definition to the broader Settlement Finality Directive wording, leaving irrevocability determinations to system rules, and explicitly protecting CCP default management actions. On collateral, EACH supports including distributed ledger technology and tokenised assets, seeks clearer coverage of CCP margin and default funds across the Regulation, suggests treating EMIR bank guarantees as collateral where they are realisable, and asks to clarify that Article 25 protections cover title-transfer collateral. It also proposes extending close-out netting protections to clearing member resolution scenarios and narrowing potential ESMA and EBA technical standards mandates where they could conflict with existing CCP and CSD rules.
European Association of CCP Clearing Houses 2026-04-01
European Association of CCP Clearing Houses calls for simplification and broader CCP protections in the EU Settlement Finality Regulation draft
The European Association of CCP Clearing Houses published a position paper on the European Commission’s draft Settlement Finality Regulation, supporting a more harmonised EU framework but warning that certain provisions could increase procedural complexity, duplicate requirements and weaken legal certainty for central counterparties, including in third-country contexts. EACH proposes simplifying designation and withdrawal processes, aligning settlement finality protections with EMIR, clarifying and extending protections for third-country systems, indirect participants, CCP default management and collateral (including DLT and tokenised assets), and narrowing some ESMA and EBA technical standards mandates.