Collateral Directive definition
Examples of Collateral Directive in a sentence
However, for the reasons discussed above, under section 3.4.2 ‘Special insolvency treatment’, “certain insolvency provisions are disapplied”.125 Speci- fically, the special insolvency treatment extends to collateral/margin being provided shortly before insolvency as enforced in Article 8 of the Financial Collateral Directive.
The second aspect of the special insolvency treatment relates to Article 8 of the Financial Collateral Directive and in particular the issue of margin.
The Act on Financial Collateral Arrangements applies to financial collateral in the form of (a) securities within the meaning of the Finnish Securities Market Act, (b) account money (i.e., funds credited to a cash account, including also foreign currencies) and (c) loan receivables (receivable based on loan issued by a Finnish or a foreign credit institution or an institution within the meaning of Article 2(1) subsection (o) of the Collateral Directive).
One of the driving forces behind the Financial Collateral Directive was to tackle the conflict of laws89 by creating an EU wide framework that harmonised the various legal systems in relation to the provision of financial collateral.
As previously described, the types of financial collateral circulating the EU can include “cash”, “financial instruments” or “credit claims”.80 The scope of the Financial Collateral Directive does not extend to other forms of collateral that are not considered financial, such as commercial property, plant and machinery and residential property.
The updated opinions for Belgium, Italy, France, Luxembourg, the Netherlands, Portugal and Spain do not take into account the Collateral Directive because the Directive has not been implemented as at the date of the opinion.
The underlying legal mechanisms in relation to the transfer of assets as financial collateral from one party to another party can come in three different forms, which are all catered for in the Financial Collateral Directive (as well as the respective master agree- ments81).
The ‘opt-out’ provision under Article 1 (3) of the Financial Collateral Directive, allows Member states to remain more restrictive in scope and application by excluding parties mentioned in Article 1 (2) (e) of the Financial Collateral Directive.
The material scope of the Financial Collateral Directive relates to three different categories, namely types of financial collateral, property law rights and pos- session and control – each will be discussed.
Financial instruments are specific types of instruments that are explicitly defined in both the Financial Collateral Directive and the Markets in Financial Instruments Directive II (“MiFID II”).