Settlement Finality Directive
The 1998 EU directive that stops a payment, once through a payment system, from being unwound just because one of the banks went bust the same day.
The trouble was the zero-hour rule in several national insolvency laws: a bankruptcy took effect from midnight, which could retroactively void every payment the bank made that morning. In a system using deferred net settlement, pulling out one participant means recalculating the whole batch, and the next bank may then fail too. Directive 98/26/EC makes transfer orders and netting in a designated system binding on the liquidator, and puts posted collateral out of reach.
Protection only covers systems a member state has notified; ESMA keeps the register, and Sweden's RIX is on it. For years direct participation was limited to banks and similar institutions. In 2024 the Instant Payments Regulation changed that, letting payment institutions and e-money institutions join directly instead of going through a competing bank.