Europe
The Place of the Relevant Intermediary (or "PRIMA") approach was adopted in Europe under the European Union's Settlement Finality Directive of 1998. That directive has been adopted by a number of states. In 2002, the European Community also passed the European Union's Collateral Directive, though this has yet to be implemented by most member states.
On 23 June 2005, the European Council asked the European Commission to assess and clarify four legal issues, namely: (1) scope of application; (2) extent of third-party rights; (3) consequences for substantive and public law; and (4) impact of the diversity of laws on settlement systems and prudential regimes.
The EC assessment found that three of the issues pose no major difficulty., On the fourth issue it cautioned that the use of more than one Convention law within securities settlement systems would endanger financial stability.
In July 2006 the European Commission indicated its desire to amend the European Union's Settlement Finality Directive and the European Collateral Directive so that those directives are consistent with the Hague Securities Convention.
The Commission therefore recommended that the European Union and Member States now sign the Convention, and that the Settlement Finality Directive be amended so that securities settlement systems are governed by one Convention law only.
Switzerland, which is a European nation that is not part of the European Union and which therefore does not have to wait for agreement among all member states to be reached, has already signed the Convention.
Read more about this topic: Hague Securities Convention
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