CCPA is a designated payment system in accordance with Article 10 of the EU Finality Directive (Directive 98/26/EC on Settlement Finality), according to which all payments are final:
The EU Finality Directive, adopted in May 1998, applies to payment and/or securities settlement systems and to all participants in such systems. The Directive aims primarily at eliminating the legal factor of systemic risk, i.e., the risk that the failure of one counterparty will not result in the failure of other participants or even of the system itself: To this end, it allows for the execution of payments initiated prior to insolvency and, in particular, prevents the retroactive cancellation of payments. It also applies to collateral provided as part of participation in a system.
The recognition as a final payment system for clearing in the electricity spot market thus makes a major contribution to the legal certainty for Clearing Members and the stability of CCPA as a central counterparty:
- Payment orders and offsets (netting) are legally effective and binding for third parties to be
- Finality effect is achieved at an early stage to provide the greatest possible legal certainty in the event of insolvency
- Effectiveness of payments and the enforceability of collateral (interaction with the Financial Collateral Directive)
- Clearing Members from EU and non-EU countries in the electricity spot market are covered, as it is immaterial for finality whether the participants are from the EU or from third countries
- In the event of insolvency of a Clearing Member, the collateral provided by it shall not be affected by the application of insolvency law to the insolvent Clearing Member
The designated final payment system of CCPA can be presented as follows:
