Which law is associated with the protection of settlement finality of payments?

The law associated with the protection of settlement finality of payments is the EU Settlement Finality Directive. This directive aims to promote the stability of financial markets by ensuring that certain payment and settlement systems operate efficiently and effectively. It provides a legal framework that protects the finality of settlements, meaning that once a payment has been settled, it cannot be reversed or affected by subsequent insolvency proceedings. This protection is crucial as it instills confidence among participants in financial markets, enabling them to engage in transactions without the fear of unexpected reversals.

The directive is essential because finality of settlement is a key component that facilitates smooth payments, reduces systemic risk, and enhances the overall stability of financial systems. By creating legal certainty regarding the timing and irrevocability of a transaction, it supports the efficient operation of payment systems and other financial infrastructures.

Other options, while related to payment systems and their regulation, do not specifically focus on the concept of settlement finality in the same precise manner as the EU Settlement Finality Directive does. For example, the Payment Services Directive sets out the framework for payment services across the EU but doesn't specifically address the legal protections around settlement finality. Similarly, the Financial Market Infrastructures Law covers broader aspects of infrastructure regulation, and the International