Recital 12

(12)The reduction of systemic risk requires, inter alia, settlement finality. The Union has adopted Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems ⁴ . Directive 98/26/EC requires the rules for systems designated under it to define the moment of entry (after which transfer orders shall be legally enforceable and, even in the event of insolvency proceedings against a participant, binding on third parties) and the moment of irrevocability of transfer orders. Intraday or real time settlement may also be advisable if compatible with the SIPS general business model and necessary to enable the SIPS operator and participants to manage their respective credit and liquidity risks.