The Saeima has adopted and the President promulgated the following laws: on settlement finality in payment and settlement systems of financial instruments of chapter I General provisions article 1. The law is applied in the following terms: 1) system — an agreement that satisfies all of the following conditions: (a)) it is agreed between at least three members, not including the settlement agent, the central counterparty, clearing or an indirect participant, if these institutions are also the participants in the arrangement for the execution of transfer orders in accordance with common rules and standardised procedures, (b)) it regulates the designated members of the Republic of Latvia or the European Union or European economic area Member State law , c) Republic of Latvia or the European Union or European economic area Member State under whose law the system works, it detected on the system, and it is included in the European Commission's register in which is recorded on all the systems listed in European Parliament and Council Directive 98/26/EC ' on settlement finality in payment and securities settlement systems (hereinafter referred to as Directive 98/26/EC);
2) Authority — an institution that participates in the system and is responsible for the financial obligations incurred pursuant to transfer orders in the system, and meet one of the following conditions: (a)) it is in the Republic of Latvia or in the European Union or European economic area Member State registered credit institutions, (b)) it is in the Republic of Latvia or in the European Union or European economic area Member State registered investment brokerage company It is the country, c) the institution or company that guarantees the country d) it is a company whose headquarters is located outside the Republic of Latvia, the European Union and European economic area Member States and which correspond to the Republic of Latvia, the European Union and European economic area Member States, the supervision of credit institutions or investment brokerage company tasks;
3) central counterparty: an institution that works for the benefit of the intermediary institutions, servicing the transfer orders;
4) settlement agent: an institution that authorities or central counterparty opens current accounts settlement system for transfer orders processed and, if necessary, the said authorities or central counterparty may issue a credit billing;
5) clearing center — the body responsible for the calculation of the net positions of institutions and central counterparty or settlement agent's net position is calculated, if these institutions are also the participants in the arrangement and the agreement provides for the calculation of the net positions;
6) Member the authority central counterparty, a settlement agent or a clearing centre;
7) — indirect participant credit institution set out in paragraph 2 of this article and in paragraph "a" of the possibility of having a system to send transfer orders are contractual relationship with an institution that is a member of the system and executes transfer orders;
8) system provider (operator), a body which, in accordance with the rules of the system ensure the functioning of the system;
9 systemic risk — risk) that one member was unable to meet their obligations will cause other participants or financial institutions could not, within a specified time to execute their responsibilities. Such a situation may cause significant liquidity or credit problems, but it can threaten the stability of the financial market;
10) transfer orders: an instruction that meets one of the following conditions: (a) the Member's statement) any amounts of money transfer to the disposal of the recipient with the accounting records of the credit institution, a central bank or a settlement agent, or any instruction in the account, which seems to assume or perform the payment obligations in accordance with the rules of the system, (b) the Member's instructions to transfer) the ownership of financial instruments or rights to financial instruments with the entry in the register or otherwise;
11) insolvency proceedings — any measure provided for in the Republic of Latvia, the European Union or European economic area Member State or any other State laws to wind up the participant, as well as the target or to reorganise it, where such measure involves financial instruments or money order the suspension or restriction;
12) the opening of insolvency proceedings — a time when the Republic of Latvia, the European Union or European economic area Member State or any other State the relevant judicial or administrative authority or the decision to open insolvency proceedings;
13) including: requirements and obligations into one net claim or one net obligation so that you can nominate only net requirements and meet only if the requirements of net liabilities and obligations resulting from transfer orders executed by one or more participants in favor of one or more other participants in the system or that members receive from other members;
14) checking account — the account at the central bank, a settlement agent or a central counterparty, which members use of the funds and the financial instrument for the storage system and to settle transactions between participants;
15)-all marketable collateral assets provided as collateral (including money provided as collateral), as in the case of reverse repurchase agreements (repo) or as a similar agreement, or otherwise, to ensure that the rights and liabilities which may arise, by participating in the system, or providing central bank;
16) central bank, the Bank of Latvia, another national central bank or the European Central bank;
17): transfer orders clearing rate, compare and, if necessary, before the approval of payment, as well as transfer orders and netting the net position, according to which the payment will be made;
18) clearing system: a set of procedures by which members of the clearing centre or another specific location out with money or financial instruments linked wire transfers of information or document exchange. To ensure the commitment of the participants in the settlement with off set of procedures may include procedures for members of the net position is calculated;
19) net position — the difference between clearing members for a specified period of time received and made the total remittances. If this difference is positive, the net credit position of the building or the net requirement, but, if the difference is negative, the formation of the net debtor position or net liabilities;

20) headquarters: a place (address), where participants or indirect participant management. If a participant or indirect participant does not operate in the country in which the Member of the management or indirect participant Headquarters considered the site address where the indirect participant Member or principal place of business. For the Republic of Latvia registered participants or indirect participants in the headquarters of the Member or to be considered as indirect participant's legal address.
 
2. article. This law aims to ensure: 1) financial market stability by promoting the Republic of Latvia and the cross-border payment and settlement systems of financial instruments for the safe and efficient operation, limiting systemic risk and minimize the interference, which could lead to the opening of insolvency proceedings against a participant;
2) clearing and settlement finality, the legal system in force and the right freely to realise the collateral provided for participation in the system or in dealings with the central bank, also a member of the insolvency proceedings.
 
3. article. This law applies to: 1) system, which is operated by the Bank of Latvia or that financial and capital market Commission (hereinafter the Commission) on this system review provisions established for systems and the European Commission included in the registry;
2) all paragraph 1 of this article in that system participants;
3) collateral provided for participation in paragraph 1 of this article, in these systems, or by the central bank used transactions, the performance of the functions of the central bank.
 
4. article. (1) the Republic of Latvia or the European Union or European economic area Member State on this law, article 1, paragraph 1, meaning the agreement can also be determined: 1) with the task of this law, article 1, point 10 b transfer orders referred to and which to a limited extent executes orders for other types of financial instruments, if such a decision is justified by the systemic risk;
2) between two parties, not including the settlement agent, the central counterparty, clearing or an indirect participant if such institutions are also members of the arrangement, on the transfer order, if such a decision based on the systemic risk.
(2) the decision of the Republic of Latvia in the first paragraph, the determination of the said Agreement shall be adopted by the Commission system.
 
5. article. (1) the Republic of Latvia or the European Union or European economic area Member State authority for this law, article 1, paragraph 2, the meaning can also be determined by the company that participates in the system concerned is fulfilled only this law, article 1, point 10 b transfers referred to in the order, as well as payments resulting from such orders, if this company is responsible for financial obligations arising from transfer orders in the system unless at least three members of that system is this law, article 1, paragraph 2, and the following decisions of the systemic risk.
(2) the decision of the Republic of Latvia in the first paragraph, the determination of the said company for the authority shall be adopted by the Commission.
 
6. article. (1) the Republic of Latvia or the European Union or the European economic area for participants of this law article 1 paragraph 6 the meaning can also be determined indirectly from the participant if the indirect participant is identified and recognized, and if such a decision is justified by the systemic risk.
(2) the Republic of Latvia, the decision referred to in the first paragraph of the indirect participant Member of the determination made by the Commission.
 
7. article. One and the same Member can act as a central counterparty, settlement agent or clearing centre or take part of that participant or that participant tasks all tasks, if the option for the system.
 
Chapter II transfer orders and Netting in article 8. (1) the clearing and transfer orders are valid and binding on third parties, even if some participants started insolvency proceedings, unless the transfer orders are entered into a system before the opening of insolvency proceedings.
(2) if the transfer orders are entered into a system after the participant's insolvency proceedings and can perform the following procedures on the day of the opening, they are valid and binding on third parties only if, after the conduct of settlement systems, settlement agent Sustainer, the central counterparty or the clearing Center can show that it did not know and could not know about such proceedings.
(3) neither civil law nor the law of credit institutions, nor the law on the insolvency of undertakings and companies ", nor any other laws, rules, standards or practices that provide for the cancellation of contracts and transactions, including with regard to repealing the requirements and obligations of the participants in the system prior to the opening of insolvency proceedings.
(4) when the transfer order is entered into the system, each system.
 
9. article. Members of the insolvency proceedings shall not affect: 1) use funds or financial instruments available to the participant's settlement account to allow the participant to meet its obligations is the opening of insolvency proceedings in a day;
2) grant a system participant credit against collateral available in the system to comply with the obligations of the participants in the system.
 
10. article. No one can undo the transfer order at the moment that defined the rules of the system.
 
Chapter III rules on insolvency procedures of members article 11. (1) the Court of Justice of the Republic of Latvia Law of civil procedure the conditions prescribed shall inform the Commission of the Member's insolvency proceeding.
(2) When the administrative authority to which the law establishes the following rights, shall decide on the Member's insolvency proceedings, it immediately-the same day — inform the Commission thereof.
(3) the Commission shall, without delay, on the same day when received by the Republic of Latvia for a court or administrative authority decision or judgement of a member's insolvency proceedings, — inform: 1) system maintainer, which the participants take part in;
2) the institutions of the European Union or European economic area Member States receiving such information and communicated to the European Commission.
 

12. article. Insolvency proceedings shall not affect the rights and obligations of a participant arising from participation in the system or is related to it and is incurred prior to the opening of insolvency proceedings. Such rights and obligations of the participant cannot be declared invalid.
 
Chapter IV Guarantees workers protection guarantor in the event of insolvency proceedings article 13. The right to the security of a good participant provided, and on the collateral provided for a good central bank does not affect the proceedings initiated against the system or central bank counterparty, which provided the collateral security. Such security that can be marketed to meet immediately, and that security should not be covered by the restrictions laid down in the law of credit institutions, the law "on insolvency of undertakings and companies" and other laws which determine the realization of security rights.
 
The choice of the law of chapter v, article 14. Determining the country under whose laws the system will work, members can only choose the country in which at least one Member's headquarters.
 
15. article. After the opening of insolvency proceedings against a participant in its rights and obligations arising from participation in a system shall be determined under the law of the State, under which the system operates.
 
16. article. If financial instruments (including rights arising from financial instruments) provided as collateral for the benefit of the participants or the central bank, and the members (or their representatives, agents or third parties acting on their behalf) on the financial instruments are recorded in the register, account or centralised depository system in that country, subject to the following: the security of workers, the right to the aforementioned financial instruments regulated by national laws.
 
Chapter VI provisions of article 17 of the system. The system maintainer system rules expressed in writing and include the following information: 1) system maintainer;
2) State under whose law the operating system;
3) procedure is amended, in the provisions of the system and the way in which the Commission is informed of the change;
4) the order in which the players join the system or terminates participation in it, and the order in which the Member's membership is terminated;
5) payment and settlement types in the system, information on the number of participants is bound by the terms of the settlement;
6) system maintainer's rights and obligations. If multiple system maintainers shall include information on what is their mutual rights and obligations of the distribution;
7) the time when the transfer order is entered into the system;
8), after which time the participant can not unilaterally undo the transfer order;
9), provided the participant and its management;
10) information on how the system works in fault situations and cases where the participant is unable to meet its payment obligations.
 
18. article. (1) the system maintainer before starting the system, or system of rules, the entry into force of the amendments shall inform the Commission of provisions or amendments.
(2) the first paragraph of this article, the obligation to inform the Commission does not apply to central banks.
 
19. article. (1) the Commission shall determine those devices which operate in accordance with the laws of the Republic of Latvia and to meet the objective of this law and the applicable rules of this law.
(2) For systems that are not maintained by central banks, the Commission, after the receipt of the documents sent to the Bank to get an opinion about the system and its compliance with the provisions of Directive 98/26/EC requirements, and after receiving the opinion of the relevant decision.
 
20. article. The Commission shall inform the European Commission of the systems which operate in accordance with the laws of the Republic of Latvia and in particular on the systems, which the European Commission to be included in the registry.
 
21. article. The system shall notify the Commission of the Sustainer system participants, indirect participants and any change in the composition of the participants.
 
22. article. At the request of the person shall inform the institution of the system, in which the authority shall participate, and provide details of the main system.
 
Transitional provisions 1. requirements of this law do not apply to insolvency proceedings commenced before the entry into force of this law.
2. the system maintainer, which operate in accordance with the laws of the Republic of Latvia, three months after the entry into force of this law, shall provide the Commission with 18 of this law and the information referred to in article 21.
 
Informative reference to European Union directives, the law includes provisions resulting from Directive 98/26/EC.
Act entry into force shall be fixed by special law.
The law adopted by the Parliament in 2003, 11 December.
 
State v. President Vaira Vīķe-Freiberga in Riga 2003 December 24.