On June 29, 2016, the European Commission published a report on the appropriateness of the inclusion of credit claims as collateral in the Financial Collateral Directive, including the appropriateness of the restriction on member states to require any formal act for the creation of or validity of such collateral unless the formal act was necessary for the purposes of perfection, priority, enforceability or admissibility in evidence against the debtor or third parties. The Commission assessed the laws that member states implemented across the EU and concluded that, although there is not full harmonization on implementation of the option, the option to include credit claims as collateral should not be removed from the Financial Collateral Directive without further work being undertaken to assess the related impacts. In addition, the Commission considers that action taken within the Capital Markets Union to remove barriers to cross-border clearing and settlement will likely improve the current uncertainty in cross-border exchange of collateral.

The report is available at: http://ec.europa.eu/transparency/regdoc/rep/1/2016/EN/1-2016-430-EN-F1-1.PDF