Financial Collateral Directive (FCD)

The EU Financial Collateral Directive (FCD) introduces a harmonised framework for the use of financial collateral to secure transactions, and thereby enhances the use of cross-border collateral. The FCD protects collateral takers by ensuring that financial collateral arrangements can be mobilised and realisable without delay, due to national formalities; providing for close-out netting provisions to be enforceable, in accordance with their terms and ring-fencing the operation of financial collateral arrangements, should one of the parties become insolvent.