The legal framework that governs payments and securities settlement comes from European Union and Estonian legislation. The directly applicable rules of the European Union are not replicated in the domestic law of the member states.

The acts of general application of the European Union are regulations and directives of the European Parliament and the Council, which are adopted at the initiative of the European Commission. Member states have to transpose the directives into their national law, while regulations apply directly.

A directive on settlement finality has been adopted in order to reduce the risks of payments and securities settlements and to contribute to the efficient operation of payment and settlement systems. Its main purpose is to ensure that the payment orders entered in the payment and securities settlement systems are enforceable and cannot be revoked if a participant in the system becomes insolvent. A harmonised legal framework and standards for the use of the main payment services and payment instruments has been set up to create an integrated market for payments and to support its operation. To ensure the securities market functions properly, harmonised conditions for trading, clearing and settlement have been fixed.

Estonian legislation implements European Union legislation and regulates areas that are not harmonised at the European Union level.

The payments market is governed by European Union legislation

Legislation regulating the payments market in Estonia

The securities market is governed by European Union legislation

  • Regulation 648/2012 on OTC derivatives, central counterparties and trade repositories (EMIR)
  • Directive 2002/47/EC on financial collateral arrangements
  • Directive 2009/44/EU, amending Directive 98/26/EC on settlement finality in payment and securities settlement systems and Directive 2002/47/EC on financial collateral arrangements as regards linked systems and credit claims
  • Regulation 909/2014on improving securities settlement in the European Union and on central securities depositories (CSDR)
  • Directive 2014/65/EC on markets in financial instruments (MiFID)
  • Regulation 600/2014 on markets in financial instruments

Legislation regulating the securities market in Estonia