ABSTRACT
A payment is the transfer of funds from B (payer) to A (payee) which discharges an obligation on the part of the payer B vis-à-vis the payee A. Broadly speaking, payment systems comprise the institutions and technologies facilitating such transfer. A payment system involves one or more persons in the course of business for the purpose of enabling persons to make transfers of funds, and it is designed to facilitate the transfer of funds using another payment system. This chapter examines the mechanism of clearing and settlement in the context of payment services system. It considers the relevant EU legislation and the regulatory development of European Market Infrastructure Regulation (EMIR) directive, particularly on the publicly available information, portfolio transactions, definition of credit events and settlement practice. This chapter also discusses how market participants may understand and manage risk exposures on credit derivatives.
