Increasing use of securities and collaterals in transactions brings the legal ambiguity in today's financial markets which are trying to globalise. It should have been noted that without legal certainty an achievement can not be obtained in a complete manner. To solve this legal ambiguity in financial markets, reform movements have been started through out the world from different groups, institutions and communities involving both jurists and practitioners., The Directive on settlement finality in payment and securities settlement systems and the Directive on financial collateral arrangements were adopted. These two directives are both supplementary legislations for the Directive of the Parliament and of the Council on the reorganisation and winding up of credit institutions dated 4 April 2001. All of these directives are the circles of a chain that aim the proper functioning of the internal financial market in European Union. In this study, mainly the Collateral Directive will be taken into account. Firstly, the necessity of a harmonised collateral law and the aims of the Collateral Directive will be handled. Following, the main provisions of the directive will be analysed in details. While analysing in details, the different implementations of the directive in member states will be mentioned. Finally, the conflict of laws clause and the consequences of the directive will be explained.