Clearing and settlement is an important mechanism in the post-SEPA European payments environment. Prior to SEPA, each country in European Union had a separate local clearing and settlement mechanism. The cross-border payments were time consuming and had to be compliant with the payment laws and regulations of countries of both the originator and beneficiary. After the advent of SEPA, CSM framework has seen lot of revolutionary changes. In the post-SEPA scenario, cross-border fund transfer is treated as domestic transfer. Clearing mechanism has to meet local compliance and SEPA compliance for interoperability. Also CSMs have to meet EU legal and regulatory compliances.