By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-The Committee on Payments and Market Infrastructures (CPMI), formerly Committee on Payment and Settlement Systems (CPSS) and the International Organisation of Securities Commissions (IOSCO) on Wednesday unveiled guidance for financial market infrastructure in a published report entitled Recovery of financial market infrastructures.
The Bank of International Settlement and the global securities regulator said the report provides guidance to financial market infrastructures (FMIs) such as central counterparties (CCPs) on how to develop plans to enable them to recover from threats to their viability and financial strength that might prevent them from continuing to provide critical services to their participants and the markets they serve.
CPMI and IOSCO affirmed the report also provides guidance to relevant authorities in carrying out their responsibilities associated with the development and implementation of recovery plans.
According to CPMI and IOSCO, the report was issued for consultation in August 2013 and the final version published has taken into account comments received during the consultation process.
A statement from both bodies say the report supplements the Principles for financial market infrastructures(PFMI), the international standards for FMIs published by the CPSS and IOSCO in April 2012. It does not create additional standards for FMIs but does provide guidance on how FMIs can observe the requirements laid down in the PFMI that they have effective recovery plans. The report is also consistent with the Key attributes of effective resolution regimes for financial institutions of the Financial Stability Board (FSB), which was reissued on Wednesday.
‘’FMIs, which include payment systems, securities settlement systems, central securities depositories, CCPs and trade repositories, play an essential role in the global financial system. The disorderly failure of an FMI could lead to severe systemic disruption if it caused markets to cease to operate effectively,’’ the joint statement affirmed.
