Marketplaces, SROs & Clearing Agencies
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CPSS-IOSCO - RECENT PUBLICATION – MARCH 2011
COMMITTEE ON PAYMENT AND SETTLEMENT SYSTEMS (CPSS) AND
TECHNICAL COMMITTEE OF THE INTERNATIONAL ORGANIZATION OF SECURITIES COMMISSIONS (IOSCO)
RECENT PUBLICATION
PRINCIPLES FOR FINANCIAL MARKET INFRASTRUCTURES
Consultative Report, March 2011
The Technical Committee of the International Organization of Securities Commissions (IOSCO) and the Committee on Payment and Settlement Systems (CPSS) have recently released for comment a consultative report Principles for financial market infrastructures. The report contains 24 principles designed to apply to all systemically important payment systems, central securities depositories, securities settlement systems, central counterparties (CCPs) and trade repositories (TRs) (collectively “financial market infrastructures” or “FMIs”). FMIs facilitate the recording, clearing, and settlement of monetary and other financial transactions, and generally strengthen the markets they serve and play a critical role in fostering financial stability.
The standards in the report (called “principles”) harmonise and, where appropriate, strengthen the existing international standards for FMIs. The new principles are intended to replace the three existing sets of CPSS and CPSS-IOSCO standards that apply to FMIs, namely:
- the Core principles for systemically important payment systems (2001);
- the Recommendations for securities settlement systems (2001); and
- the Recommendations for central counterparties (2004).
The report also outlines the general responsibilities of central banks, market regulators, and relevant authorities for FMIs in implementing these standards. Compared to the current standards, the report introduces a number of provisions on issues that are not addressed by the existing standards. For example, new principles have been introduced on segregation and portability, tiered participation and general business risk. It also incorporates additional guidance for over-the-counter (OTC) derivatives CCPs and TRs.
The CPSS and IOSCO request that all comments be submitted no later than July 29, 2011. While the CPSS and IOSCO are requesting comments on all the proposed principles, they specifically are requesting feedback on the principles governing credit risk, liquidity risk, segregation and portability, general business risk, and access and interoperability. The consultation report is available on IOSCO’s website (www.iosco.org) and on the website of the Bank for International Settlements (www.bis.org). Comments should be submitted by e-mail to both the CPSS secretariat (cpss@bis.org) and the IOSCO secretariat (fmi@iosco.org). The comments will be published on the websites of IOSCO and the Bank for International Settlements unless commentators have requested otherwise. Following review of the comments, the CPSS and IOSCO propose to publish a final report by early 2012.
Staff from the Ontario Securities Commission, Autorité des marchés financiers (Québec) and Bank of Canada participated in the CPSS-IOSCO Steering Group and/or Editorial Team that developed the consultative report. We encourage stakeholders in Canada, particularly FMIs, to review the report and provide comments.
For further information on the CPSS-IOSCO consultative report contact:
Maxime Paré
Senior Legal Counsel
Market Regulation Branch
416-593-3650
e-mail: mpare@osc.gov.on.ca
Antoinette Leung
Manager
Market Regulation Branch
416-595-8901
e-mail: aleung@osc.gov.on.ca
