Monitoring the implementation of the PFMI
The CPMI and the International Organization of Securities Commissions (IOSCO) monitor the implementation of the Principles for financial market infrastructures (PFMI), which are international standards for payment systems, central securities depositories, securities settlement systems, central counterparties and trade repositories.
The PFMI are designed to help ensure the safety, efficiency and resilience of these infrastructures supporting global financial markets - so their full, timely and consistent implementation is fundamental. CPMI and IOSCO members have committed to adopting the principles and responsibilities contained in the PFMI in line with the G20 expectations.
CPMI and IOSCO monitor the implementation of the PFMI based on a framework comprising three levels:
- Level 1 assesses whether jurisdictions have completed the process of adopting the legislation, regulations and other policies (implementation measures) that will enable them to implement the Principles and Responsibilities;
- Level 2 assesses the completeness and consistency of the content of legislation, regulations and policies (implementation measures) with the Principles and Responsibilities; and
- Level 3 assesses consistency in the outcomes of implementation of Principles and Responsibilities.
Level 1: Self-assessments - adoption of legislation, regulations and policies
Self-assessments that report on whether a jurisdiction has completed the process of adopting the legislation and other policies that will enable it to implement the 24 Principles of the PFMI and Responsibilities A, B, C and E for authorities.
Level 2: Peer reviews - consistency in the relevant content of the framework
These assessments are peer-reviews that examine whether, and to what degree, the content of the legal, regulatory and oversight framework is complete and consistent with the Principles. The focus of the L2 assessment is on the relevant framework itself, not on the application of this framework by authorities, nor on FMIs’ observance.
The assessment reports set out key conclusions that reflect CPMI-IOSCO’s collective expert judgment regarding the impact of identified gaps and/or shortcomings. Ratings are determined for each Principle after the jurisdiction’s legislative and regulatory framework – including policy statements, as relevant – is compared with the corresponding content of the PFMI.
Level 3: Peer reviews - consistency in the outcomes of the implementation of the PFMI
Level 3 (L3) peer reviews examine consistency in the outcomes of implementation of the Principles by FMIs and implementation of the Responsibilities by authorities. L3 assessments are peer benchmarking exercises and not supervisory exercises, and focuses on the consistency in outcomes of implementation of the relevant Principles and Key Considerations (KCs) across the group of FMIs as a whole, rather than on each individual FMI’s specific implementation outcomes.
L3 assessment reports do not include ratings but may include key findings and observations.