Monitoring the implementation of standards
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) monitor the implementation of the Principles for financial market infrastructures (PFMI).
The PFMI are international standards for payment, clearing and settlement systems, including central counterparties and trade repositories. They are designed to help ensure the safety, efficiency and resilience of the infrastructure supporting global financial markets - so their full, timely and consistent implementation is fundamental.
The PFMI also play an important part in the G20's mandate that all standardised over-the-counter (OTC) derivatives should be centrally cleared. Global central clearing requirements reinforce the importance of strong safeguards and consistent oversight of central counterparties (CCPs), in particular CCPs for standardised OTC derivatives. CPMI and IOSCO members are committed to adopt the principles and responsibilities contained in the PFMI in line with the G20 expectations.
Scope of the assessments
The implementation monitoring covers the 24 Principles contained in the PFMI as well as Responsibilities A to E. Reviews are carried out in three stages:
- Level 1: 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 Principles and Responsibilities.
- Level 2: peer reviews of the extent to which the content of the jurisdiction's implementation measures is complete and consistent with the PFMI.
- Level 3: peer reviews that examine consistency in the outcomes of implementation of the Principles by FMIs and implementation of the Responsibilities by authorities.
For the Principles, Level 2 and 3 assessments are done separately. It was considered more appropriate and efficient to carry out a combined Level 2 and 3 assessment of the Responsibilities.
The results of the assessments are published on both the CPMI and IOSCO websites.
The implementation monitoring covers the following jurisdictions: Argentina, Australia, Belgium, Brazil Canada, Chile, China, the European Union, France, Germany, Hong Kong SAR, Indonesia, India, Italy, Japan, Korea, Mexico, the Netherlands, Russia, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. These are jurisdictions with authorities that are members of the Financial Stability Board and/or the CPMI-IOSCO Steering Group that developed the PFMI.
Coverage of different types of FMI
In many jurisdictions, the framework for regulation, supervision and oversight is different for each type of FMI. Level 1 assessments cover the legal and regulatory changes necessary for all types of FMIs. Level 2 and 3 assessments are at times more focused on CCPs and trade repositories (TRs), given their importance for the successful completion of the G20 commitments regarding central clearing and transparency for derivatives products.
Reports published so far
- Level 1 assessments:
- Implementation monitoring of PFMIs - Level 1 assessment
- First update to Level 1 assessment report
- Second update to Level 1 assessment report
- Third update to Level 1 assessment report
- Level 2 assessments:
- Level 2 assessment report for central counterparties and trade repositories - European Union
- Level 2 assessment report for central counterparties and trade repositories - Japan
- Level 2 assessment report for central counterparties and trade repositories - United States
- Level 2 assessment report for Australia for all FMI types
- Level 3 assessments:
- Assessment and review of application of Responsibilities for authorities: covers the five Responsibilities applicable to authorities for all FMI types
Planned monitoring activities
Updates of the Level 1 assessments are conducted each year until participating jurisdictions have progressed in adopting the legislative changes to implement the PFMI.
Level 2 assessments against the Principles are also conducted each year.
A targeted follow-up Level 3 assessment covering key gaps identified by the first Level 3 assessment is being conducted in 2017.