May 23, 2022

Volume XII, Number 143

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May 23, 2022

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Committee on Payments and Market Infrastructures-International Organization of Securities Commissioners (CPMI-IOSCO) Recovery of Financial Market Infrastructures Report

On October 15, the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissioners (IOSCO) published a final report entitled, “Recovery of Financial Market Infrastructures” (the FMI Report). The FMI Report provides guidance to financial market infrastructures (FMIs) for designing recovery plans from market threats to prevent severe systematic disruptions or failures. FMIs include central counterparties, payment systems, trade repositories, and settlement systems. 

The FMI Report, which was originally issued for consultation in August 2013, supplements the international standards for FMIs published by the Committee on Payment and Settlement Systems (now the CPMI) and IOSCO in April 2012 entitled, “Principles for Financial Market Infrastructures” (PFMIs). The FMI Report does not impose any additional standards, but rather provides guidance on how to implement those standards to establish effective recovery plans.  

The FMI report mandates that FMIs should develop comprehensive and effective recovery tools to allocate any uncovered losses and to cover any liquidity shortfalls. Additionally, FMIs should put in place measures to address unbalanced positions and the replenishment of financial resources, including using the FMI’s own capital. The recovery plan should also set appropriate incentives for the FMI’s owners, participants and other relevant stakeholders to control and monitor any risk-taking activities of the FMI. 

A copy of the FMI report can be found here. A copy of the PFMIs can be found here.

©2022 Katten Muchin Rosenman LLPNational Law Review, Volume IV, Number 297
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About this Author

Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

+44 0 20 7776 7625
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