The Financial Stability Board (FSB) published a framework for information from financial market infrastructure (FMI) intermediaries to support resolution planning. The framework seeks to help FMI intermediaries better understand which information clients and their resolution authorities may need from them. It does so by providing an overview of the baseline information that is potentially relevant for clients and resolution authorities, which they and their FMI intermediaries can then discuss, as needed, during bilateral engagement. In the framework, the terms “FMI service user” and “client” are being used interchangeably to mean a legal entity that is a financial institution (including bank) or a group that has access to critical FMI services and that is subject to a resolution regime.
The use of a common framework for identifying certain baseline information relevant to continuity of access in resolution should help reduce the burden of information gathering and avoid unnecessary duplication. Though this framework does not set new requirements, it clarifies the topics that would typically be part of such requests. The use of the framework is voluntary but FMI intermediaries should be prepared to respond to requests from their clients and their clients’ resolution authorities, in a form they see fit. The framework covers the FMI services provided by the FMI intermediaries, conditions governing suspension or termination, phase prior to resolution, resolution phase, and cases in which an FMI intermediary is in resolution. FSB will organize an outreach webinar for stakeholders on this framework on September 16, 2021. The first experience with this framework will be evaluated during 2022. Post which, the FMI service providers and service users (clients), as well as other stakeholders, will have the opportunity to provide feedback and suggestions on the framework and the process.
FSB, in May 2019, had held a workshop with industry on continuity of access to FMIs for firms in resolution, to discuss possible actions to assist authorities and firms in implementing the 2017 FSB guidance; this guidance sets out arrangements and safeguards to facilitate continuity of access to FMI services for a firm in resolution, with a view to maintaining the firm’s critical functions that rely on the continued access to FMI services. As part of implementing the guidance, authorities and firms develop plans to facilitate continuity of access in resolution; this requires information about the nature of the FMI service user’s relationship with both FMIs and FMI intermediaries on the arrangements and safeguards that would affect an FMI service user’s access to FMI services in the run-up to, and during, its resolution. In August 2020, FSB had published a questionnaire for FMIs, which had been developed in consultation with the FMIs and banks. The purpose of this was to reduce the “many to one” nature of inquiries from FMI participants and authorities to FMIs for resolution planning and streamline the provision of this information from FMIs to firms and authorities.
Following an evaluation of stakeholders’ first experiences with the process via an online survey in April 2021, FSB has now updated the questionnaire. All FMIs are encouraged to complete the questionnaire and to publish their responses, or to make them available in other ways to FMI service users and resolution authorities to inform their resolution planning. The questionnaire covers general information on the FMI and its legal structure; information on the rulebook/contractual provisions regarding termination; the phases prior to resolution, during signs of distress at the FMI participant, and the resolution phase; and arrangements and operational processes to facilitate continued access in resolution. FSB emphasizes that if an FMI chooses not to complete the questionnaire, it should be prepared to respond to its clients’ and their resolution authorities’ information requests within reasonable deadlines, as mutually agreed.
- Notification on Framework for Information
- Framework for Information (PDF)
- Notification on Revised Questionnaire
- Revised Questionnaire (PDF)
Keywords: International, Banking, FMI, Resolution Framework, Resolution Planning, FMI Intermediaries, Questionnaire, FSB
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