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    CPMI and IOSCO Outline Lessons Learned on Cooperation Among FMIs

    December 10, 2019

    CPMI and IOSCO published a report that shares lessons learned from the ways in which financial authorities cooperate to promote the safety and efficiency of financial market infrastructures (FMIs). This report describes ways in which authorities cooperate with each other in a variety of contexts, with emphasis on the expectations in Responsibility E of the Principles for Financial Market Infrastructures (PFMI). The practices presented in the report reflect authorities’ actual experience and elaborate on six key topics: the benefits of cooperation; triggers for cooperation; relevant authorities with regulatory, supervisory, or oversight responsibilities over FMIs; cooperation regarding a specific FMI; designing of cooperative arrangements; and tools for cooperation.

    Cooperation among authorities is highly valued and has been demonstrated by central banks, market regulators, and other authorities worldwide for decades. CPMI and IOSCO have observed that cooperation among authorities is evolving and that cooperative arrangements for specific FMIs are growing in number and importance. These developments are due, in part, to the increasing globalization of financial markets, policy decisions resulting in an increased use of and reliance on FMIs, and the systemic importance of particular FMIs domestically and in multiple jurisdictions. Given these observations and the role of cooperation in the regulation, supervision, and oversight of FMIs, CPMI and IOSCO developed this report to share lessons learned by authorities. 

    The report is designed to share the lessons learned by a wide range of regulators, supervisors, and overseers of FMIs with cooperation. It describes the ways in which authorities cooperate with each other in a variety of contexts, with emphasis on the expectations in Responsibility E under the PFMI. Responsibility E describes how authorities should cooperate with each other, both domestically and internationally, as appropriate, in promoting the safety and efficiency of FMIs. The report includes illustrative effective practices that may inform authorities in their development of, and improvements to, cooperative arrangements for all FMI types. The report concludes with a summary of lessons learned, which reflect several themes that emerged from the review of authorities’ experience. The report may be useful to authorities in jurisdictions that are in the process of developing a regulatory framework for FMIs. 

    The discussion is not intended to impose additional standards beyond those set out in the PFMI or to provide additional guidance beyond that provided in Responsibility E. Instead, the report identifies and elaborates on a range of issues and practices that authorities have experienced and considered when determining whether, and how, to establish and enhance cooperation that suits their needs and fulfills their respective mandates. The report has benefited from contributions from a range of authorities with responsibilities for regulating, supervising, and overseeing all types of FMI as well as central banks of issue that have an interest in the payment and settlement arrangements of an FMI. 


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    Keywords: International, Banking, Securities, PFMI, FMI, Systemic Risk, Responsibility E, Supervisory Convergence, Lessons Learned, CPMI, IOSCO

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