Featured Product

    CPMI-IOSCO Assess Continuity Planning of Market Infrastructures

    July 21, 2021

    The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs. The report also presents a high-level summary of the responses of the financial market infrastructures to the COVID-19 pandemic in some member jurisdictions. It also identifies increased cyber risk and scope for improvement in certain areas.

    The report finds that all the surveyed financial market infrastructures have operational reliability objectives, focusing on system availability and recovery time; they reportedly review their business continuity plans at least annually and test them regularly. However, the report found that the business continuity management of some, and potentially many, financial market infrastructures does not seem to aim to resume operations in a timely way, including in the event of a wide-scale or major disruption. The key findings of the exercise are summarized below:

    • An identified concern relates to timely recovery in the event of a wide-scale or major disruption. Based on the information provided by the participating market infrastructures, there are doubts on whether their business continuity plans are designed to ensure that critical information technology systems can resume operations within two hours following disruptive events and enable the financial market infrastructure to complete settlement by the end of the day of the disruption, even in case of extreme circumstances. CPMI and IOSCO expect the relevant financial market infrastructures and their supervisors to address this as a matter of the highest priority.
    • Cyber risk was another identified area of concern. A few financial market infrastructures in the sample did not provide specific business continuity plan objectives with respect to cyber risk. Among the financial market infrastructures that have specific  business continuity plan objectives with respect to cyber risk, only a few explicitly acknowledged the breadth and depth of potential cyber attacks and the complexities of cyber risks that their business continuity plans may not be able to cover. 

    The report also noted that overall the financial market infrastructures have not experienced service disruptions during the pandemic. Financial market infrastructures have observed that the pandemic highlighted operational risks posed by third parties such as critical service providers. No major incidents involving third parties were reported during 2020. However, financial market infrastructures noted an increased threat of cyber risks, especially in remote working environments. In this context, financial market infrastructures have adopted enhanced cyber-security monitoring, with extra vigilance regarding their internal VPN networks and have trained their staff thoroughly on threats arising from remote access. 

    This review was a part of the regular monitoring of the implementation of the Principles for Financial Market Infrastructure (PFMI), which set international standards for payment, clearing, and settlement systems. Implementation is being monitored on three levels. Level 1 self-assessments report on whether a jurisdiction has completed the process of adopting legislation and other policies that will enable it to implement the Principles and Responsibilities. Level 2 assessments are 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 examine consistency in the outcomes of implementation of the Principles by financial market infrastructures and implementation of the Responsibilities by authorities. This report represents the Level 3 assessment of consistency in the outcomes of the implementation of the PFMI. 

     

    Related Links

    Keywords: International, Banking, Financial Market Infrastructure, FMI, Operational Risk, PFMI, PFMI Level 3, Business Continuity, COVID-19, Cyber Risk, IOSCO, CPMI

    Featured Experts
    Related Articles
    News

    BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks

    The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.

    March 13, 2023 WebPage Regulatory News
    News

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News
    News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News
    News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News
    News

    BCBS Report Examines Impact of Basel III Framework for Banks

    The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.

    February 28, 2023 WebPage Regulatory News
    News

    PRA Consults on Prudential Rules for "Simpler-Regime" Firms

    Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.

    February 28, 2023 WebPage Regulatory News
    News

    DNB Publishes Multiple Reporting Updates for Banks

    DNB, the central bank of Netherlands, updated the list of additional reporting requests and published additional data quality checks and XBRL-Formula linkbase documents for the first quarter of 2023.

    February 28, 2023 WebPage Regulatory News
    News

    NBB Sets Out Climate Risk Expectations, Issues Reporting Updates

    The National Bank of Belgium (NBB) published a communication on climate-related and environmental risks, issued an update on XBRL reporting

    February 24, 2023 WebPage Regulatory News
    News

    EBA Updates Address Securitization Standards and DGS Guidelines

    The European Banking Authority (EBA) published the final draft of the regulatory technical standards that set out conditions for assessment of homogeneity of the underlying exposures in simple, transparent, and standardized (STS) securitizations.

    February 21, 2023 WebPage Regulatory News
    News

    FSB Publishes Letter to G20, Sets Out Work Priorities for 2023

    The Financial Stability Board (FSB) published a letter intended for the G20 Finance Ministers and Central Bank Governors, highlighting the work that FSB will take forward under the Indian G20 Presidency in 2023

    February 20, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8793