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

    Related Articles
    News

    EBA Finalizes Templates for One-Off Climate Risk Scenario Analysis

    The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.

    November 28, 2023 WebPage Regulatory News
    News

    EBA Mulls Inclusion of Environmental & Social Risks to Pillar 1 Rules

    The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.

    October 31, 2023 WebPage Regulatory News
    News

    BCBS Consults on Disclosure of Crypto-Asset Exposures of Banks

    As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.

    October 19, 2023 WebPage Regulatory News
    News

    BCBS and EBA Publish Results of Basel III Monitoring Exercise

    The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.

    October 18, 2023 WebPage Regulatory News
    News

    PRA Updates Timeline for Final Basel III Rules, Issues Other Updates

    The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.

    October 18, 2023 WebPage Regulatory News
    News

    US Treasury Sets Out Principles for Net-Zero Financing

    The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.

    October 17, 2023 WebPage Regulatory News
    News

    EC Launches Survey on G7 Principles on Generative AI

    The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.

    October 14, 2023 WebPage Regulatory News
    News

    ISSB Sustainability Standards Expected to Become Global Baseline

    The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.

    September 18, 2023 WebPage Regulatory News
    News

    IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance

    Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.

    September 18, 2023 WebPage Regulatory News
    News

    BCBS Assesses NSFR and Large Exposures Rules in US

    The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.

    September 14, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8938