In an effort to enhance transparency by components of financial market infrastructure (FMIs), such as clearing and payment systems, global policymakers have released the final version of a new framework for disclosure.
The Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO) published the framework Friday, which is intended to promote consistent and comprehensive public disclosure by these sorts of firms, in line with requirements set out in new international standards for FMIs. The framework also includes a methodology that provides guidance for monitoring and assessing compliance with these new standards.
These new international standards are set out in a series of principles for payment, clearing and settlement systems, including central counterparties, that were published in April, which aim to ensure that the infrastructure supporting global financial markets is robust and thus well placed to withstand financial shocks.
The CPSS and IOSCO say that both the disclosure framework and the assessment methodology “facilitate greater transparency, objectivity and comparability of assessments of” the FMIs’ compliance with the new principles, and that they also support consistent implementation and application of those principles.
The disclosure framework and the assessment methodology were both issued for public consultation in April as two separate documents. The final versions are now being issued together, and have been revised in light of the comments received during that consultation.
The aim of the disclosure framework is to enable FMIs to provide transparency about their activities, risk profile and risk management practices; while the assessment methodology is primarily intended for external assessors, such as the International Monetary Fund and the World Bank. It also provides a baseline for national authorities to assess compliance with the principles by the FMIs under their oversight.