International Organization of Securities Commissions and the Committee on Payments and Market Infrastructures
Principles of Financial Market Infrastructures - IOSCO and CPMI consult on application to stablecoin arrangements - 6 October 2021
The International Organization of Securities Commissions (IOSCO) and the Committee on Payments and Market Infrastructures (CPMI) have published a joint consultative report on the application of the Principles for Financial Market Infrastructures (FMIs) (PFMI) to stablecoin arrangements.
The purpose of the report is to provide guidance on the application of the PFMI to operators of systemically important stablecoin arrangements (SAs) as they design, develop and operate their services and arrangements. It is also intended to be used by regulatory, supervisory and oversight authorities to use as they carry out their responsibilities in relation to systemically important SAs. For these purposes, an SA is an arrangement that combines a range of functions to provide an instrument that purports to be used as a means of payment or store of value or both.
The view of IOSCO and CPMI is that the function of an SA in transferring coins is an FMI function and therefore an SA that performs this function should be considered an FMI for the purpose of applying the PFMI. On this basis, the principles in the PFMI that apply to payment systems will apply in their entirety to an SA performing a transfer function. If an SA provides functions that more closely resemble those provided by other types of FMIs, the SA should consider the relevant principles and observe them.
In the report, IOSCO and the CPMI set out:
- considerations for determining the systemic importance of SAs. In particular, they consider that authorities should consider issues including the size of an SA, the nature and risk profile of its activity, its interconnectedness and interdependencies, and its substitutability; and
- guidance on how certain aspects of the PFMI could be observed by SAs. These relate to governance (principle 2), the framework for the comprehensive management of risks (principle 3), settlement finality (principle 8) and money settlements (principle 9).
The consultation closes on 1 December 2021.
Consultative report: Application of the Principles for Financial Market Infrastructures to stablecoin arrangements (CR03/2021)
Press release
European Securities and Markets Authority
Retail investor protection - ESMA publishes call for evidence - 1 October 2021
The European Securities and Markets Authority (ESMA) has published a call for evidence on the European Commission’s mandate on certain aspects of retail investor protection. The call for evidence follows the Commission’s July 2021 request for advice, which asked ESMA to advise on a number of focused areas to assist the Commission to develop aspects of its Retail Investment Strategy and make appropriate adjustments to the legislative framework.
Section two sets out the information sought, which is on disclosures, digital disclosures and digital tools and channels. In the context of the latter, the call for evidence also explores the topic of open finance, that is, how far value chains should be opened by sharing specific investor data among investment firms and third-party providers.
The call for evidence will be of interest to investment firms and credit institutions performing investment services and activities, manufacturers of packaged retail investment and insurance products (PRIIPs), as well as to consumers, consumer organisations and relevant trade associations. ESMA intends to use the responses to the call for evidence in the preparation of the draft technical advice due for submission to the Commission by 30 April 2022. The deadline for responses to the call for evidence is 2 January 2022. ESMA intends to hold a public meeting on the call for evidence in Q4 2021.
Call for evidence: On the European Commission mandate on certain aspects relating to retail investor protection (ESMA35-43-2827)
Webpage
Press release
European Central Securities Depositories Association
CSDR - ECSDA updates settlement fail penalties framework - 5 October 2021
The European Central Securities Depositories Association (ECSDA) has published an updated version of its settlement fail penalties framework under the Central Securities Depository Regulation (909/2014/EU) (CSDR).
The framework applies to all Central Securities Depositories (CSDs) subject to the CSDR and its underlying standards. It aims to increase settlement efficiency and create a harmonised set of rules for the creation and operation of settlement discipline measures, and constitutes market practice for CSDs and their participants.
ECSDA has also published the responses to the practical questions it asked CSD participants in relation to CSDR cash penalties implementation.
Updated publication: ECSDA CSDR Penalties Framework
Response to practical questions of CSD participants on CSDR penalties
Press release
See the General section for items on the OECD’s reports on investing, financial markets and climate transition and the CMA’s responses to BEIS’s consultations on competition and consumer policy reform and a new digital markets regime.
