BIS releases payments and securities settlements reports

BIS releases payments and securities settlements reports

The central bank-backed Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (Iosco) have jointly drawn up recommendations for the design, operation and oversight of securities settlement systems.

The CPSS-IOSCO Joint Task Force invites public comment on its consultative report, 'Recommendations for Securities Settlement Systems'. All interested parties are asked to comment by 9 April 2001.

The report identifies minimum requirements that securities settlement systems should meet and the best practices that systems should strive for. These encompass the legal framework for securities settlements, risk management, access, governance, efficiency, transparency, and regulation and oversight.

The proposed recommendations are designed to cover systems for all securities, including equities, corporate and government bonds and money market instruments, and securities issued in both industrialised and developing countries. They also aim to cover settlement of both domestic and cross-border trades. According to Tommaso Padoa-Schioppa, CPSS Chairman, "these recommendations will promote worldwide implementation of measures that can reduce risks, increase efficiency and provide adequate safeguards for investors".

While some of the recommendations are relevant primarily to central securities depositories (CSDs), others are relevant to stock exchanges, trade associations and other operators of trade confirmation systems, central counterparties, settlement banks, or custodians and other interested parties.

Patrick Parkinson, co-chairman of the Task Force, explains that "securities regulators, central banks, and, in some cases, banking supervisors will need to work together and with relevant private sector entities to determine the appropriate scope of application in an individual jurisdiction, and to develop an action plan for implementation".

The central bank Governors of the Group of Ten (G10) countries in their January meeting also approved the release of a key set of CPSS payments systems standards: 'Core Principles for Systemically Important Payment Systems', which sets out principles that can be applied in all countries.

In carrying out its work, the Task Force collaborated with groups of central banks in Africa, the Americas, Asia, the Pacific rim and Europe. The core principles are generic in nature and detail the key characteristics that all systemically important payment systems should satisfy. They do not represent a blueprint for the design or operation of any individual system, says the BIS, but are intended to be used by countries to assess their own systems and develop appropriate strategies for compliance.

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