Regulators establish settlement system standards

Regulators establish settlement system standards

International financial regulators have set out 19 recommendations defining minimum standards for the design, operation and oversight of securities settlement systems.

The recommendations have been released by the BIS-led Committee on Payment and Settlement Systems (CPSS) and the Technical Committee of the International Organisation of Securities Commissions (Iosco). They are designed to cover systems for all types of securities, including securities issued in both industrialised and developing countries, and to cover domestic as well as cross-border trades.

The final version of the recommendations is released after a long consultation period between regulators and industry participants following the publication of a consultative document in January 2001. Nearly 90 comments were received, mostly from Europe, say the regulators, leading to significant re-writes of certain recommendations and the addition of new guidance on cross-border links between settlement systems.

National authorities responsible for the regulation and oversight of securities settlement systems are expected to assess whether markets in their jurisdiction have implemented the recommendations and to develop action plans for implementation where necessary.

The BIS and Iosco plan to develop an assessment methodology in 2002. The IMF and the World Bank will participate in this next stage of the work.

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