/regulation & compliance

News and resources on regulation, compliance, legal and governance issues for banks and fintechs.
Bank of England reprimands Euroclear over settlement outage

Bank of England reprimands Euroclear over settlement outage

The Bank of England has taken supervisory action against Euroclear following a settlement outage that resulted in notable market disruption in Ireland last year.

The outage, which disrupted trading over a weekend in September 2020, was caused by an issue with messaging software which resulted in a discrepancy within the settlement system. Settlement was immediately and automatically halted whilst investigations were undertaken.

The incident hit on Friday September 11, with some additional problems on the following Monday when full settlement service resumed later that afternoon.

The outage forced the Bank of England to delay one of its regular purchases of British government bonds under quantitative easing.

In a statement, the central bank says: "In light of the incident’s serious and disruptive nature, and in recognising the importance of ensuring implementation of these remedial actions, the Bank has issued a direction under section 191 of the Banking Act 2009 requiring EUI to implement the recommendations of the independent reviewer. The Bank is also using its powers under section 166 of the Financial Services and Markets Act 2000 to require EUI to appoint a skilled person to assess the implementation of the recommendations."

The skilled person will provide a final report to the Bank in the first half 2022 to provide assurance that the outcomes required by the recommendations have been met.

Euroclear states: "Euroclear UK & Ireland is fully committed to implementing these changes and in fact a number of the recommendations have already been executed."

Comments: (0)