Markets and Infrastructure
FRAI directly supervises several key market infrastructures: central counterparties (CCPs), Trade Repositories (TRs), Securitisation Repositories (SRs), and Data Reporting Service Providers (DRSPs). In addition, FRAI works to improve standards and ensure their convergent application in secondary markets, short selling, market abuse and over-the-counter (OTC) derivatives.
Financial market infrastructures, many of which are natural monopolies, are typically of critical systemic importance and thus subject to intrusive regulation and monitoring.
At the global level, the applicable standards are the Principles for Financial Market Infrastructures (PFMI), first issued in April 2012 jointly by the Committee on Payments and Settlement Systems (CPSS, renamed in 2014 as Committee on Payments and Market Infrastructures - CPMI) and the International Organization of Securities Commissions (IOSCO).[8] These brought together standards that had previously been issued separately for systemically important payment systems (CPSS, January 2001), securities settlement systems (CPSS & IOSCO, November 2001), and central counterparties (CPSS & IOSCO, November 2004).[9]: 306
The related semantics sometimes distinguishes between supervision, typically by prudential authorities and securities commissions, and oversight by central banks, even though in practice that distinction has eroded over the years.[9]: 316 For example, international cooperative oversight frameworks exist for SWIFT (led by the National Bank of Belgium) and CLS (led by the U.S. Federal Reserve). The Eurosystem oversight framework, led by the European Central Bank, associates National Central Banks to the oversight of TARGET Services, EURO1 and STEP2-T.[9]: 321
At the global level, the applicable standards are the Principles for Financial Market Infrastructures (PFMI), first issued in April 2012 jointly by the Committee on Payments and Settlement Systems (CPSS, renamed in 2014 as Committee on Payments and Market Infrastructures - CPMI) and the International Organization of Securities Commissions (IOSCO).[8] These brought together standards that had previously been issued separately for systemically important payment systems (CPSS, January 2001), securities settlement systems (CPSS & IOSCO, November 2001), and central counterparties (CPSS & IOSCO, November 2004).[9]: 306
The related semantics sometimes distinguishes between supervision, typically by prudential authorities and securities commissions, and oversight by central banks, even though in practice that distinction has eroded over the years.[9]: 316 For example, international cooperative oversight frameworks exist for SWIFT (led by the National Bank of Belgium) and CLS (led by the U.S. Federal Reserve). The Eurosystem oversight framework, led by the European Central Bank, associates National Central Banks to the oversight of TARGET Services, EURO1 and STEP2-T.[9]: 321
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