HM Treasury has issued its first remit letter to the Bank of England’s Financial Market Infrastructure Committee (FMIC), recommending that the Committee take account of the government’s economic policy priorities when advancing its objectives for financial stability and, for central counterparties (CCPs) and central securities depositories (CSDs), facilitating innovation. The publication also includes the FMIC Chairs’ response, setting out how the Bank will embed the recommendations across FMI policymaking and supervision. The Chancellor’s letter highlights the systemic role of UK financial market infrastructures, noting that CCPs clear trillions of pounds globally, the CSD settles around GBP 400bn of securities transactions daily, and recognised retail and wholesale payment systems handle over GBP 400bn in payments daily. The recommendations call for active engagement with incumbents and new entrants, a streamlined and positive regulatory experience from initial inquiry or application, proportionate regulation that supports growth while maintaining high standards, and continued international leadership in relevant forums. It also points to maximising the Digital Securities Sandbox and welcomes the Bank’s work considering stablecoins in that sandbox, while stressing the need to defend critical systems from evolving physical, personnel and cyber threats. In its response, the Bank points to recent and ongoing measures including finalising Fundamental Rules for FMIs, with Fundamental Rule 10 requiring FMIs to identify, assess and manage risks their operations could pose to financial stability, and consulting on replacing parts of UK European Market Infrastructure Regulation with a CCP rulebook and proposals to raise CCP “skin in the game” capital. Planned and upcoming steps cited include a consultation paper later in 2025 on the final regime for systemic payment stablecoins, finalising operational incident and third-party reporting policy for FMIs later in 2025 alongside the Prudential Regulation Authority and Financial Conduct Authority, and an expected consultation in late 2025 on exempting transactions arising from post-trade risk reduction services from the clearing obligation. The Treasury recommendations remain in place until the next remit letter, and the FMIC is required to provide a written response within a year and annually thereafter.
HM Treasury 2025-07-15
HM Treasury sets growth and innovation recommendations for the Bank of England’s Financial Market Infrastructure Committee
HM Treasury issued its first remit letter to the Bank of England’s Financial Market Infrastructure Committee, advising alignment with government economic priorities while fostering innovation in central counterparties and central securities depositories. The letter emphasizes the systemic importance of UK financial market infrastructures and calls for proportionate regulation, international leadership, and market participant engagement. The Bank's response outlines ongoing measures, including finalizing Fundamental Rules for FMIs and consulting on a CCP rulebook, with further consultations planned for 2025 on systemic payment stablecoins and post-trade risk reduction services.