The Bank for International Settlements' Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a Level 2 assessment of how completely and consistently the United Kingdom’s legal, regulatory and oversight frameworks for systemically important payment systems and central securities depositories and securities settlement systems (CSDs/SSSs) implement the Principles for Financial Market Infrastructures (PFMI), as of 30 September 2023. The peer review concludes the UK framework for payment systems, including both private sector and central bank-operated systems, is complete and consistent with all applicable Principles, while the framework for CSDs/SSSs is largely consistent but includes areas needing improvement. For CSDs/SSSs that provide banking-type ancillary services, the assessment finds five Principles are broadly consistent (Principles 9, 11, 15, 16 and 23) and one is not consistent (Principle 10), alongside recommendations to address identified gaps. The main shortcomings relate to the absence of specific provisions on physical delivery of non-immobilised instruments, limited coverage of central bank money settlement requirements and missing provisions on settlement bank agreements, incomplete measures addressing risks from a CSD’s other activities, unclear linkage between restructuring requirements and recovery planning resources, potential gaps in safeguarding participant collateral held outside the CSD/SSS and in fully disclosing investment strategy, and a lack of an enforceable requirement to complete and publicly disclose PFMI disclosure framework responses and minimum transaction data. For CSDs/SSSs that do not provide banking-type ancillary services, additional regulatory gaps lead to partly consistent ratings for credit risk (Principle 4) and liquidity risk (Principle 7), particularly where deferred net settlement arrangements without settlement guarantees may create participant exposures that are not covered by implementation measures; the review also notes a further potential strengthening point around explicitly requiring information provision for resolution planning. In the report’s included jurisdictional response, the Bank of England notes that since the assessment cut-off it has published Fundamental Rules for FMIs in 2025 and intends to consider the assessment team’s insights in any future work to establish rules applicable to CSDs, using rulemaking powers under the Financial Services and Markets Act 2000 as amended by the Financial Services and Markets Act 2023.
Bank for International Settlements - Committee on Payments and Market Infrastructures 2026-04-16
Bank for International Settlements' Committee on Payments and Market Infrastructures and IOSCO Level 2 review finds UK payment system PFMI implementation consistent but flags CSD and securities settlement system gaps
The BIS Committee on Payments and Market Infrastructures and IOSCO issued a Level 2 assessment of the UK’s implementation of the Principles for Financial Market Infrastructures for systemically important payment systems and central securities depositories/securities settlement systems as of 30 September 2023. The payment systems framework is deemed complete and consistent, while the CSD/SSS framework is largely consistent but has gaps in physical delivery provisions, central bank money settlement coverage, risk controls for other CSD activities, collateral safeguarding, disclosure of investment strategies and PFMI data, and credit and liquidity risk where banking-type services are absent. The Bank of England has since introduced Fundamental Rules for FMIs and will factor the findings into future CSD rulemaking under its updated powers.