The BIS Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) issued a Level 3 assessment of how a sample of 34 financial market infrastructures (FMIs) across 27 jurisdictions implement Principle 15 of the Principles for financial market infrastructures (PFMI) on general business risk, identifying multiple serious issues of concern. The review, based on work carried out in 2023–24, highlights weaknesses in how FMIs determine their needs for liquid net assets funded by equity (LNAFE) to cover potential losses from general business risk and in implementing recovery and orderly wind-down plans. It also identifies concerns around holding LNAFE in addition to resources maintained for risks other than general business risk, the adequacy of recovery and orderly wind-down planning for general business risk, and plans for raising additional equity in the event of capital shortfalls. An additional issue of concern relates to the comprehensive identification, monitoring and management of sources of general business risk, while differences in implementation outcomes across FMIs could result in material differences in resilience. CPMI and IOSCO also published a consultative report intended to provide further guidance on FMIs’ management of general business risks and general business losses.
Bank for International Settlements - Committee on Payments and Market Infrastructures 2025-11-07
BIS Committee on Payments and Market Infrastructures and IOSCO Level 3 assessment flags serious gaps in FMIs’ management of general business risk under PFMI Principle 15
The Bank for International Settlements' Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions issued a Level 3 assessment revealing significant issues in how 34 financial market infrastructures across 27 jurisdictions implement Principle 15 of the Principles for Financial Market Infrastructures on general business risk. The review highlights weaknesses in determining liquid net assets funded by equity, recovery and wind-down plans, and the management of general business risk, with a consultative report published for further guidance.