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 complete and consistent the European Union’s legal, regulatory and oversight framework is with the Principles for financial market infrastructures (PFMI) for systemically important payment systems and central securities depositories and securities settlement systems. The review concludes that the EU framework is complete and consistent with the PFMI for payment systems in both the euro area and Sweden, while the framework for CSDs/SSSs is largely consistent but has identified improvement areas, including on risk and governance-related principles. For CSDs/SSSs that provide banking-type ancillary services, CPMI-IOSCO rated 16 Principles as consistent, four as broadly consistent (Principles 9 on money settlements, 11 on CSDs, 15 on general business risk and 16 on custody and investment risks) and one as not consistent (Principle 10 on physical deliveries), citing in particular the absence of specific provisions on physical delivery of non-immobilised instruments. For CSDs/SSSs that do not provide banking-type ancillary services, the same Principle 10 gap remains and Principles 4 (credit risk) and 7 (liquidity risk) were rated partly consistent due to a lack of implementation measures addressing participant exposures in certain deferred net settlement and DvP2/DvP3 settlement arrangements without settlement guarantees. The report also notes additional areas where the framework could be strengthened, including clarity on settlement bank transfer timing in legal agreements, disclosure of CSD/SSS investment strategy, and aspects of authorities’ access to information for resolution planning and prompt access to participant-provided assets. The assessment reflects implementation measures in place as of 30 October 2019 and was conducted as a peer review from November 2019 to May 2023. Annexed jurisdictional responses note subsequent reforms, including the EU’s CSDR REFIT published in 2024 and changes in Sweden effective from 1 July 2024, but these developments were not assessed in the report.
Bank for International Settlements - Committee on Payments and Market Infrastructures 2025-04-28
Bank for International Settlements Committee on Payments and Market Infrastructures and IOSCO find EU PFMI implementation fully consistent for payment systems but identify gaps for CSDs and securities settlement systems
The BIS Committee on Payments and Market Infrastructures and IOSCO issued a Level 2 assessment finding the EU framework fully consistent with the Principles for Financial Market Infrastructures for systemically important payment systems in the euro area and Sweden, and largely consistent for central securities depositories and securities settlement systems. For CSDs/SSSs, the review highlights gaps around physical deliveries and credit and liquidity risk in certain settlement arrangements, and calls for enhancements to risk, governance, disclosure and resolution-planning provisions, noting that subsequent EU and Swedish reforms were not covered.