24 February 2017

GFMA/IIF response to FSB consultation: Guidance on continuity of access to Financial Market Infrastructures for a firm in resolution

The Global Financial Markets Association (GFMA) and the Institute for International Finance (IIF) (together the “Associations”) welcome the opportunity to comment on the Financial Stability Board‘s (FSB) proposed guidance on Continuity of Access to Financial Market Infrastructures (FMIs) for a Firm in Resolution (the Guidance).

They strongly support the objectives of the Guidance including enhancing transparency and communication between FMIs, FMI intermediaries, firms and the relevant supervisory and resolution authorities to further advance work in this area. They set out below a number of areas where they believe clarification and adaptation is necessary to provide a workable framework to achieve these goals. The key issues they believe should be addressed in the final guidance include the following:

• it should be clarified that custodian banks are not in any way classified as FMIs and should instead be treated, for the purposes of this Guidance only, as FMI intermediaries which better reflects the services they provide. This should be achieved by clarifying that custody services are covered by the definition of FMI intermediary and by removing references to custodians from the definition of FMI and elsewhere in the Guidance;
• it is essential to distinguish between FMIs and FMI intermediaries in each portion of the Guidance. While they agree that the over-arching objective of ensuring continuity of access to critical FMI services should apply to both direct and indirect access, there are a number of important differences which need to be considered and reflected in the Guidance; conflating the two may lead to unnecessary confusion and complexity;
• a number of the definitions require clarification including the definitions of FMI intermediary, critical FMI services and FMI participant or firm;

The Associations and their members look forward to working with the FSB and regulators to facilitate the implementation of the Guidance, and would welcome a further discussion with the FSB as to how further work on consistent and efficient implementation might be organised.

Full response

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