CPSSIOSCOprincipes

CPSSIOSCOprincipes, commonly referred to as the Principles for Financial Market Infrastructures (PFMI), are a set of internationally recognized standards developed jointly by the Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO). They apply to key financial market infrastructures, including payment systems, central counterparties (CCPs), securities settlement systems, central securities depositories (CSDs), and trade repositories. The principles are designed to promote safety, efficiency, and resilience by establishing high-level requirements for governance, legal basis, risk management, settlement finality, access and participation, efficiency, transparency, and contingency planning, among other aspects. They emphasize robust risk management frameworks addressing credit risk, liquidity risk, operational risk, and the procedures for handling settlement failures and defaults.

Regulators and overseers use the PFMI as a baseline for supervision and for assessing an FMI’s ability to withstand financial stress and operational disruptions. Compliance is typically described in terms of observance levels, often through self-assessment by FMIs and evaluation by competent authorities. The PFMI have influenced national regulatory frameworks and international guidance on FMI design, cross-border settlement, settlement finality, and the management of systemic risk in financial markets. The standards aim to harmonize expectations across jurisdictions, supporting safer, more efficient, and more resilient financial market infrastructures worldwide.