The Bank of England (BoE) has published its annual report on the supervision of financial market infrastructures (FMIs).

In terms of future developments and priorities for 2018, the BoE has noted the following:

  • supervisory priorities: the BoE will continue its FMI core assurance reviews, in particular with regard to IT resilience at payment systems and on financial risk models at central counterparties (CCP);
  • FMI policy developments in 2018: an important area of work will be the UK’s withdrawal from the EU. The BoE has been working to assess and mitigate any potential disruption to the provision of services provided by some FMIs as a result of the UK’s withdrawal from the EU. Box 4 of the annual report sets out the BoE’s work in this area in more detail. Also, in terms of MiFID II and MiFIR, the BoE plans to conduct thematic work on indirect clearing;
  • remaining vigilant to broader developments: the BoE will ensure it actively monitors key developments which could impact on the stability of FMIs. The annual report notes that the continued development of Fintech offers the opportunity for significant changes to how financial markets operate. The BoE will remain vigilant to developments in this area through horizon-scanning exercises and monitoring developments within the FMI landscape, including possible new entrants;
  • the BoE’s evolving supervisory approach: the BoE keeps its supervisory approach to FMIs under constant review. The BoE will continue to implement the recommendations from a report by the Independent Evaluation Office on FMI supervision. Following a re-articulation of FMI supervisory objectives, the BoE intends to publish an updated version of its FMI supervisory approach in due course. A significant development to the BoE’s FMI supervision will be the implementation of the CCP data project; and
  • FMI data and research: the BoE will continue to invest in its capabilities and technology to collect, process and store current and future large-scale FMI data sets to inform the FMI agenda and contribute to financial stability outcomes. Over 2018, the BoE’s FMI research agenda may include, for example, matters related to liquidity efficiency in payment systems, the impact of regulation on the functioning of over-the-counter derivatives markets, or the implementation of the Central Securities Depositories Regulation.

View Bank of England supervision of FMIs annual report 2018, 20 February 2018