Stay Compliant With

PFMI

PFMI stands for "Principles for Financial Market Infrastructures." These principles are a set of international standards and guidelines developed by the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO). The primary purpose of the PFMI is to enhance the safety and efficiency of financial market infrastructures (FMIs) on a global scale.

FMIs are key components of financial markets and include payment systems, central securities depositories, central clearinghouses (also known as central counterparties or CCPs), and securities settlement systems. They play a crucial role in facilitating the clearing, settlement, and recording of financial transactions, as well as the transfer of funds and securities.

The PFMI includes 24 principles that cover various aspects of FMIs, with a focus on risk management, operational resilience, transparency, and governance. Some of the key areas addressed by the PFMI include:

Legal Framework

Establishing a robust legal framework that provides a clear and enforceable basis for the operation of FMIs.

Governance

Ensuring effective governance structures and processes to manage the FMI’s activities, including oversight by competent authorities.

Risk Management

Implementing comprehensive risk management frameworks to identify, measure, monitor, and mitigate risks, including credit, liquidity, operational, and legal risks.

Operational & Security Risks

Maintaining high standards of operational and security risk management to ensure the resilience and reliability of FMIs.

Access and Participation

Ensuring fair and open access to FMIs while managing participation risks.

Default Management

Establishing procedures for managing defaults by participants, including collateral and margin requirements.

Settlement Finality

Ensuring the finality and irrevocability of settlement processes.

Transparency

Providing transparency to relevant authorities, participants, and the public on relevant aspects of the FMI’s operations.

Efficiency

Striving for efficiency in the FMI’s operations and avoiding unnecessary costs and delays.

The PFMI is considered a critical set of standards for FMIs and is used as a benchmark by regulators and financial institutions worldwide. Compliance with these principles is essential for maintaining the safety and stability of financial markets and protecting market participants. Financial market authorities and FMIs often work together to ensure that FMIs meet the standards set out in the PFMI.

Our PFMI compliance services help you comply with the international standards for financial market infrastructures (FMIs), such as central counterparties (CCPs), central securities depositories (CSDs), and payment systems. We can help you assess your compliance with the 24 principles and 5 responsibilities of the PFMI, and provide recommendations

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