MARKET INFRASTRUCTURES: INPUT SOUGHT ON DRAFT STANDARD FOR MINIMUM RECOVERY REQUIREMENTS

MARKET INFRASTRUCTURES: INPUT SOUGHT ON DRAFT STANDARD FOR MINIMUM RECOVERY REQUIREMENTS

• 04 June 2024
• Financial Sector
• SA Legal Academy

The Financial Sector Conduct and Prudential Authorities have issued a communication calling for input by 18 July 2024 on a joint draft standard proposing minimum requirements for the recovery plans of market infrastructures. This is with the aim of:

• ensuring that a stress scenario or shock event does not impair the prudent management of a market infrastructure’s business, and
• enabling that market infrastructure ‘to recover from such a threat while continuing to provide its critical services, without requiring the use of resolution powers’.

According to the communication, the authorities have chosen not to prescribe the recovery tools a market infrastructure may use in such circumstances. ‘Instead, a principle-based approach is followed’ – although each market infrastructure will be required to ensure that its recovery plan remains ‘commensurate with its risk profile’.

Against that backdrop, the following documents have been published:

• the draft joint standard (for comment)
• a draft joint guidance notice (for comment)
• a statement of need
• a joint notice, and
• the communication itself.

Input should be made using:

• the comments template, and
• the questionnaire.

Published by SA Legal Academy Policy Watch

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