Oversight of Key Financial Market Infrastructures

Oversight Expectations

Expectations regarding the management of risks in payment and settlement systems and the oversight of these systems from a prudential and systemic risk perspective are largely laid out in three documents:

Part 1, Federal Reserve Policy on Payment System Risk: The Board's views and related principles and standards regarding the management of risks in payment and settlement systems.

International Standards: Internationally accepted risk-management standards for systemically important payment systems, securities settlement systems, and central counterparties. These standards have been developed by the Committee on Payment and Settlement Systems (CPSS) for payment systems, and the CPSS, in conjunction with the Technical Committee of the International Organization of Securities Commissions (IOSCO), for securities settlement systems and central counterparties. These standards have also been incorporated into the Federal Reserve Policy on Payment System Risk.

CPSS Report on Central Bank Oversight of Payment and Settlement Systems : A descriptive and analytical report explaining why and how central banks oversee payment and settlement systems. The report addresses the need for oversight, the source of central banks' responsibilities for oversight, the scope of oversight and the activities that oversight involves. In addition, the report discusses cooperative oversight, where more than one central bank or other authority has responsibilities for a system. The report also includes 10 principles for effective oversight.

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