Bank of England publishes annual report on the supervision of financial market infrastructures

The Bank of England has published its annual report on its supervision of financial market infrastructures, covering the period December 16, 2023 —December 17, 2024. The report sets out the work undertaken by the BoE over the past year in relation to FMIs to deliver its financial stability objective and secondary innovation objective. The report also outlines the BoE's objectives for the coming year.

Generally, the objectives reflect the BoE's work to establish the FMI rulebook alongside continued emphasis on robust supervision and effective international co-operation. Specific areas of focus include: (i) ensuring U.K. financial stability through financially resilient FMIs. The BoE will continue to monitor risks to financial resilience, including undertaking a range of supervisory reviews, technical risk reviews, stress tests and third-party reviews across the FMI sector; (ii) ensuring FMI services are operationally resilient and are not a major financial stability risk in the event of disruption. The BoE will work with FMIs undertaking internal transformation programs to ensure that changes are completed effectively and efficiently and with robust standards to ensure U.K. financial stability. It will also continue to work with other regulators to roll out and embed the oversight of critical third parties as set out in the CTP oversight approach document once HMT designate the first CTPs; (iii) enabling safe and resilient innovation in payments, settlement, and clearing. The BoE will continue to work with HM Treasury to take forward the government's ambitions for the U.K. payments landscape as a whole, including delivering on the outcomes identified in the HMT National Payments Vision; and (iv) implementing and embedding the BoE's new responsibilities in a proportionate and robust way. The BoE plans to develop and implement the FMI rulebook, the first priority will be the repeal and replacement of the European Market Infrastructure Regulation for central counterparties. The BoE expects to consult on the first phase of this new rulebook in 2025. It will also publish final rules and guidance on a set of fundamental rules for FMIs, following its November consultation.

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