CPMI and IOSCO report and proposed guidance on FMIs' general business risk and losses management

The BIS Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) have published two reports addressing financial market infrastructures' (FMIs) management of general business risks and losses.

The Level 3 assessment report reviews compliance with PFMI Principle 15 ("general business risk") across 34 FMIs based on work carried out in 2023–24. The report identifies six significant concerns highlighting clear challenges for FMIs' resilience to different types of risk that could result in general business losses. These include: (i) failure to consider general business risk when determining liquid net assets funded by equity (LNAFE); (ii) insufficient resources for recovery and wind-down plans; (iii) lack of additional LNAFE beyond participant default coverage; (iv) absence of recovery plans; (v) gaps in orderly wind-down planning; and (vi) no explicit plan for raising additional equity in case of capital shortfalls. In response, the CPMI and IOSCO has issued a consultative report proposing supplemental guidance to the PFMI. The guidance does not introduce new standards but elaborates on the existing PFMI principles. It clarifies the scope of general business risk and its interaction with other principles, and provides guidance on identifying, monitoring and managing general business risks; determining the minimum amount of LNAFE; and governance and transparency. The guidance also considers the findings from the Level 3 assessment report. The deadline for comments is 6 February 2026.

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