In December 2012, The Committee on Payment and Settlement Systems (CPSS) and the Technical Committee of the International Organisation of Securities Commissions (IOSCO) released a set of 24 Principles for Financial Market Infrastructures (FMIs), as well as an associated Assessment Methodology and Disclosure Framework, to effectively help these organisations address essential aspects of risk management within the financial markets.
The adoption of these Principles is being strongly encouraged in most international markets by practitioners and regulators alike.
Given that Strate is one of South Africa’s FMIs, it voluntarily completed a self-assessment shortly after the Principles and Assessment Methodology were published by the CPSS-IOSCO. The outcomes of this review were submitted it to its regulator – the Financial Services Board (FSB) – for review during 2013.
Having completed its review, the FSB recently published the report on its website (click here to view the report). It confirms that Strate is recognised as “observing” 14 of the Principles and “broadly observing” a further 3. The remaining 7 Principles are not applicable to Strate at this time.
The ratings indicate that South Africa is at the forefront of adopting initiatives that ensure its financial markets remain robust and resilient, even during periods of market stress. “Greater compliance by all FMIs with the Principles will benefit the global financial markets. By incorporating these Principles into the legislative, governance and risk management frameworks that guide the way that Strate operates allows us to further foster the safety, efficiency and resilience of the country’s FMIs,” says Dale Connock, Strate’s Head of Risk.