RBNZ And FMA Seeking Feedback On Draft FMI Standards

The Reserve Bank of New Zealand – Te Pūtea Matua (RBNZ) and the Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko are inviting feedback on the exposure drafts of standards for financial market infrastructures (FMIs). The Financial Market Infrastructures Act 2021 (the FMI Act) establishes the RBNZ and the FMA as the joint regulator of designated FMIs.

The development of the FMI Standards is a key milestone in the implementation of the FMI Act. The FMI Standards provide a comprehensive framework for the regulation of FMIs operating in New Zealand.

FMIs are often described as the plumbing of the financial system. They are systems that enable electronic payments and financial market transactions to occur, and are therefore essential for the day-to-day operation of the financial system and in turn the economy. Effective regulation of FMIs is essential to promoting robust FMIs and consequently protecting New Zealand’s financial system while facilitating efficient financial markets, ultimately supporting the economic wellbeing of New Zealanders.

Following consultation on the content of the FMI Standards in the second half of 2021, the RBNZ and FMA have prepared exposure drafts of the FMI Standards, along with related guidance, and a draft equivalence framework for overseas FMIs. The RBNZ and the FMA are inviting written feedback on these exposure drafts and related documents until 18 November 2022.

Deputy Governor and General Manager of Financial Stability Christian Hawkesby says: “The proposed FMI Standards would align the regulatory regime for FMIs in New Zealand with international best practice. The binding requirements in the proposed FMI Standards would complete the establishment of a modern regulatory regime for FMIs that is appropriate for New Zealand.”

FMA Acting Director of Capital Markets Paul Gregory says: “We thank industry and stakeholders who have helped inform the development of this work to date. It is important we continue to hear these views and encourage interested parties to share their views on the proposed standards and guidance.”

More information:

• Cover note: exposure draft FMI Standards
• Exposure draft FMI Standards
• Exposure draft Guidance
• Comparison of the FMI Standards to the Principles for Financial Market Infrastructures
• Comparison of the FMI Standards exposure draft guidance to the Principles for Financial Market Infrastructures
• Overseas equivalence framework guidance note
• Reserve Bank and FMA finalise FMI regulatory framework January 2022

Background to consultation

The FMI Act was passed in May 2021. In July 2021, the RBNZ and the FMA sought views from interested parties on aspects of how the new FMI Act should be implemented, including on the systemic importance framework and the approach to developing standards for FMIs. In January 2022, the RBNZ and the FMA published a response to submissions on the consultation. More information is available at:

Implementing the new regime for financial market infrastructures - Reserve Bank of New Zealand - Te Pūtea Matua (rbnz.govt.nz)

What are FMIs and why are they important?

• FMIs are often described as the plumbing of the financial system. They are systems that facilitate non-cash payments and financial market transactions and are essential for the day-to-day operation of the economy, and therefore the wellbeing and prosperity of New Zealanders.
• However, New Zealanders will often not be aware of the critical role played by FMIs because they operate behind the scenes, while banks and other financial sector institutions provide the direct interface with consumers.
• FMIs are multilateral systems that provide clearing, settlement, and reporting services in relation to payments, securities, derivatives and other financial transactions.
• There are several types of FMIs, including payment systems, securities settlement systems, central securities depositories, central counterparties, and trade repositories.
• New Zealanders depend on FMIs in their daily economic lives. The inter-bank payment system operated by the Reserve Bank– the Exchange Settlement Account System (ESAS) – is one example of an FMI operating in New Zealand.

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