29 December 2020

Update regarding CLS’s response to the Financial Stability Board’s (FSB) questions relating to “Continuity of Access to FMIs for Firms in Resolution” (the “Questionnaire”) 

We at CLS fully support the FSB’s approach with respect to the promulgation of the Questionnaire, designed to assist FMIs, participants in FMIs and relevant authorities by streamlining the information gathering process, and thereby reducing the “many to one” nature of bank and authority inquiries to FMIs. CLS is pleased to report that it has completed the Questionnaire, which has been distributed to members via Member Notice 54.20 on 23 December 2020.

We are mindful of the important role we play, as the operator of a systemically important financial market infrastructure (i.e., the CLS Settlement System), as well as within the broader financial system. Accordingly, we have proactively sought to maximize the likelihood that a member in resolution will be able to safely continue to participate in CLSSettlement. Our efforts in this area over the years have included:

  • Amending the CLS Bank International Rules, including the introduction of a “fast-track” application process to accommodate a change in membership in a resolution scenario (e.g., a transfer in membership to a bridge bank)
  • Conducting “resolution war games” with our members and authorities, in order to help the industry identify and address potential impediments to continued participation of members in resolution
  • Providing members with comprehensive documentation highlighting issues for their consideration in connection with their own resolution planning as well as in connection with the resolution of another member
  • Reviewing and commenting on proposed regulation and legislation in jurisdictions where members are located, and
  • Engaging with authorities, members and other FMIs to discuss and socialize key issues and concerns.

In light of the importance of this matter, our efforts in the resolution space are ongoing. We look forward to continued engagement with members, authorities and other stakeholders.

Find out more on https://www.fsb.org/2020/08/fsb-continuity-of-access-to-fmis-for-firms-in-resolution-streamlined-information-collection-to-support-resolution-planning/

 

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