Speaking at the CPSS-IOSCO panel discussion at Sibos yesterday, CEO of South African central securities depository, Monica Singer, argued that the principles-based route is the only one that works where she believes that CPSS-IOSCO cannot, realistically, prescribe things (as would be the case with ‘rules-based’ legislation). It is rather ‘best practice’ considerations that help a local market identify areas to focus on in order to provide a robust FMI.
According to Singer, the principles have put all financial market infrastructures on par with one another— from central counterparties to CSDs— giving them equal weight and encouraging them to comply with the same set of principles for the benefit of the global financial market.
The PFMIs were issued by CPSS-IOSCO in April 2012. Jurisdictions globally are currently in the process of incorporating them into their regulatory frameworks to foster the safety, efficiency and resilience of their financial market infrastructures. In South Africa, there is already legislation in place to support the PFMIs called the Financial Markets Act, which became operational at the beginning of June 2013.
“Strate complied with international best practice before the Principles were drafted by CPSS-IOSCO and when these principles were published, they affirmed that we were on the right track. For example, we had a participant failure manual that was translated into other languages for other Financial Market Infrastructures. In addition, Strate strongly believes that we all have a responsibility to work with and educate the local market and our international counterparts as we are all interdependent and have an impact on one another,” said Singer.
