SFC issues guidelines on CPSS-IOSCO Principles for financial market infrastructures

9 Aug 2013

The Securities and Futures Commission (SFC) today issued a set of guidelines for recognized clearing houses concerning the application of the “Principles for financial market infrastructures” (PFMIs) published jointly by the Committee on Payment and Settlement Systems (CPSS) of the Bank for International Settlements and the International Organization of Securities Commissions (IOSCO) (Notes 1 & 2).

The PFMIs, issued in April 2012, are designed to ensure that financial market infrastructures supporting global financial markets are robust and well placed to withstand financial shocks. These principles apply to all systemically important financial market infrastructures (FMIs).

The SFC regards all recognized clearing houses as systemically important FMIs in Hong Kong. The guidelines articulate that the SFC expects recognized clearing houses to observe the PFMIs. Such observance will be taken into account in assessing whether recognized clearing houses have discharged their duties under the Securities and Futures Ordinance (SFO).

"FMIs such as central counterparties play an important role in fostering stability in the financial system. The significance of that role is underscored by the new global regulatory requirement that mandates central clearing of standardised OTC derivatives trades. It is therefore critical that systemically important FMIs in Hong Kong are properly supervised and managed," the SFC’s Chief Executive Officer Mr Ashley Alder said.

"The application of the new and more demanding standards provide a good basis to ensure that systemically important FMIs in Hong Kong are safe and resilient," Mr Alder also said.

The SFC will discuss with existing recognized clearing houses to determine an appropriate implementation timeline for the observance of the PFMIs. The guidelines, issued pursuant to section 399 of the SFO, are available on the SFC website.



  1. Financial market infrastructures (FMIs) is defined as a system that facilitates the clearing, settling, or recording of payments, securities, derivatives or other financial transactions. There are five major types of FMIs: payment systems, central securities depositories, securities settlement systems, central counterparties and trade repositories.
  2. Please see HKMA and SFC joint press release dated 28 March 2013 on their commitment to implement the PFMIs within their respective regulatory frameworks through regulatory guidelines.

Page last updated : 12 Nov 2013