Financial Market Infrastructures Standards issued – Reserve Bank of New Zealand – Te Pūtea Matua

FMIs are multilateral systems (such as payments systems and central counterparties) that enable electronic payments and financial market transactions and are therefore essential for the day-to-day operation of the financial system and economy.

Deputy Governor Christian Hawkesby says although FMIs play a critical role in our financial system, most New Zealanders will not be aware of them because banks and other financial sector institutions provide the direct interface with customers.

“Most of us don’t think about the underlying infrastructures we rely on for daily economic life, but we can be severely impacted when something goes wrong. If a designated FMI failed or encountered problems, electronic payments and financial market transactions could be severely disrupted. This in turn could have flow-on impacts for New Zealanders, our financial system and the wider economy.”

Public consultations to inform the development of the FMI Standards were held in July 2021 and September 2022. Feedback was largely supportive of the approach to closely follow international practice (the Principles for Financial Market Infrastructures) and included useful technical suggestions, which have been reflected in the issued FMI Standards.

The FMI Standards come into effect from 1 March 2024 and support the implementation of the FMI Act, which is a comprehensive regulatory regime for designated FMIs.

“The issuance of FMI Standards and completing work to fully implement the FMI Act will help ensure that financial market infrastructures remain robust and operate smoothly in the background,” Mr Hawkesby says.

FMA Executive Director for Regulatory Delivery, Clare Bolingford says issuing the FMI Standards is a significant milestone and the culmination of several years’ work with the sector.

“We thank everyone who contributed to the development of the Standards which align with international best practice while reflecting the specific characteristics here in New Zealand,” Ms Bolingford says.

The FMI Standards include 28 Standards plus detailed accompanying guidance and a framework for the regulation of overseas FMIs. The 28 Standards set out a comprehensive set of requirements for operators of systemically important FMIs and operators of FMIs who apply for designation status.