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ACSDA General Assembly 2013

ACSDA General Assembly 2013. CPSS-IOSCO Principles for Financial Market Infrastructure – Early experiences in self-assessment, disclosure, and parallels with other assessments : World Bank FSAP, AGC and Thomas Murray Theodore Rothschild J.P. Morgan, Chair – AGC Americas Focus Committee.

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ACSDA General Assembly 2013

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  1. ACSDA General Assembly 2013 CPSS-IOSCO Principles for Financial Market Infrastructure – Early experiences in self-assessment, disclosure, and parallels with other assessments: World Bank FSAP, AGC and Thomas Murray Theodore Rothschild J.P. Morgan, Chair – AGC Americas Focus Committee

  2. Regulation and Recommendation U.S. Securities and Exchange Commission (SEC) Investment Company Act Rule 17f-7.1 sets forth the circumstances under which U.S. investment companies may hold securities through the facilities of non-U.S. securities depositories. A key requirement of Rule 17f-7 is that an investment company must receive from its “Primary Custodian” an analysis of the custody risks associated with maintaining assets with each depository it uses. In the release announcing the adoption of the rule, the SEC stated: “As a general matter, we expect that an analysis will cover a depository's expertise and market reputation, the quality of its services, its financial strength, any insurance or indemnification arrangements, the extent and quality of regulation and independent examination of the depository, its standing in published ratings, its internal controls and other procedures for safeguarding investments, and any related legal protections.”

  3. Regulation and Recommendation (CPSS IOSCO) • Scope of the principles for FMIs • 1.19. The principles in this report provide guidance for addressing risks and efficiency in FMIs. With a few exceptions, the principles do not prescribe a specific tool or arrangement to achieve their requirements and allow for different means to satisfy a particular principle. Where appropriate, some principles establish a minimum requirement to help contain risks and provide for a level playing field. ....FMIs and their authorities should consider such best practices, as appropriate. In addition, authorities have the flexibility to consider imposing higher requirements for FMIs in their jurisdiction either on the basis of specific risks posed by an FMI or as a general policy.

  4. The AGC looks forward to leveraging the disclosures Market Infrastructures will publish confirming their observance of the principles – or their explanation of deviations, gaps and development plans. Self assessments and disclosures, when updated dynamically, should cover a salient portion of the expectations set forth in the SEC regulations. And substantially reduce the burden of endless questionnaires We do not expect the SEC to amend rule 17f-7; or clarify their expectations to limit the due diligence to review of CPSS IOSCO disclosures

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