Regulatory Alerts2023-07-31
FMI Standard 9: Money Settlements
Issued by the Reserve Bank of New Zealand and the Financial Markets Authority under the Financial Market Infrastructures Act 2021, this standard mandates that designated financial market infrastructure operators conduct money settlements in central bank currency wherever reasonable and available to mitigate credit and liquidity risks. Where commercial bank money is unavoidable, operators must strictly monitor and limit associated risks by enforcing rigorous eligibility criteria for settlement banks, controlling exposure concentration, and ensuring contractually guaranteed finality and prompt fund transferability. The requirements apply to pure payment systems, securities settlement systems, and central counterparties, taking effect on 1 March 2024.