Regulatory Alerts2023-07-31
FMI Standard 16: Custody and Investment Risks
The Reserve Bank of New Zealand and the Financial Markets Authority jointly issued FMI Standard 16 to mandate that designated Financial Market Infrastructure operators safeguard participant assets and minimize loss risks. The standard requires operators to utilize custodians with robust internal systems, ensure prompt access to assets, and evaluate custodian exposures comprehensively. Additionally, operators must implement an investment strategy focused on high-quality, liquid instruments that aligns with their overall risk management framework and is fully disclosed to participants.
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