Financial market infrastructure

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Brussels head office of Euroclear, a major international financial market infrastructure Brussels - Euroclear HQ.jpg
Brussels head office of Euroclear, a major international financial market infrastructure

Financial market infrastructure refers to systems and entities involved in clearing, settlement, and the recording of payments, securities, derivatives, and other financial transactions. [1] Depending on context, financial market infrastructure may refer to the category in general, or to individual companies or entities (thus also used in plural: financial market infrastructures).

Contents

Examples

Examples of financial market infrastructure firms include payment systems, securities settlement systems, central securities depositories, central counterparties, and trade repositories. [1]

Some financial infrastructures have a global reach, such as financial messaging service SWIFT, foreign-exchange settlement service provider CLS Group, and international central securities depositories Euroclear and Clearstream. [2]

Other major commercial financial infrastructure firms include:

Financial trading venues such as stock exchanges, futures exchanges, commodities exchanges and electronic trading platforms, are not always considered financial market infrastructures where they are subject to competition, but are included in the definition of financial market infrastructures in certain jurisdictions such as Switzerland. [6] Many exchanges are subsidiaries of financial infrastructure groups such as CME Group, Deutsche Börse, Euronext, Hong Kong Exchanges and Clearing, Intercontinental Exchange, Japan Exchange Group, London Stock Exchange Group, Nasdaq, Inc., Singapore Exchange, and SIX Swiss Exchange.

Some financial infrastructures are directly operated by central banks, including a number of Real-time gross settlement (RTGS) systems such as T2 in the euro area, CHAPS in the United Kingdom, and Fedwire in the U.S. Other central bank-operated infrastructures include the China Foreign Exchange Trade System (CFETS) in China. [7]

Regulation

Financial market infrastructures, many of which are natural monopolies, are typically of critical systemic importance and thus heavily regulated and supervised. At the global level, the applicable standards are the Principles for Financial Market Infrastructures (PFMI) jointly issued by the Committee on Payments and Market Infrastructures (CPMI) and International Organization of Securities Commissions (IOSCO). [8]

See also

Notes

  1. 1 2 "Supervision & Oversight of Financial Market Infrastructures". Board of Governors of the Federal Reserve System.
  2. "What is a CSD?". European Central Securities Depositories Association ECSDA.
  3. "Brief Introduction of CCDC and Its Shanghai Branch". Shanghai Municipal People's Government. 18 July 2023.
  4. "Brief Introduction of Shanghai Clearing House". Shanghai Municipal People's Government. 18 July 2023.
  5. "What is China's Swift equivalent and what are its origins?". South China Morning Post. 2022-02-28. Retrieved 2022-03-03.
  6. "Financial market infrastructures and foreign market participants". FINMA.
  7. "Brief Introduction of China Foreign Exchange Trade System". Shanghai Municipal People's Government. 18 July 2023.
  8. "Principles for Financial Market Infrastructures (PFMI)". Bank for International Settlements. September 2014.


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The Depository Trust & Clearing Corporation (DTCC) is an American financial market infrastructure company that provides clearing, settlement and trade reporting services to financial market participants. It performs the exchange of securities on behalf of buyers and sellers and functions as a central securities depository by providing central custody of securities.

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<span class="mw-page-title-main">Euroclear</span> Belgium-based financial services company

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<span class="mw-page-title-main">Options Clearing Corporation</span> Financial services business

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<span class="mw-page-title-main">Moscow Exchange</span> Stock exchange in Moscow, Russia

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The National Settlement Depository (NSD), headquartered in Moscow, is a Russian non-bank financial institution and central securities depository (CSD). It provides depository, settlement, and related services to financial market entities. Its services cover both securities listed in Russia's 2011 Federal Law "On the Central Securities Depository", and other Russian and foreign equity and debt securities. NSD is the CSD of the Russian Federation, and was assigned CSD status by the Russian Federal Financial Markets Service in 2012. It is the largest securities depository in Russia by market value of equity and debt securities held in custody, which in June 2022 were 70 trillion roubles. It is a member of the Moscow Exchange Group. In March 2022, in the wake of the 2022 Russian invasion of Ukraine, NSD's accounts were blocked and frozen at international CSDs Euroclear and Clearstream. In addition, the European Union added NSD to its sanctions list, blocking NSD's accounts in euros, and in Euroclear and Clearstream; as a result, NSD could not service forex-denominated bonds issued by Russia and Russian companies. NSD suspended transactions in euros.

<span class="mw-page-title-main">Securities market participants (United States)</span>

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<span class="mw-page-title-main">China Foreign Exchange Trade System</span> Financial infrastructure in China

The China Foreign Exchange Trade System, also known as National Interbank Funding Center, is a financial market infrastructure and electronic trading platform in China, established in 1994 under the People's Bank of China (PBoC) and established in Shanghai. It provides a major trading platform and pricing center for renminbi and foreign exchange-related products. CFETS is the trading platform of the China Interbank Bond Market and participates in China's policy of internationalization of the renminbi. It is supervised by the PBoC.

<span class="mw-page-title-main">Shanghai Clearing House</span> Financial infrastructure in China

The Shanghai Clearing House, formally the Inter-bank Market Clearing House Co., Ltd., is a significant central counterparty and central securities depository in China, established in 2009 in Shanghai.