Financial market infrastructures (FMIs) allow the clearing, settlement, and recording of financial transactions. They enable millions of transactions to take place each day. Find out more in our short guide.
We supervise certain types of FMIs. These are:
Our role is to protect and enhance financial stability in the UK. We supervise FMIs because they are a vital part of the UK’s financial system and its wider economy.
For example, payment systems allow customers and businesses to buy and sell things. People also rely on them to get their wages or benefits.
Central securities depositories enable shares and bonds to be held or sold. And central counterparties guarantee a transaction will be honoured if a party defaults on a trade.
We supervise certain financial market infrastructures that are based in, or operate in, the UK.
The Bank has authorised these UK central counterparties (CCPs):
Some central counterparties that are not based in the UK are allowed to offer clearing services in the UK until the end of 2025 under the Transitional Regime (TR).
Read a list of CCPs in the TR.
The Bank has recognised these non-UK central counterparties (CCPs):
We have authorised the following central securities depositories (CSDs):
Some CSDs that are not based in the UK can offer services in the UK until they are permanently recognised under the Transitional Regime (TR).
Read a list of the CSDs in the transitional regime.
The Bank has recognised these non-UK central securities depositories (CSDs)
We have designated the following systems designated under the Settlement Finality Regulations:
Some systems in the European Economic Area (EEA) have temporary UK settlement finality protection under the Temporary Designation Regime (TDR) of the Financial Markets and Insolvency (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (as amended) until they receive ‘steady state’ designation. Non-EEA systems can also apply for designation.
Read a list of EEA law systems in the TDR. At present there are no other designated systems.
We recognise the following operators under the Uncertified Securities Regulations:
We have published a list of central banks notified to HM Treasury as receiving settlement finality protection for securities held as collateral security pursuant to The Settlement Finality Regulations.
We set out our approach to supervision across three publications:
We also publish annual reports on our regulation of FMIs and these contain information about updates to our supervisory approach.
We use the CPMI-IOSCO Principles for financial market infrastructures as an international benchmark for our standards.
There are different legal regimes for central securities depositories, CCPs, payment systems and systems designated under the Settlement Finality Regulations. Some FMIs may have requirements under more than one regime.
We work with domestic and overseas regulators to supervise FMIs.
We have a memorandum of understanding with the FCA on supervising FMIs. We also have a MoU with the FCA, PSR and PRA that covers the supervision of payment systems.
We have MoUs with relevant home authorities as part of our supervision of recognised non-UK FMIs. See the Governance and funding page.
On 13 November 2017, the Bank of England started to deliver the CHAPS service.
Our Financial Market Infrastructure Directorate supervises this work. We expect the same standards of it as any other systemically important payment scheme.
Central securities depositories must meet the requirements of the Uncertificated Securities Regulations 2001 (as amended) as operators in order to operate a system supporting the electronic transfer of titles to UK securities.
Central securities depositories are also regulated under Part 18 of the Financial Services and Markets Act 2000 (FSMA) as recognised central securities depositories.
They must comply with the requirements and obligations set out in Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories (the Central Securities Depositories Regulation (CSDR)). CSDR has been onshored and amended by:
Central securities depositories may also be regulated under the Banking Act 2009 if the payment arrangements supporting it constitute a recognised payment system.
We have published a Policy Statement and a Supervisory Statement on the Bank of England’s operational resilience expectations for Central Securities Depositories.
In September 2021, the Bank sent a letter to central securities depositories on existing supervisory expectations in relation to material outsourcing arrangements, including the use of public cloud.
Recognised clearing houses and central counterparties (CCPs) are regulated under Part 18 of the Financial Services and Markets Act and are subject to the recognition requirement regulations in the Act.
Recognised clearing houses that are CCPs must comply with the requirements and obligations set out in Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (European Market Infrastructure Regulation (EMIR)). EMIR has been onshored and amended by:
They must also comply with the rules for recognised CCPs set by the Bank of England.
Part VII (Financial Markets and Insolvency) of the Companies Act 1989 also imposes certain obligations on recognised bodies (i.e recognised CSD and recognised clearing house), including the requirement to give the Bank of England notice of any proposal to amend, revoke or add to their default rules, and report on the completion of default procedures.
Recognised Clearing House Rules (RCH 1, 2 and 3)
Recognised Clearing House Rules Instrument 2018 (RCH 4)
Financial Services Authority - PS12/13
We have published a Policy Statement and a Supervisory Statement on the Bank’s operational resilience expectations for Central Counterparties (CCPs)
In September 2021, the Bank sent a letter to central counterparties on existing supervisory expectations in relation to material outsourcing arrangements, including the use of public cloud.
For recognised payment systems, we have adopted the global standards drawn up by central banks and securities market regulators in the CPSS/IOSCO principles for financial market infrastructure as principles.
We have also published a code of practice on governance and a Policy Statement, Supervisory Statement and operational resilience chapter of the Code of Practice for some Recognised Payment System Operators (RPSOs) and Specified Service Providers (SSPs).
In September 2021, the Bank sent a letter to Recognised Payment System Operators (RPSOs) and Specified Service Providers (SSPs) on existing supervisory expectations in relation to material outsourcing arrangements, including the use of public cloud.
Financial penalties we impose under the Financial Services and Markets Act 2000 or under Part 5 of the Banking Act 2009.
The Settlement Finality Regulations allow payment and settlement systems to apply for certain protections against normal insolvency law in respect of transfers through their systems. To receive these protections, systems must meet the criteria set out in the regulations and be designated by the relevant authority.
In June 2021, the Bank published a Discussion Paper setting out its proposed framework for Supervisory Stress Testing of CCPs. In October 2022, the Bank published the results report for its first public CCP supervisory stress test exercise, the 2021-22 CCP SST. In November 2023, the Bank published the results report for its second CCP Supervisory Stress Test exercise, the 2023 CCP SST. Further details on the Bank’s CCP supervisory stress testing are available at Stress testing.
We have published information on how non-UK FMIs may apply to become a recognised FMI and receive UK settlement finality protection.
Payment systems need to contact HM Treasury (HMT) to discuss recognition.
HMT has published a guidance note on the recognition process.
A firm must apply to us it if it intends to provide CCP Services in the UK. Onshored and amended Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (European Market Infrastructure Regulation (EMIR)) and the associated Regulatory Technical Standards (RTS) lay down the requirements an applicant must meet and information that must accompany the application.
Prospective applicants may wish to contact us at an early stage for advice on the practical aspects of an application.
There is no standard application form for recognition as a recognised clearing house that is not a central counterparty (CCP). Section 288 of the Financial Services and Markets Act specifies some details of what must accompany an application. Prospective applicants should contact the Bank of England at an early stage for advice.
There is no standard application form for overseas CCPs seeking a recognition order under 170B of the Companies Act 1989. Prospective applicants should contact us at an early stage for advice.
Firms wishing to become a recognised overseas clearing house should contact us at an early stage for advice. Firms can no longer apply for recognised overseas clearing house status if they are a CCP.
A UK firm must apply to us to be a recognised CSD under the onshored Regulation (EU) No 909/2014 of the European Parliament and the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories (as amended) ( UK CSDR), if it intends to provide CSD services in the UK.
UK CSDR and the associated Regulatory Technical Standards (RTS) lay down the requirements an applicant must meet and information that must accompany the application.
Prospective applicants may wish to contact us at an early stage for advice on the practical aspects of an application.
UK law systems (e.g. payment and securities settlement systems) can apply for settlement finality designation and receive settlement finality protections against the operation of the UK insolvency law under the Financial Markets and Insolvency (Settlement Finality) Regulations 1999 (as amended). The SFRs seek to reduce the risks associated with participation in these UK law systems by minimising the disruption caused by insolvency proceedings brought against a participant in such a system.
To receive these protections, systems must meet the criteria set out in the SFRs and be designated by the relevant authority, which is the Bank of England for all entities other than recognised investment exchanges.
There are different application processes for different types of FMI. UK law private systems should contact us directly by emailing SFD-Enquiries@bankofengland.co.uk.
Under article 31 of the European Market Infrastructure Regulation (EMIR) as onshored, those proposing to directly or indirectly dispose of, acquire or increase their qualifying holding in a UK CCP must first notify the Bank of England (the Bank).
Anyone who fails to comply with this obligation or who provides information to the Bank which is false in a material particular is guilty of a criminal offence under Regulation 15 of the Financial Services and Markets Act (Over the Counter Derivatives, Central Counterparties and Trade Repositories) Regulations 2013 (SI/2013/504).
Anyone proposing to dispose, directly or indirectly, of a qualifying holding in a UK CCP is required to notify us in writing before making the disposal. They are also required to notify us of a decision to reduce a qualifying holding so that the proportion of the voting rights or of the capital held would fall below 10%, 20%, 30% or 50%, or so that the CCP would cease to be their subsidiary.
You must send these details by email to FMIInformation@bankofengland.co.uk.
The email should include:
Anyone who wishes to acquire or increase, directly or indirectly, their qualifying holding in a UK CCP or to further increase such a qualifying holding with the result that their voting rights or capital held reaches or exceeds 10%, 20%, 30% or 50%, or so that the CCP would become their subsidiary, must first contact the Bank of England for approval.
If the proposed acquirer is not a body corporate, please contact us by email at FMIInformation@bankofengland.co.uk to discuss the form of the notification.
We have a pre-notification stage which is designed to help those proposing to acquire or increase a qualifying holding in a CCP to understand the process and to submit a complete application.
We recommend that you contact us at FMIInformation@bankofengland.co.uk to discuss whether a pre-notification meeting is necessary. You can submit a notification without contacting us first, but this increases the likelihood of your application being incomplete.
To notify us, email a copy of the acquisition notification form and your supporting documents to FMIInformation@bankofengland.co.uk and send two hard copies to:
The Director, Financial Market Infrastructure Directorate, Bank of England, 20 Moorgate, London EC2R 6DA.
The Central Securities Depositories Regulation (CSDR) (as onshored) introduces a requirement that firms that carry out settlement activity outside central securities depositories (CSDs) report data quarterly on this activity to the Bank of England. This requirement, which is contained in Article 9 of the legislation, applied as of July 2019.
This is likely to be relevant for firms having either, or both, of the following regulatory permissions, specified in Article 40 of the Regulated Activities Order, which are more relevant to carrying out settlement internalisation activities:
Following the end of transitional relief under the temporary transitional power (TTP) on 31 March 2022, the settlement internalisation reporting obligation now applies to UK branches of EEA firms. If you think your firm will need to report settlement internalisation activity, please email InternalisedSettleme@bankofengland.co.uk.
Details about the timeline following the end of the TTP and the onboarding process for internalised settlement reporting are available below.
Financial market infrastructures are critical to a stable financial system. Systems should contact their supervisors in the first instance if they have any issues.
The purpose of the industry insolvency protocol is to promote a clearer understanding of the regime (set out in Part VII of the Companies Act 1989) and the responsibilities of central counterparties (CCPs) and insolvency practitioners (IPs) in the event of a default in relation to an insolvent clearing member.
The protocol is non-binding and sets out the mutual understanding of the IPs and CCPs as to procedures that they consider would be desirable to be followed in such a default event.
The protocol includes:
The protocol is relevant for participants in central clearing including:
Guidance on recognised clearing houses for insolvency practitioners
Whistleblowing is when someone reports suspected wrongdoing at work. You can make whistleblowing disclosures about financial market infrastructures to the Bank of England.
To make a disclosure, email whistleblowing@bankofengland.co.uk or telephone +44 (0)20 3461 8703 or write to Bank of England (Legal Directorate - IAWB), Threadneedle Street, London, EC2R 8AH.
