Oversight over systemically important financial market infrastructures and central counterparties
The Bank of Russia oversees non-bank credit institutions — central counterparties (NCI CCs) and such systemically important financial market infrastructures (SIFMIs) as:
- systemically important central depositories;
- systemically important settlement depositories;
- systemically important repositories; and
- systemically important payment systems.
Specifically, the Bank of Russia:
- monitors SIFMIs’ and NCI CCs’ activities at regular intervals;
- analyses SIFMIs’ and NCI CCs’ risk management, business continuity, operational reliability and corporate governance systems, as well as business practices;
- assesses and carries out stress testing of SIFMIs’ and NCI CCs’ risks;
- assesses and analyses SIFMIs and NCI CCs for their compliance with international standards established for financial market infrastructures, as well as prepares recommendations on enhancing their activities, when needed;
- carries out qualitative and quantitative analysis of SIFMIs’ and NCI CCs’ current financial position and the external environment (participants, counterparties, the regulatory environment, and geopolitical factors); and
- identifies potential threats (risks) in SIFMIs’ and NCI CCs’ activities (carries out comprehensive analysis of SIFMIs’ and NCI CCs’ risks).
Today, two infrastructures are recognised as systemically important:
- National Settlement Depository (NSD), which is a central depository, a settlement depository, a repository, and a payment system; and
- Central Counterparty National Clearing Centre (CCP NCC), which is a central counterparty.
The assessment and stress testing of the risks of these two organisations carried out by the Bank of Russia in 2019 identified no threats to their financial resilience: overall, risks were assessed as low, and the organisations passed the stress testing successfully. The indicators of business continuity (hardware and software fault tolerance and the time needed to restore hardware and software operation) prove a high level of the organisation of SIFMIs’ business continuity systems.