Banking Reform Bill Amendment on Payments and Securities Settlements

On 8th October the Financial Services (Banking Reform) Bill heads to the House of Lords for further consideration by their Lordships. Having listened to numerous opinions the Government has tabled more than 80 amendments which it proposes to add to The Bill.

One such amendment relates to payments and securities settlements.  This amendment, set out in a briefing note for Peers entitled “Payment and Settlement Systems Special Administration Regime” aims to establish a special regime “for the operators of systemically important inter-bank payment systems and securities settlement systems in the event of their insolvency, or threatened insolvency.”

Under the title of “financial market infrastructure” (FMI) the amendment would give courts powers to appoint an FMI administrator in the event of a settlement provider or key settlement service becoming, or likely to become, insolvent.  The FMI administrator would work under the direction of the Bank of England with a requirement to prioritise the continuation of settlement services.  This might include taking measures such as prioritising certain payment types (eg BACS or DD) over others, facilitating the early transfer of parts of the service to another organisation alongside restrictions on the early termination of third party contracts.

If you want to learn more about the latest trends in International Securities Settlements and Custodial Services you can attend a Eureka Financial course which provides delegates with practical knowledge about the key concepts, systems, processes and procedures in international securities settlement and custodial services as well as operational risks involved.


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