The European Union’s framework for systemically important payment systems (PSs) and central securities depositories/securities settlement systems (CSDs/SSSs) has been deemed complete and consistent with the Principles for Financial Market Infrastructures (PFMI), according to a recent report by the Committee on Payments and Market Infrastructures (CPMI) as well as the International Organization of Securities Commissions (IOSCO).
Released on April 28, 2025, the Implementation Monitoring of PFMI: Level 2 Assessment Report for the EU – PSs and CSDs/SSSs evaluates the legal, regulatory, and oversight frameworks in place as of October 30, 2019.
While the assessment highlights strong alignment with global standards, it also identifies areas for improvement, particularly in risk management and governance.
The PFMI, established by CPMI and IOSCO, provides a global benchmark for the design, operation, and oversight of financial market infrastructures (FMIs) to ensure their stability and resilience.
These infrastructures, including PSs and CSDs/SSSs, are critical to the functioning of financial markets, facilitating the transfer, clearing, and settlement of financial transactions.
The EU’s commitment to implementing these principles underscores its efforts to maintain robust and reliable financial systems.
The report finds that the EU’s framework for PSs is fully consistent with all PFMI principles, reflecting a comprehensive and well-implemented regulatory structure.
For CSDs/SSSs, the framework is largely consistent, with complete adherence in most areas.
However, the assessment notes inconsistencies in certain principles, particularly those related to risk management and governance.
In these areas, implementation was rated as broadly consistent, partly consistent, or not consistent, signaling the need for targeted improvements to align fully with global standards.
The assessment reflects the EU’s complex regulatory landscape, which includes distinct frameworks for PSs in the euro area and Sweden, as well as a separate EU-wide regime for CSDs/SSSs.
Each of these frameworks was evaluated independently to ensure a thorough analysis.
The report does not account for regulatory developments after October 2019, meaning subsequent reforms are not reflected in the findings.
Notably, the United Kingdom, which was part of the EU at the time of the assessment, was excluded from this review.
CPMI-IOSCO opted to conduct a separate Level 2 assessment for the UK due to its unique regulatory context following its departure from the EU.
This decision ensures a tailored evaluation of the UK’s framework, with results to be published separately.
The report builds on prior CPMI-IOSCO assessments, such as the 2015 evaluation of EU central counterparties and trade repositories, demonstrating ongoing efforts to monitor and enhance the EU’s financial market infrastructures.
The identified gaps, particularly in risk and governance, provide a roadmap for regulators to strengthen oversight and ensure greater resilience in FMIs.
As financial markets evolve, addressing these inconsistencies will be crucial for maintaining the EU’s position as a key player focused on financial stability.
The research findings encourage continued collaboration between EU authorities and global standard-setters to refine frameworks and adapt to emerging challenges, ensuring that PSs and CSDs/SSSs remain key pillars of the financial system.