CPMI and IOSCO Finalize PFMI Guidance on FMI General Business Risks

The Bank for International Settlements’ Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) on 14 October 2026 published a final report on financial market infrastructures’ (FMIs) management of general business risks and general business losses, setting out supplemental guidance to the CPMI-IOSCO Principles for financial market infrastructures (PFMI), according to a Bank for International Settlements media release.

The report, titled FMIs’ Management of General Business Risks and General Business Losses: Further Guidance to the PFMI and listed in the CPMI Papers series, sets out guidance for FMIs and relevant authorities, including in the context of FMIs’ recovery and orderly wind-down, on three areas: identifying, monitoring and managing general business risks; determining the minimum amount of liquid net assets funded by equity to be held against potential general business losses; and governance and transparency in managing general business risks. FMIs include payment systems, securities settlement systems, central securities depositories, central counterparties and trade repositories.

The final report builds on the consultative report on general business losses published in November 2025, and it takes into account the findings of the Level 3 assessment report on the implementation of PFMI Principle 15 on general business risk, which identified issues relating to FMIs’ management of general business risks and the liquid net assets funded by the equity they hold to cover potential losses. The committees also published the responses received during the consultation.

The consultative report defines general business losses as losses that are neither related to participant default nor separately covered by financial resources under the credit and liquidity risk principles. Such losses may arise from business risks related to the operation of an FMI as a business enterprise, and they may also arise from risks faced by the FMI related to other principles under the PFMI, for example legal risk under Principle 1, custody and investment risks under Principle 16 and operational risk under Principle 17. General business losses may be one-time or recurring. The guidance does not aim to introduce new standards, the document states, but rather to elaborate on principles already established in the PFMI, and it also takes into account prior CPMI-IOSCO work on central counterparty practices to address non-default losses.

The Principle 15 Standard the Guidance Supplements

The PFMI, issued by the CPMI and IOSCO on 16 April 2012, are the international standards for financial market infrastructures and part of a set of key standards that the international community considers essential to strengthening and preserving financial stability.

Principle 15 requires an FMI to identify, monitor and manage its general business risk and to hold sufficient liquid net assets funded by equity to cover potential general business losses so that it can continue operations and services as a going concern if those losses materialize. Liquid net assets should at all times be sufficient to ensure a recovery or orderly wind-down of critical operations and services. Under the principle’s key considerations, an FMI should have robust management and control systems to identify, monitor and manage general business risks, including losses from poor execution of business strategy, negative cash flows or unexpected and excessively large operating expenses. The amount of liquid net assets funded by equity an FMI should hold is determined by its general business risk profile and the length of time required to achieve a recovery or orderly wind-down of its critical operations and services.

At a minimum, an FMI should hold liquid net assets funded by equity equal to at least six months of current operating expenses. These assets are in addition to resources held to cover participant defaults or other risks covered under the financial resources principles, although equity held under international risk-based capital standards can be included where relevant and appropriate to avoid duplicate capital requirements. Assets held to cover general business risk should be of high quality and sufficiently liquid to allow the FMI to meet its current and projected operating expenses under a range of scenarios, including in adverse market conditions. An FMI should maintain a viable plan for raising additional equity should its equity fall close to or below the amount needed; the plan should be approved by the board of directors and updated regularly.

Level 3 Assessment Findings Behind the Report

The Level 3 assessment report, published on 7 November 2025, reviewed the implementation of Principle 15 at a sample of 34 FMIs from 27 jurisdictions, based on work carried out in 2023–24.

The assessment identified a number of serious issues of concern relating to: determining FMIs’ needs for liquid net assets funded by equity to cover potential losses arising from general business risk and for implementing plans for recovery and orderly wind-down; holding such assets in addition to resources held for risks other than general business risk; recovery and orderly wind-down planning for general business risk; and plans for raising additional equity in case of capital shortfalls. It also highlighted an issue of concern regarding the comprehensive identification, monitoring and management of sources of general business risk. Collectively, the report stated, the findings highlight clear challenges for FMIs’ resilience to different types of risk that could result in general business losses and “should be addressed with the highest priority.” The assessment separately recorded observations on differences in implementation outcomes across FMIs, rather than consistency with the PFMI, that could result in material differences in resilience across FMIs.

The CPMI and IOSCO published the assessment report and the consultative report together on 7 November 2025, according to the companion media release, with comments on the proposed guidance due by 6 February 2026 to both the CPMI and IOSCO secretariats.

The published responses came from B3 S.A., CCP Global, CLS, CME Group, Deutsche Börse Group, DTCC, EBA CLEARING, the European Association of CCP Clearing Houses, the European Central Securities Depositories Association, ISDA and FIA, LINK, the Options Clearing Corporation and the World Federation of Exchanges. CPMI and IOSCO said they appreciated the thorough responses and engagement received from respondents.