Advisory Group on Market Infrastructures

Advisory Group on Market Infrastructures
Name	Advisory Group on Market Infrastructures
Founded	2009
Headquarters	Basel
Parent organization	Committee on Payments and Market Infrastructures
Region served	International

Contents

Advisory Group on Market Infrastructures is a technical advisory body formed to provide expert guidance on systemic risk mitigation for financial market infrastructures and to advise central banks, supervisory authorities, and standard-setting bodies on settlement, clearing, and payment arrangements. The group has interacted with institutions such as the Bank for International Settlements, International Monetary Fund, World Bank, European Central Bank and Financial Stability Board to align cross-border policy, systemic resilience, and operational standards across payment, clearing and settlement systems. It has informed policy debates involving G20, Basel Committee on Banking Supervision and International Organization of Securities Commissions on infrastructure reform.

History

The Advisory Group emerged in the aftermath of the 2007–2008 financial crisis and the Great Recession when regulators such as the Bank of England, Federal Reserve System, Deutsche Bundesbank and Banque de France sought coordinated responses for market stability. Early precursors include working parties convened by the Committee on Payment and Settlement Systems and consultations involving the European Securities and Markets Authority and the United States Securities and Exchange Commission. Key milestones involved contributions to global initiatives led by the 2009 G20 Summit and follow-up accords like the Basel III reforms and the Dodd–Frank Act implementation debates. Membership and chairs rotated among experts from the Bank for International Settlements, International Swaps and Derivatives Association, Chicago Mercantile Exchange, and central bank research units such as those at the Swiss National Bank and Bank of Japan.

The Advisory Group's mandate included advising the Committee on Payments and Market Infrastructures and coordinating with international bodies including the Financial Stability Board, International Monetary Fund, World Bank Group, and Organisation for Economic Co-operation and Development on standards for central counterparties, payment systems, and securities settlement systems. Core functions comprised drafting policy papers, reviewing resilience frameworks promoted by the Basel Committee on Banking Supervision, assessing prudential implications for institutions subject to Dodd–Frank Act derivatives rules, and recommending interoperability principles aligned with tracks by the European Central Bank TARGET2-Securities discussions. The group worked on harmonizing standards referenced in instruments like the Principles for Financial Market Infrastructures and advised on cross-border resolution aspects intertwined with initiatives by the Bank Recovery and Resolution Directive and Financial Stability Board resolution planning.

Structurally, the Advisory Group reported technical findings to the Committee on Payments and Market Infrastructures and liaised with the Financial Stability Board secretariat, while incorporating experts seconded from central banks such as the Federal Reserve Bank of New York, Bank of Canada, Reserve Bank of Australia, and supervisory agencies like the Prudential Regulation Authority and the Commodity Futures Trading Commission. It organized working streams mirroring thematic areas tackled by institutions like the International Swaps and Derivatives Association, European Central Bank, and World Bank technical units, and convened task forces with participants from infrastructure operators including the London Stock Exchange, Intercontinental Exchange, Deutsche Börse, and SIX Group. Secretariat support drew on the Bank for International Settlements infrastructure while stakeholder consultations included representatives from the International Organization of Securities Commissions, Association of National Numbering Agencies, and market associations such as the Institute of International Finance.

Major outputs influenced by the Advisory Group encompassed reports and guidance on central clearing shifts promoted after the 2011 G20 commitments, interoperability frameworks similar to proposals discussed by the European Central Bank and the Bank for International Settlements, and recommendations that fed into the Principles for Financial Market Infrastructures implementation. Documents addressed liquidity stress testing approaches related to frameworks from the Basel Committee on Banking Supervision and operational resilience metrics debated in forums like the Financial Stability Board and International Monetary Fund vulnerability exercises. The group issued guidance paralleling work by the International Organization of Securities Commissions on settlement fails, and produced white papers that informed legislative and regulatory actions linked to the Dodd–Frank Act, Markets in Financial Instruments Directive (MiFID II), and regional clearing mandates in jurisdictions such as the European Union.

Recommendations contributed to harmonization efforts among the Basel Committee on Banking Supervision, Financial Stability Board, and International Monetary Fund on capital, margin, and interoperability standards that shaped central counterparty requirements globally. The Advisory Group's work affected policy adoption by authorities including the European Central Bank, Federal Reserve System, People's Bank of China, Reserve Bank of India, and influenced market infrastructure design at operators like CLS Group, Euroclear, and DTCC. Its technical advice underpinned cross-border crisis management protocols resonant with Financial Stability Board resolution planning and informed statistical and supervisory exercises run by the Bank for International Settlements and International Monetary Fund financial sector assessments.

Critiques targeted perceived industry influence through secondments from entities such as the International Swaps and Derivatives Association, Chicago Mercantile Exchange, and Intercontinental Exchange, and concerns raised by academic commentators associated with London School of Economics, Massachusetts Institute of Technology, and Harvard University about conflicts of interest. Some policymakers in forums like the European Parliament and commentators at the International Monetary Fund and World Bank flagged that recommendations sometimes prioritized operational continuity over competition considerations emphasized by antitrust bodies such as the European Commission and United States Department of Justice. Debates also surfaced over the pace of reform after the 2007–2008 financial crisis and the balance between central clearing mandates shaped by the Dodd–Frank Act and regional equivalents, with scrutiny from think tanks such as the Brookings Institution and Peterson Institute for International Economics.