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This document summarises the responses to the consultation and outlines the government’s response. The statutory instrument for the FMI administration rules will be laid before Parliament shortly.
In 2013, the Financial Services (Banking Reform) Act 2013 (‘the 2013 Act’) introduced a form of special administration for certain financial market infrastructure (FMI) companies operating payment and/or security settlement systems (but excluding recognised CCPs). That procedure is FMI administration. Systemically important payment and securities settlement services are vital to the efficient operation of the financial system. Any suspension of service provision is likely to cause a severe disruption to the functioning of the wider financial sector and the real economy. FMI administration was introduced to mitigate the risk of such disruption occurring due to the insolvency of an FMI company. The objective of FMI administration is the continuity of systemically important payment and securities settlement services in the event of a failure.
This consultation seeks views on the rules that are needed, including modifications of general insolvency rules, to ensure the effective functioning of an FMI administration.
Following consultation on the rules, the government plans to bring the provisions relating to FMI administration into force at the same time as the FMI administration rules.