Dear Mr. Moloney and Mr. Ward,
The Institute of International Finance (IIFi), the Global Financial Markets Association (GFMAii), and the Bank Policy Institute (BPIiii) (collectively “the Associations”) welcome the opportunity to respond to the consultation report of the International Organization of Securities Commissions (IOSCO) on “Operational resilience of trading venues and market intermediaries during the COVID-19 pandemic.”
Operational resilience is extremely important for both the public and private sectors to maintain confidence in the financial industry and to support financial stability and economic growth. The Associations and their members acknowledge the importance of operational resilience for individual institutions, and across the financial sector, in support of customers, markets and the communities and broader economies they support domestically and globally. This consultation by IOSCO is especially welcome because operational resilience has more recently come into even greater focus due to the impact of the COVID-19 pandemic.
Our members recognize and appreciate the efforts towards global coordination and alignment among policymakers and financial authorities on policy outcomes, terminology, and supervisory approaches. Therefore, the Associations appreciate that IOSCO is considering aligning its own definition of operational resilience with that found in the Basel Committee on Banking Supervision (BCBS) Principles for Operational Resilience and we strongly encourage IOSCO to adopt a definition that is aligned with the BCBS.
The Associations continue to be closely engaged with global standard-setters – including the BCBS, the Committee on Payments and Market Infrastructures (CPMI), the Financial Stability Board (FSB), the International Association of Insurance Supervisors (IAIS), and IOSCO – and key jurisdictional authorities to encourage close and consistent coordination around this evolving discipline. The Associations have been working together on this topic for nearly four years with our financial institution members, through a joint global Operational Resilience Steering Committee, to ensure that the industry is also closely aligned.
The potential for fragmentation due to divergences in regulatory standards and supervisory oversight poses substantial risks and operational challenges for financial services firms that operate across multiple jurisdictions and, in turn, for the strength and operational resilience of the financial system. We therefore fully support and appreciate any efforts that IOSCO can make to align its work in this area to the proposed approach of the BCBS.
We would welcome further information about IOSCO’s planned work program in the area of operational resilience, and our member firms stand ready to contribute to IOSCO’s work as appropriate.
To read the full comment letter click here, or click on the download button below.
 IOSCO 2022. “Operational resilience of trading venues and market intermediaries during the COVID-19 pandemic” (January).