Payment systems and market infrastructures

Conduct of oversight activities

The smooth functioning of market infrastructures and payment systems is essential for the economy: it contributes to financial stability and to user confidence in the currency, as well as enabling the proper implementation of monetary policy.

The Banque de France has a broad remit in the oversight of market infrastructures (systems for the clearing and settlement of financial instruments) and payment systems.

The Banque de France's oversight mission, which is defined by French law and by the Treaty on the Functioning of the European Union, consists in:

• ensuring the smooth operation and security of payment systems
• ensuring the security of financial instrument clearing and settlement systems

The Banque de France oversees the financial market infrastructures under its jurisdiction and participates in the system of cooperative oversight of several European and international infrastructures.

The Banque de France also helps to draw up guidelines and standards applicable to financial market infrastructures.

Oversight of cyber risk

This is based on the Guidance on cyber resilience for financial market infrastructures published by the CPMI and IOSCO in 2016 to set out supervisors' expectations in this area in more detail. It complements the general expectations on operational risk management (see Principles for Financial Market Infrastructures (PFMI) published in 2012). These recommendations on the cyber resilience of financial market infrastructures are broken down into eight categories:

1. governance
2. risk identification
3. protection
4. detection
5. response and recovery
6. testing
7. situational awareness
8. learning and evolving

The aim is to provide a methodological approach and tools to enable financial market infrastructures to enhance their resilience to cyber threats.

From the start of 2025, these recommendations ("soft law") will be replaced by the provisions of the European DORA regulation on digital operational resilience for the financial sector ("hard law"), adopted at the end of 2022. The delegated acts pursuant to DORA, which set out procedures for implementing the regulation, are currently being prepared.

Composition of LCH SA's EMIR College 

The European regulation governing central counterparties (the European Market Infrastructure Regulation or EMIR) provides for the establishment of European supervisory colleges by the competent national authorities. The colleges must be comprised of the European Securities and Markets Authority (ESMA), the central banks of issue of the currency used by the central counterparty (CCP), and any competent EU national authority with a direct interest in the smooth operation of the CCP (for example, the authorities that supervise the main participating banks).

In 2023, LCH SA's College was made up of 19 national authorities from 11 jurisdictions. Colleges ensure the exchange of information between authorities. They also have the power to validate important decisions made by CCPs that could have cross-border effects.

Monitoring of developments in market infrastructures

Market infrastructures are part of a rapidly changing environment in which European and international bodies are working to establish common practices to facilitate payments, securities settlement and related operations. The Banque de France is closely involved in projects to enhance the efficiency and robustness of the Eurosystem, such as the adoption of European norms and standards. It also participates actively in work to promote cross-border payments, notably the G20 Roadmap for Enhancing Cross-border Payments.