UK Regulators Confirm FMI MoU Is Working

UK regulators confirm FMI MoU is working – Bank of England and FCA extend oversight coordination across CCPs, DSS, and T+1 systems. The regulator stated that the MoU on FMI has proven effective and also noted progress within the Digital Securities Sandbox and T+1 settlement. Coordination between the regulators will continue as part of the final policy in the second half of 2025.

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Bank of England and FCA: MoU on FMI Is Effective, Let's Keep It

Bank of England and the Financial Conduct Authority issued a joint statement confirming that the existing memorandumof understanding (MoU) on oversight of financial market infrastructure (FMI) remains effective. It refers to a coordinated regulatory model for Central Counterparties (CCPs), Recognised Investment Exchanges (RIEs), and Recognised Central Securities Depositories (RCSDs).

As a reminder, the MoU provides for an annual review of arrangements and feedback from supervised market participants. Based on the analysis of supervisory interaction in 2024, including in the areas of policy and supervision, the regulator designated the framework as stable.

Another key aspect of the statement was that, during the market participants survey, particular attention was given to joint consultations on operational resilience topics, including ‘Operational Incident and Third-Party Reporting’. Transparency and structure took their place, and participants noted the value of clear reporting requirements and aligned data submission frameworks. The final policy statement on these matters is expected in the second half of 2025.

Digital Asset Infrastructure: DSS and T+1 Settlement

The regulators also stated that the MoU remains applicable in the context of digital initiatives. This includes successful coordination within the Digital Securities Sandbox (DSS) and the transition to T+1 settlement.

More specifically, over the past 12 months, regulator interaction ensured alignment of actions without duplication of functions.

Bank of England and the FCA confirmed their intention to continue using the MoU to enhance supervisory effectiveness and address specific risks identified by supervised entities.

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Conclusion

Coordination between Bank of England and the FCA is one example of the UK's increasing activity in the direction of modernising its financial sector. It's a part of Financial Services and Markets Act 2000, which forms a unified framework for application to central counterparties, settlement infrastructure, and reporting.

All this may enable digital and tokenised assets to develop in a more consistent – and therefore more accelerated – manner in many respects. Of course, if supported by sufficient political will and economic incentives.

Stay tuned for the latest updates in global finance, the crypto industry, and DeFi opportunities.