Circular
Federal Reserve Seeks Comment on Proposed Rule Related to Supervision of Designated Financial Market Utilities
March 30, 2011
Circular No. 12298

The Federal Reserve Board has requested comment on a proposed rule that implements two provisions of Title VIII of the Dodd-Frank Wall Street Reform and Consumer Protection Act related to the supervision of financial market utilities (FMUs) designated as systemically important by the Financial Stability Oversight Council. FMUs, such as payment systems, central securities depositories, and central counterparties, provide the essential infrastructure to clear and settle payments and other financial transactions.

First, the proposed rule establishes risk-management standards governing the operations related to the payment, clearing, and settlement activities of designated financial market utilities, except those registered as a clearing agency with the Securities and Exchange Commission or as a derivatives clearing organization with the Commodity Futures Trading Commission. The proposed risk-management standards are based on the existing international standards that the Board has incorporated previously into its Policy on Payment System Risk.

Second, the proposed rule establishes requirements and procedures for advance notice of material changes to the rules, procedures, or operations of a designated financial market utility for which the Board is the primary supervisor under Title VIII of the Dodd-Frank Act.

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