Commitment Towards the Principles for Financial Market Infrastructures (PFMIs)
The Principles for Financial Market Infrastructures are the international standards aiming to preserve the safety, efficiency, and resilience of systemically important financial market infrastructure such as payment systems. Systemically Important Payment Systems (SIPS) are those systems that hold the potential to transmit and propagate financial shocks across the economy. The standards were first published by the Bank of International Settlements’ (BIS) Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) in 2012.
JoPACC is a payment system operator licensed to conduct its operations in Jordan by the Central Bank of Jordan. As such, JoPACC has taken it upon itself to ensure the highest levels of safety, efficiency, and resilience of the payment systems under its operations. To ensure that its operation of payment systems is aligned with international best practices, JoPACC has incorporated the Principles of Financial Market Infrastructures into its Risk Management Framework.
It is worth noting that the PFMIs primarily address SIPS. SIPS are payment systems which have the potential to trigger or transmit systemic disruptions; these include, among other things, systems that are the sole payment system in a jurisdiction or the principal system in terms of the aggregate value of payments, and systems that mainly handle time-critical, high-value payments or settle payments used to effect settlement in other FMIs. Thus, none of JoPACC’s systems can be deemed as SIPS, neither have they been designated as such by the Central Bank of Jordan. That being said, JoPACC has voluntarily aligned itself with the PFMIs to ensure the highest levels of safety, efficiency, and resilience for its payment systems and ensure the compliance of Jordan’s National Payment System with international standards and best practices.
Through its Risk Management Framework, JoPACC is committed to leverage the PFMIs to minimize the risks arising across its financial market infrastructures, all while increasing safety and efficiency. More specifically, JoPACC is devoted to the following:
- Utilize the PFMIs as a guiding framework on the safe and efficient operation and management of payment systems
- Conduct annual self-assessments against the PFMIs, to document JoPACC’s adherence to the relevant principles and the progress it makes over the years
- Identify gaps between JoPACC’s current practices and those stipulated in the PFMIs and assess said gaps to formulate action plans based on criticality and priority
- Abide by the “Disclosure Principle” by publishing summary reports of its assessments against the PFMIs, its access criteria, governance arrangements, and operating rules to increase transparency and enable participants to better quantify their risks
- Maintain a viable recovery or orderly wind-down plan to reduce the disruption caused by shocks or times of market stress