1. The development of the market infrastructure for payment and securities handling Ramzi Hamadeh Group 2 Frankfurt am Main, 02.09.05

2. Market infrastructure Is a set of systems, processing instruments, networks (i.e. CSDs, RTGS…) Perimeter can be variable according to the organisation of the market (would some major market participants be part of the market infrastructure, for instance custodians, clearing members…)

3. Objectives, general principles and issues Objectives: –Security, safety and efficiency –Resiliency –Coherence of the entire infrastructure General principles –Reaction to market failures –Meet the market needs –Neutrality in terms of competition –Risk management Issues –To ensure conducive legal framework –Customer awareness

4. Role of the central banks Operator –Implementing international standards (e.g. core principles for SIPS) Overseer –Analysis on the stability of the infrastructure –Assessment against international principles / standards Regulator –Focus on payments as primary regulator –Enforce regulation Facilitator –Communication policy to market participants

5. Role of the central banks Issues –Cooperative regulatory framework for securities –International cooperative framework –Transparency of central banks’ actions –Separation of oversight / operator functions within central banks –Cost / benefit analysis (pricing) –May central banks operate all or some parts of the systems?