BoE confirms supervisory action against Euroclear UK and Ireland following settlement outage
25 June 2021 UK
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The Bank of England (BoE) has initiated supervisory action against Euroclear UK and Ireland in connection with an outage in its CREST settlement system in September 2020.
The outage, triggered by a failure in messaging software, caused the UK central bank to postpone one of its periodic gilt purchase operations under its asset purchase programme.
EUI commissioned an independent assessment into the causes of the outage and has already commenced remedial action on the basis of its recommendations.
“In light of the incident’s serious and disruptive nature, and recognising the importance of ensuring implementation of these remedial actions, the Bank has issued a direction under section 191 of the Banking Act 2009 requiring EUI to implement the recommendations of the independent reviewer,” said a BoE statement.
“The Bank is also using its powers to require EUI to appoint a skilled person to assess the implementation of the recommendations.”
This skilled person will provide a final report on its findings to the central bank in the first half of 2022.
The Bank of England said that its supervisory action does not imply that a regulatory breach has taken place and this does not represent an enforcement action.
The outage, triggered by a failure in messaging software, caused the UK central bank to postpone one of its periodic gilt purchase operations under its asset purchase programme.
EUI commissioned an independent assessment into the causes of the outage and has already commenced remedial action on the basis of its recommendations.
“In light of the incident’s serious and disruptive nature, and recognising the importance of ensuring implementation of these remedial actions, the Bank has issued a direction under section 191 of the Banking Act 2009 requiring EUI to implement the recommendations of the independent reviewer,” said a BoE statement.
“The Bank is also using its powers to require EUI to appoint a skilled person to assess the implementation of the recommendations.”
This skilled person will provide a final report on its findings to the central bank in the first half of 2022.
The Bank of England said that its supervisory action does not imply that a regulatory breach has taken place and this does not represent an enforcement action.
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