Bank of England takes supervisory action over Euroclear outage

The UK’s central bank is taking supervisory action against Euroclear UK and Ireland (EUI) following a settlement system outage which took place last September.

The outage, triggered by an issue with messaging software, caused significant market disruption. Settlement was immediately halted while investigations were undertaken.

Following the incident, EUI independently commissioned an independent external review into its causes. EUI has accepted the outcomes of this review and has begun a remediation programme to implement the recommendations.

The Bank of England has now fully reviewed the incident.

“In light of the incident’s serious and disruptive nature, and in 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 the bank.

The Bank of England added that it is also using its powers under section 166 of the Financial Services and Markets Act 2000 to require EUI to appoint a skilled person to assess the implementation of the recommendations.

The central bank claimed that the action is proportionate to the nature and impact of the incident, does not imply the breach of a regulatory requirement, and does not constitute enforcement action.

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