impede the effective operation of markets, causing severe systemic disruptions and financial instability. financial market infrastructures went largely unnoticed until the global financial crisis broke, and although they performed well through the crisis, it was only then that an appreciation was found for the true importance of such infrastructures, reflecting the fundamental role they play in ensuring financial stability. with this in mind, in april 2012, the committee on payment and settlement systems at the bank for international settlements ( cpss ) and the international organization of securities commissions ( iosco ) published new international standards for payment, clearing and settlement systems, including central counterparties. the main objectives of the new principles are to ensure a robust global financial market infrastructure, which if faced with the financial shocks of the magnitude experienced in 2007 / 2008, will continue to operate effectively. these new standards are tougher and are due to be adopted by cpss and iosco members by the end of 2012. however, i note that the next session will be dealing specifically with this issue, insofar as it pertains to south africa and our state of readiness, and so i will refrain from going into any further detail. 4. financial market infrastructure developments in south africa it is important to indicate at the outset that financial market infrastructures in both the payment and securities markets require a collaborative approach from all the stakeholders. clearing and settlement processes in both these areas involve the interaction of various parties, including participants, infrastructure providers and regulatory authorities, who all have an important role to play. as early as 1993, discussions were initiated between the south african reserve bank ( the bank ) and the banking industry to modernise and develop the domestic payment system. in this process, a strategic approach for the development of the payment system was adopted and meetings were held at different levels with various stakeholders, which culminated in the publication of the framework and strategy document for the national payment system ( commonly known as the “ blue book ” ), in 1995. the blue book bis central bankers ’ speeches outlined various strategies envisioned for the payment system over the next ten years, leading up to 2005. the strategies addressed various aspects of payment system reform that had been identified, as well as the establishment of key pillars of the desired financial market infrastructures and appropriate supporting arrangements. one of the strategies, for example, relates to the establishment of a sound legal framework which culminated in the promulgation of the national payment system ( nps ) act in october 1998. a review completed in 2003, revealed that all

launch of the blue book, numerous achievements have been made. on 9 march 1998, the south african multiple options settlement ( samos ) system was implemented. since then various upgrades have taken place to ensure that the settlement system is well - functioning, safe and efficient. thus far during 2012, the average value settled through samos on a monthly basis equates to approximately r7. 3 trillion. in october 2008, at the height of the global financial crisis following the collapse of lehman brothers, a record settlement of r8. 5 trillion took place. the upgrades to the samos system were undertaken in the interest of the financial system as a whole and in order to ensure south africa ’ s continued participation in the global financial arena. some of these include facilities that enabled the integration of the payment system and securities clearing and settlement system. this enabled the south african financial markets to conform to international best practice with the introduction of the delivery versus payment ( dvp ) principle, as well as various other liquidity saving mechanisms to make settlement more efficient. bis central bankers ’ speeches the low value rand payment clearing systems have also evolved to current best practice and interfaces for these systems to the core samos system have been established to ensure that settlement of all transactions is undertaken in central bank money and, as far as possible, the principle of same day settlement is achieved. as was mentioned earlier, the nps act was promulgated in october 1998. the act provided the sarb with the mandate to oversee the payment system and several amendments have been effected over time where necessary. clearing and settlement agreements and rules have also been implemented as part of the objective of creating a sound legal and regulatory framework. one of the most important achievements in the nps was the inclusion of the south african rand in the continuous linked settlement ( cls ) system in 2004. cls is a worldwide industry initiative implemented to reduce the risks associated with cross - currency transactions by settling the two legs of a foreign exchange ( fx ) transaction simultaneously in order to eliminate fx settlement risk. 1 leading up to the rand joining the cls settlement system, the sarb issued a position paper late in 2002 supporting the inclusion of the rand as a settlement currency in the cls system and encouraged south african registered banks to support this initiative in areas where their actions were required to enable this initiative. on 6 december 2004, cls bank international ( cls bank ) announced that four new currencies went live in the cls system, one