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���������ֳ�’s Sector Outlook: Stable
���������ֳ�’ global sector outlook for financial market infrastructure companies (FMIs) is stable, reflecting strong franchises, increasingly diversified business models and generally strong financial metrics. On the other hand, competition is expected to continue to pressure fees and drive mergers and acquisitions (M&A) appetite, while operational and cyber risks remain unavoidable constraints on the business model. ���������ֳ� defines FMIs as including exchanges, clearing houses (CCPs) and central securities depositories (CSDs).
Rating Outlook: Stable
The global Rating Outlook for FMIs is stable, reflecting the companies’ well-established market positions in their geographies/market segments, solid capitalization, strong liquidity and/or generally moderate use of leverage. In emerging markets, FMI ratings/outlooks are often influenced by the sovereign rating/outlook of the country of domicile, although ���������ֳ� believes that FMI risk profiles are typically less correlated with sovereign risk than other financial institutions.
Rating Distribution Weighting
The largest global FMIs are able to achieve ratings in the ‘AA’ rating category, given the strength of their franchises, and the diversity and stability of their earnings. Nationally operating FMIs are typically among the highest rated NBFIs within their countries, given their entrenched market positions, very high barriers to entry for other players, and generally low use of leverage.