Media Release Payments System Issues

New Financial Stability Standards for Clearing and Settlement Facilities

The Bank is today publishing a consultation paper on a proposal to determine new Financial Stability Standards (FSSs) for central counterparties and securities settlement facilities. The proposed new FSSs aim to align the Australian regime for regulation of clearing and settlement facilities with new international standards, the Principles for Financial Market Infrastructures (the Principles). These have been developed by the Committee on Payment and Settlement Systems and the Technical Committee of the International Organization of Securities Commissions. Both the Bank and ASIC propose to implement the Principles within their respective regulatory mandates to ensure that financial market infrastructure providers operating in Australia conduct their affairs in accordance with international best practice.

In addition to alignment with the Principles, the proposed new FSSs uphold the standards to which licensed clearing and settlement facilities are held under the current FSSs. Where appropriate, they also reflect complementary standards applied in other relevant jurisdictions, and implement key elements of the Council of Financial Regulators' framework for ensuring that Australian regulators have appropriate influence over cross-border facilities. The Bank has the power to set FSSs for clearing and settlement facilities licensed under Part 7.3 of the Corporations Act 2001, with the objective of ensuring that these facilities conduct their affairs in a way that causes or promotes overall stability in the Australian financial system.

The consultation paper includes draft guidance, based on the Principles, to aid in interpreting the proposed FSSs, as well as details of the Bank's proposed approach to assessing facilities against the new FSSs.

Submissions from interested parties are invited by no later than 19 October 2012. The Bank will be conducting stakeholder meetings in early October. Those wishing to arrange a meeting should contact the Bank by 21 September.

Submissions and expressions of interest in attending a stakeholder meeting should be sent to:

Head of Payments Policy Department
Reserve Bank of Australia
GPO Box 3947
Sydney NSW 2001
or

pysubmissions@rba.gov.au

Submissions will be placed on the Bank's website, although parties may indicate that all or part of their submission should remain in confidence.