New Financial Stability Standards:
Final Standards and Regulation Impact Statement – December 2012
6. Next Steps

The FSSs, accompanying guidance and guidance on the Bank's assessment approach have been published on the Bank's website.[1] The new FSSs set out in Attachments 2 and 4 will shortly be formally determined. Following formal enactment, most standards are expected to take effect on 29 March 2013, with the exception of standards identified for transitional relief (see Section 6.1).

Subject to any such transitional arrangements, all current CS facilities will be required to observe the new FSSs from 29 March 2013. All CS facility licensees will be formally assessed against the applicable new FSSs in mid 2013.

6.1 Transitional Relief

As compliance with the standards may require CS facilities to undertake system changes, the Bank invited existing CS facility licensees to identify any need for transitional relief through the consultation on the draft FSSs.

During consultation, the existing CS facility licensees indicated that they would need additional time to fully assess the extent and potential timing of changes required to achieve compliance with the new FSSs. In recognition of this, and the likely extent of changes required by CS facilities in order to achieve full compliance with the new FSSs, the interval between determination and the new FSSs taking effect can be considered a de facto period of general transitional relief. This period will allow facilities additional time to make the changes required to observe the new FSSs.

In addition, the Payments System Board has determined that a longer period of transitional relief be granted in respect of several standards related to FMI recovery and resolution: CCP and SSF Standard 3.5; CCP Standard 4.8 and SSF Standard 4.5; CCP Standard 14.3 and SSF Standard 12.3; and CCP Standard 16.11 and SSF Standard 14.11. These standards will not come into force until 31 March 2014. Implementation of these standards may be further delayed if international policy work and any domestic legislation relating to FMI recovery and resolution have not been finalised by that date.

The Bank will also provide the opportunity for the existing CS facility licensees to make a formal application for transitional relief. It is intended that any transitional relief would apply to requirements that require significant, industry-wide change, or where there are significant external dependencies to achieving compliance, such as a dependence on legislative change or on the finalisation of ongoing policy development work, both domestically and internationally. Any application for relief will need to set out the areas in which relief is sought, the length of relief required, and plans to achieve compliance by the end of the additional period requested.

Licensees should submit any applications by 14 January 2013. The Payments System Board will consider at its February 2013 meeting whether to grant transitional relief, and the terms of any relief granted.

In other areas where CS facility licensees are unable to immediately achieve full compliance, the Bank intends to address steps taken to achieve compliance through the course of its ongoing assessment process.