2013 Self-assessment of the Reserve Bank of Australia –
Systemically Important Payment Systems 1. Introduction and Executive Summary

The Reserve Bank recently completed its first Self-assessment of the Reserve Bank Information and Transfer System (RITS) against the Principles for Financial Market Infrastructures (the Principles), which were published by the Committee on Payment and Settlement Systems (CPSS) and the Technical Committee of the International Organization of Securities Commissions (IOSCO) in April 2012.^[1] The Principles also establish a set of ‘Responsibilities of Central Banks, Market Regulators, and other Relevant Authorities for Financial Market Infrastructures’ (the Responsibilities). This report presents the Self-assessment of how well the Bank meets its requirements under the Responsibilities in its role as overseer of systemically important payment systems.

Publication of this report provides more transparency around the Bank's role in payment system oversight, and in particular the application of the Principles to systemically important systems. This report has been produced by the Payments Policy Department of the Bank and endorsed by the Payments System Board. It is also expected that this report will be an input into ongoing work of CPSS and IOSCO to monitor implementation of the Principles and Responsibilities across jurisdictions, including Australia.

The Self-assessment concludes that the Bank observes all relevant Responsibilities, but nevertheless identifies some actions to further enhance the Bank's oversight arrangements.

1.1. Background

The Bank has primary regulatory responsibility for Australia's payments system, including systemically important payment systems. The Bank's regulatory role is set out in the Reserve Bank Act 1959, which states that the Payments System Board of the Bank is responsible for determining the Bank's payments system policy in a way that will best contribute to: controlling risk in the financial system; promoting the efficiency of the payments system; and promoting competition in the market for payment services, consistent with overall stability of the financial system.

The scope of this Self-assessment is limited to the Bank's role as overseer of systemically important payment systems, although, where relevant, the oversight arrangements for other payment systems and other types of financial market infrastructures (FMIs) in Australia are discussed.

1.2. Assessment

This Self-assessment was conducted as at end October 2013 and covers developments since the last Self-assessment of the Bank against relevant international standards was published. This was the Bank's 2009 Self-assessment against the previous ‘Responsibilities of the Central Bank in Applying the Core Principles’.^[2] The current Self-assessment of the Bank is against the updated, more detailed set of Responsibilities. The most significant development over that period has been the implementation of the Principles in Australia.

On the basis of the evidence presented in this report, the Bank has concluded that it observes all relevant Responsibilities in its oversight of systemically important payment systems. However, in the spirit of continuous improvement, the Bank has identified some specific actions to further enhance its oversight of FMIs, including systemically important payment systems. In particular, the Bank has committed to:

• continuing to monitor developments in the payments landscape periodically to consider whether any other payment systems should also be subject to ongoing oversight and assessments against the Principles
• considering additional mechanisms to enhance coordination and consistency in its oversight of payment systems, and clearing and settlement (CS) facilities, including the possible establishment of a new internal FMI Oversight Committee.

The remainder of this report is structured as follows. Section 2 provides an overview of the payments landscape in Australia, while Section 3 summarises the conclusions and actions arising from Bank's detailed Self-assessment against each Responsibility. Finally, the detailed Self-assessments of the Bank against the Key Considerations for each Responsibility are set out in Appendix A.

Footnotes

The Principles are available at <http://www.bis.org/publ/cpssl01.htm>. [1]

This Self-assessment can be found in ‘Central Bank Responsibilities’ in the 2009 Self-Assessment of the Reserve Bank Information and Transfer System, available at <https://www.rba.gov.au/payments-and-infrastructure/rits/self-assessments/2009/>. [2]