2017 Assessment of the Reserve Bank Information and Transfer System 2. Summary and Review of Ratings and Recommendations

RITS is Australia's high-value payments system, which is used by banks and other approved institutions to settle their payment obligations on a real-time gross settlement (RTGS) basis. RITS is owned and operated by the Bank. The Bank seeks to ensure effective oversight of RITS by separating the Bank's operational and oversight functions, as well as by producing transparent assessments against international standards. This Assessment has been produced by the Bank's Payments Policy Department, which is the functional area responsible for oversight of the payments system, drawing on information provided by the Bank's Payments Settlements Department, which is the functional area responsible for operating RITS (see section A.3 for further background on the governance and oversight of RITS). This report has been endorsed by the Payments System Board.

This Assessment focuses on the critical services provided by RITS; in particular, RITS's role as an RTGS system. In RTGS systems, individual payments are processed and settled continuously and irrevocably in real time. RITS also has a role in the settlement of interbank payment obligations arising from net settlement systems, which is discussed where relevant. Currently, the Bank considers that RITS is the only domestic systemically important payment system for which an assessment against international principles is necessary.

This section summarises steps taken since the publication of the 2015 Assessment in relation to the recommendations made in that assessment. It also summarises the ratings and recommendations arising from the May 2017 Assessment of RITS against the Principles for Financial Market Infrastructures.

2.1 Progress against 2015 recommendations

In the 2015 Assessment, RITS was found to have observed all of the relevant Principles.^[6] Recommendations were, however, made in a number of areas to support RITS's operations continuing to meet international best practice. Table 1 summarises the recommendations made in that assessment, and progress by the Bank during the assessment period towards addressing these recommendations.

2.2 2017 Ratings and Recommendations

As of the end of March 2017, RITS was found to observe all of the relevant Principles. Payments Policy Department has not identified any areas of concern in terms of RITS's observance with the Principles or specific recommendations to support continuous improvement. As part of its ongoing oversight process, however, Payments Policy Department will be following up on developments in two aspects of the work to ensure that RITS remains resilient in the face of evolving cyber-security threats. As particular areas of oversight focus, Payments Policy Department will monitor progress in:

• the implementation of recommendations arising out of the completed reviews of RITS's cyber security and cyber resilience
• evaluating current and emerging technology that could enable further enhancements to the ability to recover RITS from cyber attacks in a timely manner.

Footnote

In its assessment, Payments Policy Department has applied the approach and rating system set out in the Disclosure Framework. ‘Observed’ is the highest rating within this framework and is applied when Payments Policy Department assesses that ‘(An) FMI observes the principle. Any identified gaps and shortcomings are not issues of concern and are minor, manageable and of a nature that the FMI could consider taking them up in the normal course of its business.’ The full rating scale is set out in Appendix B: Detailed Assessment of the Reserve Bank Information and Transfer System. [6]