Media Release Draft Financial Stability Standards

The Reserve Bank of Australia has today released, for public consultation, draft financial stability standards that will apply to licensees of clearing and settlement facilities in Australia under Part 7.3 of the Corporations Act 2001.

Clearing and settlement facilities are systems that clear and settle transactions in securities such as bonds and equities, and in derivative instruments such as options and futures. The Reserve Bank has formal responsibility for ensuring that clearing and settlement facilities conduct their affairs in a way that is consistent with financial system stability. The Reserve Bank's role is discussed in the Payments System Board's 2001 Annual Report (available at www.rba.gov.au). Currently, clearing and settlement licences are held by entities owned by the Australian Stock Exchange and the Sydney Futures Exchange.

The objective of the standards is to ensure that licensees of clearing and settlement facilities identify and properly control the risks associated with their operations. There are two separate standards: one for central counterparties and another for securities settlement facilities. Each standard is accompanied by guidance notes, which provide information on how licensees may meet the standard.

The draft standards and associated guidance notes are available on the web site of the Reserve Bank of Australia (www.rba.gov.au). Parties wishing to comment on the draft standards should send written submissions by 31 January 2003 to:

Payments Policy Department
Reserve Bank of Australia
GPO Box 3947
SYDNEY NSW 2001

or

standards@rba.gov.au