Media Release Payments System Issues

New Financial Stability Standards for Clearing and Settlement Facilities

At its 16 November meeting, the Payments System Board approved the determination of new Financial Stability Standards (FSSs) for central counterparties and securities settlement facilities. The 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), which have been developed by the Committee on Payment and Settlement Systems of the Bank for International Settlements and the Technical Committee of the International Organization of Securities Commissions. Both ASIC, through an update to its regulatory guidance, and the Bank propose to implement the Principles within their respective regulatory frameworks to ensure that financial market infrastructure providers operating in Australia conduct their affairs in accordance with international best practice.

The Bank has the power to set FSSs for clearing and settlement facilities licensed under Part 7.3 of the Corporations Act 2001 and is required to ensure that these facilities conduct their affairs in a way that causes or promotes overall stability in the Australian financial system. The new FSSs incorporate feedback received from stakeholders during the consultation on draft standards, as described in the accompanying paper New Financial Stability Standards: Final Standards and Regulation Impact Statement. The new FSSs also implement key elements of the Council of Financial Regulators' framework for ensuring that Australian regulators have appropriate influence over cross-border clearing and settlement facilities. The Bank is also releasing guidance, based on the Principles, to aid in interpreting the new FSSs, as well as information on the Bank's approach to assessing facilities against the new FSSs.

Most of the new FSSs will come into effect on 29 March 2013. However, the implementation of provisions of the new FSSs supporting the recovery and resolution of clearing and settlement facilities will be delayed for 12 months.

The Bank will consider applications from clearing and settlement facilities for the delayed implementation of other provisions of the new FSSs that require significant, industry-wide change, or where there are significant external dependencies to achieving compliance. Facilities are invited to make any such applications by 14 January 2013 to:

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

pysubmissions@rba.gov.au