ECB consults on oversight requirements for systemically important payment systems

The draft regulation aims to implement in the EUR area the “Principles for financial market infrastructures”, introduced in April 2012 by the Committee on Payment and Settlement Systems (CPSS) of the Bank for International Settlements and the Technical Committee of the International Organization of Securities Commissions (IOSCO). The new principles will replace the “Core principles for systemically important payment systems”, developed by the CPSS, which the Eurosystem adopted in 2001 and has since been implementing.

The draft regulation covers both large-value and retail payment systems of systemic importance, whether operated by Eurosystem national central banks or private entities. It defines the criteria for qualifying a payment system as systemically important. The list identifying such payment systems and their respective operators and competent oversight authorities will be adopted by the Governing Council and published on the ECB’s website. The requirements defined in the draft regulation are aimed at ensuring management of legal, credit, liquidity, operational, general business, custody, investment and other risks as well as sound governance arrangements, objective and open access of systemically important payment systems. These requirements are proportionate to the specific risks to which such systems are exposed.

The CPSS-IOSCO principles stipulate that in view of their potential to trigger systemic risks, payment systems of systemic importance should be subject to effective oversight against clearly defined and publicly disclosed criteria. In addition, competent authorities should have sufficient powers and resources to carry out their oversight tasks, including taking corrective action. The CPSS-IOSCO recommends implementing these principles to the fullest extent allowed under national legal and regulatory frameworks.

The draft regulation provides a transitional period of one year, allowing for the operators to familiarise themselves with and implement the requirements.