Annual Regulatory Plan
Payment Systems 2012–13
As at 1 August 2012
The Reserve Bank, like other Australian Government agencies, is required to publish an annual regulatory plan on its website each year. The regulatory plan deals with the Payments System Board's area of responsibility and contains information about:
- changes to business regulation that have occurred since the beginning of the previous financial year; and
- activities planned in the current financial year that could lead to changes to business regulation.
A regulatory plan covers business regulation. This includes primary legislation, subordinate legislation, quasi-regulation or treaties that have a significant impact on business. Quasi-regulation refers to rules or arrangements where governments influence businesses to comply, but which do not form part of explicit government regulation.
The regulatory plan does not include information on:
- regulations of a minor or machinery of government nature that are unlikely to substantially alter existing arrangements;
- regulations that involve consideration of specific Government purchases;
- regulations of a state or self-governing territory that apply in a non-self-governing territory; and
- anticipated activity about which it would be inappropriate to publish information on grounds of confidentiality.
In addition, there may be some regulatory activities that the Reserve Bank is unable to forecast. In view of these exclusions, readers should not take this regulatory plan to be a comprehensive source of information on past and likely future changes to business regulation. The Payments System Board also oversees the Reserve Bank's contributions to a number of initiatives coordinated by the Council of Financial Regulators. These include the development of a legislative framework for OTC derivatives regulation, and implementation of a package of reforms to the regulation of financial market infrastructures in Australia. These initiatives are included in the Annual Regulatory Plans for other agencies of the Council of the Financial Regulators.
It should also be noted that there are no other regulatory activities of the RBA that need to be reported in terms of these requirements.
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Section 1: Past Regulatory Changes
| Title | Variation of the Standards relating to merchant surcharging of credit and scheme debit cards |
| Description of issue | The Payments System Board of the Reserve Bank decided to vary the Standards relating to merchant surcharging of credit and scheme debit cards in June 2012. The variation allows card scheme rules to limit surcharges to the reasonable cost of card acceptance. The variation continues to ensure that merchants can fully recover their card acceptance costs. The decision to vary the Standards reflected the Payments System Board's concerns about the increase in cases where surcharges appear to be well in excess of acceptance costs or where surcharges are ‘blended’ across card schemes, even though merchants' acceptance costs may be higher for some cards than others. The Payments System Board intends that its variation will improve price signals by enabling a card scheme to address cases where merchants are clearly surcharging at a higher level than is justified for acceptance of its card products. Further details of the decision and the Reserve Bank’s consultation process are contained in the Regulation Impact Statement, released on 12 June. The variation to the Standards was Gazetted on 12 June. |
| Date of effect | The varied Standards will come into force on 1 January 2013. |
| Contact details | Tony Richards Head of Payments Policy Department Reserve Bank of Australia Phone: +61 2 9551 8700 Fax: +61 2 9551 8024 E-mail: richardsa@rba.gov.au |
Information on payments system reforms that took place prior to 1 July 2011 can be found at Reforms. Information on any prior determinations and variations of the Financial Stability Standards for Clearing and Settlement Facilities can be found at Standards. Enquiries about reforms and standards may be directed to:
Tony Richards
Head of Payments Policy Department
Reserve Bank of Australia
Phone: +61 2 9551 8700
Fax: +61 2 9551 8024
E-mail: richardsa@rba.gov.au
Section 2: Planned Regulatory Activities
| Title | Future regulation of the EFTPOS system |
| Description of issue | The Reserve Bank is considering options for the future regulation of EFTPOS interchange fees and access to the EFTPOS system, including whether an interchange fees standard and/or an access regime continue to be required. The Reserve Bank is also considering whether transitional arrangements may be appropriate and their possible form. The Reserve Bank has released a consultation document that discusses possible options for the future regulatory framework. The document also contains a draft interchange fees standard that reflects the Payments System Board’s preliminary view on its preferred approach to the regulation of bilateral EFTPOS interchange fees, and a draft access regime that reflects possible access provisions should the Payments System Board decide that they are appropriate as part of the future regulatory framework. |
| Consultation opportunities | On 12 July, the Reserve Bank issued a media release inviting interested parties to provide formal written submissions by 31 July 2012. Submissions have been posted on the Reserve Bank’s website and those making submissions will be provided with an opportunity to discuss their submission with the Bank. |
| Expected timetable | The Reserve Bank anticipates that a final decision on the future regulatory framework for the EFTPOS system will be made around the end of 2012. |
| Contact details | Tony Richards Head of Payments Policy Department Reserve Bank of Australia Phone: +61 2 9551 8700 Fax: +61 2 9551 8024 E-mail: richardsa@rba.gov.au |
| Title | Proposed variation to Access Regime for the ATM System |
| Description of issue | The Payments System Board is considering varying the Access Regime for the ATM System to provide the Reserve Bank with greater flexibility to grant exemptions for ATM arrangements that would otherwise be counter to the interchange fee provisions of the Access Regime. It is anticipated that this flexibility could be used to facilitate, in a timely manner, ATM arrangements that are considered to be in the public interest. Further details on the proposal are contained in a consultation document, released on 29 May. |
| Consultation opportunities | On 29 May, the Reserve Bank issued a media release inviting written submissions from interested parties by 13 July 2012. Submissions received have been posted on the Reserve Bank’s website and those that made submissions have been provided with an opportunity to discuss their submission with the Bank. |
| Expected timetable | The Reserve Bank anticipates that a decision on the proposed variation to the Access Regime will be made in the second half of 2012. |
| Contact details | Tony Richards Head of Payments Policy Department Reserve Bank of Australia Phone: +61 2 9551 8700 Fax: +61 2 9551 8024 E-mail: richardsa@rba.gov.au |
| Title | Update to Financial Stability Standards for central counterparties and securities settlement facilities |
| Description of issue | The CPSS-IOSCO Principles for Financial Market Infrastructures (the Principles) were released in April 2012. The Principles represent the latest international thinking on best practice for controlling systemic risks flowing from the activities of financial market infrastructures (FMIs). Some of the additional requirements contained in the Principles go beyond the measures identified in the current Financial Stability Standards (FSSs) the Reserve Bank uses to assess systemically important clearing and settlement facilities. An update to the FSSs to reflect the Principles is therefore required if Australian regulation of FMIs is to meet international best practice. The Reserve Bank will look to retain the current FSS measures where appropriate and also embed in the new standards some additional elements to enhance regulatory influence over clearing and settlement facilities with cross-border operations. |
| Consultation opportunities | A consultation document will be published during the second half of 2012, inviting interested parties to provide formal written submissions on the new proposed standards. In the normal course of events, submissions will be posted on the Reserve Bank's website and those making submissions will be provided with an opportunity to discuss their submission with the Reserve Bank. |
| Expected timetable | Following consultation, the Reserve Bank intends to finalise the standards at the earliest opportunity and bring them into force early in 2013. |
| Contact details | Tony Richards Head of Payments Policy Department Reserve Bank of Australia Phone: +61 2 9551 8700 Fax: +61 2 9551 8024 E-mail: richardsa@rba.gov.au |
| Title | Management and reporting of retail operational incidents |
| Description of issue | In recent years, there have been a number of high-profile operational incidents in Authorised Deposit-taking Institutions' (ADIs') retail payments operations. As well as inconveniencing users, repeated or lengthy outages may have the potential to affect users’ confidence in the payments system. The Reserve Bank is considering the need for measures to monitor and address these issues, including development of a proposal for periodic statistical reporting. |
| Consultation opportunities | In February 2012, the Board launched an informal consultation with ADIs and other interested stakeholders to deepen its understanding of ADIs' retail payments operations and the nature of any operational vulnerabilities. |
| Expected timetable | Conclusions of the current deliberations are expected to be released for consultation in late 2012, with any measures introduced as appropriate thereafter. |
| Contact details | Tony Richards Head of Payments Policy Department Reserve Bank of Australia Phone: +61 2 9551 8700 Fax: +61 2 9551 8024 E-mail: richardsa@rba.gov.au |
