2013 Self-assessment of the Reserve Bank Information and Transfer System 4. Self-assessment of RITS against the Principles

This is the Bank's first Self-assessment of RITS against the Principles. Previous self-assessments of RITS were carried out periodically against the Core Principles – most recently in 2009. The Principles and the Key Considerations that sit beneath them are more detailed than the pre-existing Core Principles. The Principles also establish requirements in a number of new areas, such as participant default rules and procedures, general business risk, tiered participation arrangements, and communication procedures and standards. Accordingly, a new evidence base has been developed setting out in detail how RITS observes the new requirements. This is available in the detailed Self-assessment presented in Appendix A. This section summarises, thematically, the key findings of the detailed Self-assessment, while drawing out material developments since the last Self-assessment against the Core Principles and some actions to be taken over the coming period.

4.1 Structure and Organisation of RITS

RITS is owned and operated by the Bank and, since it is not operated as a separate legal entity, the management and operation of RITS fall under the governance structure of the Bank, and are therefore subject to its normal oversight, decision-making and audit processes. Day-to-day operations, liaison with participants, and the ongoing development of RITS are delegated to the Bank's Payments Settlements Department. RITS is also subject to oversight by the Bank's Payments Policy Department, under the governance of the Payments System Board.[1]

The governance structure as it applies to RITS is shown in Figure 5, below. Governance is one area in which the application of the Principles to central bank-owned systems necessarily differs from that for private sector systems. In particular, since a central bank-owned system is typically not a separate legal entity, its governance will necessarily be integrated with the broader governance arrangements of the central bank.

There are a number of other areas in which the application of the Principles will necessarily differ for central bank-owned systems.[2] The Bank has relied on its own judgement regarding how the Principles should be applied to RITS. As a general rule, policies and operational arrangements dealing with matters such as access to central bank accounts, credit provision and collateral eligibility will typically be integrally linked to policies that underpin a central bank's monetary operations and it is therefore accepted that these should not be constrained by the Principles. In addition, it is the Bank's view that expectations around recovery planning and the organisation of operational arrangements to support resolution actions will not typically apply in the case of a central bank-owned and -operated system. Similarly, the requirement to hold ring-fenced liquid assets to cover business risk and support a recovery or wind-down plan are not expected to be relevant where a central bank can supply liquidity as required to support its operations.

Taking these considerations into account, RITS has been found to observe those Principles that relate to its structure and organisation as a central bank-owned and -operated system:

  • Governance (Principle 2). The Bank has recently updated its website to articulate its specific objectives in relation to its operation of RITS[3]. These are consistent with the high-level objectives of the Reserve Bank, which emphasise the stability of the broader financial system and the welfare of the Australian people. The Bank accordingly aims to ensure that high-value payments can be made in a safe and efficient manner. The governance arrangements to support these objectives, as detailed above and in Figure 5, provide clear and direct lines of responsibility and accountability, and are disclosed to relevant stakeholders. High-level information on governance is also available on the Bank's website. To ensure the interests of relevant stakeholders are taken into account, the Bank engages in routine liaison with participants and consults on all material changes to operational arrangements.
  • Framework for comprehensive management of risks (Principle 3). The Bank has a well-established organisation-wide risk management framework which facilitates the identification, assessment and treatment of all non-policy risks – including those arising from its operation of RITS – at both an enterprise (‘top-down’) and business (‘bottom-up’) level. Under the Bank's Risk Management Policy, Payments Settlements Department aims to identify in a single Risk Register all risks that might impact its ability to operate RITS in a safe and efficient manner, including those arising from interdependencies with other participants, other FMIs or service providers. The Risk Register is updated at least annually, or when material changes to operations or the business environment occur. Payments Settlements Department also designs and applies appropriate controls to mitigate identified risks. In accordance with the governance structure described above, the Risk Management Policy is subject to oversight by the Bank's Risk Management Committee.
  • Collateral (Principle 5). The Bank provides liquidity to holders of ESAs through repos – see also Section 4.2, below. The eligibility criteria for securities that can be used as collateral for repo with the Bank are set primarily to support the implementation of monetary policy, but are common across all repos: that is, intraday repos and open repos for payment system liquidity purposes, as well as term repos for open market operations. While it is accepted that Principle 5 should not constrain central bank policies on collateral eligibility criteria for monetary operations, the Bank's collateral eligibility criteria are nevertheless broadly consistent with the requirements under Principle 5. The Bank only accepts selected highly rated debt securities denominated in Australian dollars as collateral. Given the relative scarcity of government securities in Australia, the debt securities that the Bank accepts include highly rated ADI-issued securities and certain asset-backed securities. Collateral is conservatively valued, and subject to haircuts and daily margin calls.
  • Money settlement (Principle 9). In accordance with this Principle, RITS conducts its money settlements across participant ESAs at the Bank.
  • General business risk (Principle 15). The Bank manages the general business risk arising from operating RITS within the context of the organisation-wide risk management framework described under Principle 3, above. This is supported by the Bank's budgeting and accounting processes, which allow it to monitor, manage and control its operating expenses. New projects are subject to strong governance arrangements, both prior to initiation and through the implementation process.

4.2 Real-time Gross Settlement

As described in Section 2, RITS is an RTGS system; that is, payments are settled individually and irrevocably in real time. RITS provides no guarantee that queued payments will settle, with any payments remaining on the queue at the end of the day removed from the queue. As an RTGS system, RITS participants are not exposed to unintended credit risk: since customer accounts are not updated before interbank settlement is completed (with finality), exposures between participants do not arise.[4]

The RTGS mode of settlement does, however, generate higher liquidity needs for participants than would a deferred net mode of settlement, since to complete settlement in real time a paying participant must have sufficient liquid funds in its ESA. Liquidity-saving mechanisms in the design of RITS – described in Section 2.4.1 – aim to increase liquidity efficiency. To further underpin real-time settlement and the recycling of liquidity in the system, the Bank allows participants to generate additional ESA balances intraday, or use balances generated under open repos (described in ‘Box A: Developments in Retail Payments Settlement Arrangements’).

RITS has been found to observe those Principles that relate to its management of the financial risks associated with the operation of an RTGS system:

  • Credit risk (Principle 4). The Bank is not exposed to credit risk from the settlement of payments between participants in RITS. These payments are settled using funds in participants' ESAs, which cannot be overdrawn, and the Bank does not guarantee that any transaction submitted to RITS will settle. Accordingly, in the event of a default the Bank would not be exposed to a loss in its role as operator of RITS. The Bank does, however, incur credit risk through the provision of liquidity to participants in support of payments activity, which it manages by taking collateral under repo (as described in Section 4.1 above, and in accordance with Principle 5).
  • Liquidity risk (Principle 7). Since RITS operates as an RTGS system and does not guarantee that queued payments will settle, the Bank as operator of the system assumes no liquidity risk. Therefore many of the requirements under Principle 7 – including those around liquidity stress testing, monitoring, and the maintenance of a pool of liquid assets – do not apply. As noted above, however, settling payments on an RTGS basis does impose additional liquidity requirements on participants. RITS assists participants in the management of these requirements through the liquidity-efficient design of the system (see Section 2.4.1), the provision of liquidity under repo, and the provision of real-time information on transactions and balances. The Bank's operational staff also continuously monitor settlement activity and participant balances in RITS for evidence of any disruption to the flow of liquidity, which could occur if a participant experienced an operational or financial problem. To mitigate possible disruption under such a scenario, participants are required to inform the Bank in the event of any operational problem, and the RITS Regulations also set out actions that the Bank may take in response to a participant default (see Principle 13, below).
  • Participant default rules and procedures (Principle 13). The RITS Regulations define what constitutes an insolvency event, as well as the rights and responsibilities of participants and the Bank in an insolvency scenario, and the actions the Bank may take to manage the situation. A participant that becomes aware of an insolvency event – either its own insolvency, or the suspected insolvency of another participant – must notify the Bank immediately. The Bank may then suspend the relevant participant, remove any queued payments to and from the participant, and prohibit the suspended participant from submitting new payments. The Bank may also suspend a participant that is unable to meet its settlement obligations. By permitting swift and decisive action in this way, the RITS Regulations allow the Bank to minimise the potential for a participant default to disrupt settlement in the system more widely.
  • Custody and investment risk (Principle 16). Eligible securities provided to the Bank as collateral under repo must be lodged in Austraclear, a licensed SSF overseen by the Bank in cooperation with ASIC. These securities are not held with custodian banks or entities in other time zones or legal jurisdictions. Close-out netting provisions included in repo contracts with participants provide for the immediate liquidation of collateral in the event of a default. This right is supported by Part 4 of the Payment Systems and Netting Act 1998. Further, since the Bank accepts only securities collateral under repo and does not re-use collateral received, it does not face investment risks.

4.3 Participation

Since settlement in RITS occurs using central bank money, only an institution with an ESA at the Bank can be a settlement participant in RITS. Furthermore, since RITS is the only means of access to ESAs, all ESA holders must be participants of RITS, meeting all of its operating conditions. The eligibility criteria to hold an ESA with the Bank therefore effectively represent the eligibility criteria for participation in RITS.

RITS has been found to observe those Principles that relate to participation:

  • Participation and access (Principle 18). Policy around ESA eligibility is set by the Bank's Payments Policy Department, under the governance of the Payments System Board, and is available on the Bank's website.[5] The policy has been designed to be fair and open and promote competition in the provision of payment services by allowing access to all providers of third-party payment services, irrespective of their institutional status. ADIs are eligible by default, because these institutions are assumed to provide third-party payment services as part of their business. Similarly, Australian-licensed central counterparties (CCPs) and SSFs with payment arrangements that require Australian dollar settlement are also eligible to hold an ESA.[6] The ESA policy sets a number of risk-based participation requirements, including around operational capacity and access to liquidity, which are designed to reduce the likelihood that an individual participant experiences an operational or financial shock that disrupts the system more broadly. In accordance with Principle 18, however, the application of participation requirements aims to be proportional to a prospective participant's expected payments business in RITS. To reduce the operational burden on smaller RITS participants, any ESA holder (other than a systemically important CCP) with aggregate outgoing RTGS transactions of less than 0.25 per cent of the total value of RTGS transactions, may use an agent to settle its RITS transactions, rather than settling directly across its own ESA (see Principle 19, below).
  • Tiered participation arrangements (Principle 19). The Bank's ESA policy, described above, limits the scope for material risks to arise from tiered participation arrangements. Since only ADIs individually accounting for less than 0.25 per cent of the total value of RTGS transactions may settle through an agent, no individual indirect participant would be expected to pose material risk to either its agent or the system more broadly. Further, to reduce dependence on its agent, a bank that participates indirectly is required to maintain an ESA for contingency purposes. To ensure that RITS has sufficient information about indirect participation, ESA holders that participate indirectly are required to report the value and volume of their outgoing RTGS payments to the Bank on a quarterly basis. This information is in part used to monitor compliance with the 0.25 per cent threshold.
  • Efficiency and effectiveness (Principle 21). The Bank ensures that RITS meets the needs of its participants by consulting with RITS participants on a regular basis. In addition to holding RITS User Group meetings in Melbourne and Sydney every six months, the Bank liaises closely with industry through APCA and Australian Financial Markets Association (AFMA), and consults on proposed changes to RITS. Such consultation is key to setting and communicating RITS's business priorities. To ensure efficiency and effectiveness in RITS's operations, the Bank sets goals relating to minimum service levels and risk management, and monitors its performance relative to such goals (see Principle 17 below for further details).
  • Communication procedures and standards (Principle 22). RITS provides for submission of RTGS payment instructions via several channels, thereby providing participants with alternative options and facilitating wider access. In particular, instructions can be delivered via three linked external feeder systems – the SWIFT PDS, the Austraclear system and CHESS RTGS – or entered into RITS directly. In the year to end October 2013, instructions sent via the SWIFT PDS accounted for 92 per cent of the volume and 61 per cent of the value of RTGS transactions settled in RITS. These instructions use internationally accepted communication procedures and message standards set by SWIFT, and are transmitted over the SWIFT communications network. The procedures and standards for participants to send payments via the Austraclear and CHESS feeder systems are determined by ASX, the owner and operator of the Austraclear system and CHESS RTGS. Alternatively, payments can be manually entered directly into RITS using the RITS User Interface.
  • Disclosure of rules, key procedures, and market data (Principle 23). The RITS Regulations and associated contractual arrangements, which are available on the Bank's website, are supplemented by information papers and user guides that explain RITS requirements and functions. In addition, this Self-assessment satisfies the requirement to provide information on operations in accordance with the Disclosure Framework. The RITS fee schedule, which is reviewed regularly and was substantially revised in July 2012, is also publicly available on the Bank's website (for further details of the RITS pricing policy, see ‘Box C: RITS Pricing’)[7]. The Bank publishes on its website monthly data on the number and value of RITS payments, as well as a list of RITS participants.[8] CPSS and IOSCO are developing supplementary quantitative disclosure requirements for FMIs. The Bank is engaged in this work and, once finalised, will ensure that RITS complies fully with the disclosure requirements for payment systems. Finally, to further enhance participant understanding of RITS's operations, the Bank provides training to RITS participants, and also monitors participants' activity and operations to confirm that the RITS Regulations, as well as its procedures and features, are well understood and to identify any potential issues.

Box C: RITS Pricing

In July 2012, the Bank implemented a revised pricing structure for RITS services. The revised structure represented the first substantial change to RITS fees since the commencement of RTGS in 1998 and was designed to provide a more representative distribution of costs among RITS participants. The key changes to the fee structure were: a reduced RTGS settlement fee; abolition of separate fees for RITS cash transfers; the introduction of a fee based on values settled; and the introduction of annual fees for membership and for use of the Automated Information Facility. Setting fees based on values settled explicitly recognises the benefits from a safe and efficient service that provides for the settlement of high-value payments in real time.

The revised fee structure has been targeted to recover the Bank's operating costs. The Bank undertakes ongoing capital investment to ensure that RITS availability and resilience is appropriate to its critical role in the financial system. The Bank's policy has been that it will absorb investment costs, including the development costs associated with major improvements to functionality such as LVSS. This approach continues under the revised fee structure.

Participation in RITS in accordance with the policies described above is set out in Table 2. While a relatively wide range of institution types are RITS participants, participation in RITS is nevertheless highly concentrated in value terms.

Actions. The Bank commits to reviewing RITS's public disclosures once CPSS and IOSCO finalise supplementary quantitative disclosure requirements for payment systems. This is relevant to Principle 23 (Disclosure of rules, key procedures, and market data).

4.4 Operational Risk

4.4.1 Identifying and managing operational risk

RITS is designed to achieve a very high standard of operational reliability, with comprehensive policies and controls in place to: ensure reliability of IT infrastructure; monitor performance in real time and address potential problems promptly; maintain sufficient capacity; and manage change effectively. The Bank manages the operational risks arising from RITS within its organisation-wide risk management framework. Senior management of Payments Settlements Department are responsible for approving and reviewing operational risk management policies, under the governance of the Risk Management Committee. RITS's operational policies, procedures and controls are also subject to audit by Audit Department, with assistance from external consultants as required. Audit reports are reviewed by the Audit Committee, with copies provided to the Risk Management Committee.

Access to RITS is tightly controlled using a range of security controls. To gain access to the RITS User Interface, each user requires a RITS token with a valid and unique digital certificate; these are issued to users by a Certification Authority via a secure process. This system was updated in 2013. Access rights are controlled via unique logons for each user, creating an audit trail for each action within the system. All traffic across the various networks that are used to access RITS is encrypted end-to-end. The RITS application and supporting infrastructure is segmented using firewalls approved by the Australian Signals Directorate. Vulnerability assessments and penetration testing are undertaken periodically by external consultants.

RITS's key operational objective is minimum availability of 99.95 per cent. Availability is measured relative to the total number of hours that the system is open for settlement and reporting. Availability of RITS system components under the Bank's control has been 99.98 per cent or higher on an annual basis every year since the last Self-assessment, except for 2012 (Table 3; see also Section 4.4.3 for a discussion of outsourced systems). Availability during 2012 fell very slightly below the target – for the first time since 2007 – largely due to a single RITS incident during which a communications issue within the Bank's internal network disrupted the flow of payments to and from RITS. In response to internal and external reviews of the circumstances surrounding the incident, the Bank has refined its incident management procedures and implemented a number of enhancements to systems and monitoring processes (see ‘Box D: September 2012 RITS Incident’ for further details). Since the start of 2013, there have been no incidents involving Bank-controlled components of RITS.

RITS also has capacity targets. These include: a processing throughput target, which aims to ensure that RITS is able to process the peak day's transactions in less than two hours (assuming no liquidity constraints); and a projected capacity target, which specifies that RITS should be able to accommodate projected volumes 18 months in advance with 20 per cent headroom. RITS is regularly tested against these targets.

To ensure that RITS will continue to meet resilience and performance targets in future, a cycle of continuous improvement is in place. As part of this program, an upgrade of RITS's core infrastructure is currently underway and further enhancements to network and system monitoring will be implemented (see ‘Box D: September 2012 RITS Incident’).

Box D: September 2012 RITS Incident

On the morning of 14 September 2012, a communications issue within the Bank's internal network disrupted the flow of payments to and from RITS. Communications between RITS and both SWIFT and the Austraclear system were affected: connection to the SWIFT network was lost for 49 minutes; and the receipt of securities-related settlement instructions from the Austraclear system was interrupted for 18 minutes. Participant access to the RITS User Interface was also unavailable or unreliable for some participants for approximately 40 minutes. Message flows across the systems used for payments settled on a deferred net basis, including LVSS, were impacted for 82 minutes as priority was given to restoring RITS's RTGS feeder systems.

Once aware of the disruption, the Bank initiated a controlled restart of the systems required for the RITS User Interface and feeder system connectivity to re-establish connections to the RITS database. In some instances this took longer than normal because the systems were in an error state and could not be restarted using the automated processes. Services were brought back online in a staged manner.

Throughout the incident the RITS queue and core settlement processes continued to operate normally. Transactions already submitted to RITS continued to be tested for settlement and settled payment responses were queued for later release. Participants were kept informed of developments during the incident through SMS and email updates, which were distributed every 15 minutes. After restoring services, all payment instructions sent to RITS during the incident were subsequently processed and no payment instructions were lost. The incident resulted in an extension to the day session of 1 hour and 45 minutes.

In response to the incident, the Bank commissioned internal and external reviews with the aim of identifying both the root cause of the incident and actions to improve the efficiency and effectiveness of service restoration after a disruption. To date, the Bank has implemented a number of enhancements to RITS's operational risk procedures and controls that were recommended in the reviews, including:

  • improvements to its network and systems monitoring, which enhance the ability to identify the source of disruptions and thus improve times for service restoration
  • improvements to internal communications procedures during an incident
  • new functionality to enable the automated retrieval of SWIFT messages.

Further enhancements to network and system monitoring will be implemented over the coming period.

4.4.2 Business continuity arrangements

RITS's business continuity arrangements include detailed contingency plans, which are updated at least annually and are tested regularly, with recovery time targets up to 40 minutes, depending on the nature of the operational disruption. A primary control to reduce the impact of a contingency is a high degree of redundancy in RITS's architecture. RITS is synchronously mirrored at a geographically remote second site, which is permanently staffed. Full redundancy exists at both sites, ensuring that there is no single point of failure at either site. Since late 2009, live operations have been rotated between the two sites on a regular basis. Staff rotations and cross-training ensures that critical functions are not dependent on particular individuals. The Bank also has succession planning processes in place for key staff.

4.4.3 Outsourcing and other dependencies

Outsourced service providers in RITS mainly consist of Austraclear and SWIFT. Availability of the Austraclear system and SWIFT services has fluctuated around the RITS's minimum availability target of 99.95 per cent (Table 3, above). The Bank has entered into agreements with these service providers that set out the expected response times and level of support should an issue arise. Going forward, the close link between Austraclear and ASX Collateral (which is discussed in ‘Box B: ASX Collateral’, above) could also have implications for the operation of RITS.

RITS also has critical dependencies on utility providers. To manage these dependencies, each site is connected to two separate electricity grids. All external communications links to data centres are via dual, geographically separated links. Each data centre also has uninterruptable power supply.

In recognition that efficient operation of RITS is also dependent on the operational reliability and resilience of its participants, the Bank has introduced Business Continuity Standards for RITS participants that operate an ESA (see ‘Box E: Participant Business Continuity Standards’ for further details).[9]

Box E: Participant Business Continuity Standards

After extensive consultation with RITS participants, in May 2013 the Bank finalised its Business Continuity Standards for RITS participants. These standards aim to promote ‘high availability’ in RITS payments processing operations, requiring both resilience of system components and rapid recovery if failover to alternate systems is required. The Business Continuity Standards take into account the relevant requirements of APCA and the Australian Prudential Regulation Authority (APRA) and are intended to complement those requirements.

The Business Continuity Standards cover all systems and procedures involved in participants' processing of payments for submission to RITS, whether through RTGS feeder systems or through the LVSS – collectively referred to as ‘RITS payment operations’. The standards cover five high-level areas:

  • Business continuity planning. Participants must establish a business continuity plan that addresses a variety of scenarios that could affect its payment operations in RITS. These plans must prioritise RITS payment operations as a critical business activity.
  • System resilience. Participants must avoid the concentration of business operations and IT infrastructure. In particular, participants are required to establish an alternate site to conduct RITS payment operations.
  • Incident management. Participants must develop and maintain a clear procedural and communications framework for handling disruptions to their RITS payment operations.
  • Recovery timeframes. Participants must be able to resume their RITS payment operations within a designated timeframe in the event of an incident, which will depend on the nature of the incident and type of activity.
  • Business continuity planning testing. Participants must conduct regular testing of contingency arrangements for RITS payment operations including staffing, procedures and systems.

The Bank has set out its compliance expectations under each high-level Business Continuity Standard, with two levels of compliance to ensure that requirements are tailored to the scale of a participant's activities in RITS. Guidance notes provide further information on best-practice models and international precedents.

All participants have provided the Bank with an initial self-assessment against the standards, which also sets out any remedial work required to be in compliance. Most participants have assessed that they meet the Business Continuity Standards. For those participants that have indicated that they require remedial work, a timeframe to carry out such work will be agreed with the Bank. All participants are expected to be compliant by September 2015.

Based on the above information, RITS has been found to observe the Principle on Operational risk (Principle 17). Nevertheless, to ensure that RITS's operations keep pace with international best practice, plans are in place to implement enhancements in a few areas.

Actions. The Bank commits to further enhancing RITS's operations by pursuing the following actions relevant to the Principle on Operational risk (Principle 17):

  • upgrading RITS's core infrastructure as part of the Bank's commitment to continuously improve the resilience of RITS
  • implementing further enhancements to network and system monitoring
  • continuing to monitor RITS participants' compliance with the RITS participant Business Continuity Standards.

4.5 Legal Basis

The legal basis for all material aspects of RITS are set out in the RITS Regulations, which operate within the framework of relevant laws and regulations. RITS has been found to observe those Principles that relate to its legal underpinnings:

  • Legal basis (Principle 1). The Bank seeks external legal advice on material amendments to the RITS Regulations and associated contractual agreements, including on the interaction of such amendments, where relevant, with Australian laws and regulations. While the RITS Regulations are comprehensive, changes in functionality and activity since the launch of RITS have added to their complexity. The Bank has commenced a review of the RITS Regulations with the aim of identifying any areas in which the clarity of the RITS Regulations could usefully be improved.
  • Settlement finality (Principle 8). A critical aspect of the legal basis for RITS's operations is settlement finality. In accordance with Principle 8, the RITS Regulations state that settlement is final when the ESAs of the paying and receiving participants in RITS are simultaneously debited and credited, respectively. The irrevocability of payments settled in RITS is further protected by RITS's approval as an RTGS system under Part 2 of the Payment Systems and Netting Act. With this approval, a payment executed in RITS at any time on the day on which a RITS participant enters external administration has the same standing as if the participant had gone into external administration on the next day. Accordingly, in the event of insolvency all transactions settled on the day of the insolvency are irrevocable and cannot be unwound.

Actions. In the context of the Principle on Legal basis (Principle 1), the Bank will be conducting a comprehensive review of the RITS Regulations with the aim of identifying any areas in which the clarity of the RITS Regulations could usefully be improved.


Payments Settlements Department and Payments Policy Department are separate departments within the Bank's organisational structure, with separate reporting lines up to and including the level of Assistant Governor. [1]

Specifically, paragraph 1.23 of the Principles (p 13) states:

‘In general, the principles are applicable to FMIs operated by central banks, as well as those operated by the private sector. Central banks should apply the same standards to their FMIs as those that are applicable to similar private-sector FMIs. However, there are exceptional cases where the principles are applied differently to FMIs operated by central banks due to requirements in relevant law, regulation, or policy. For example, central banks may have separate public policy objectives and responsibilities for monetary and liquidity policies that take precedence. Such exceptional cases are referenced in (a) Principle 2 on governance, (b) Principle 4 on credit risk, (c) Principle 5 on collateral, (d) Principle 15 on general business risk, and (e) Principle 18 on access and participation requirements. In some cases, FMIs operated by central banks may be required by the relevant legislative framework or by a central bank's public policy objectives to exceed the requirements of one or more principles.’ [2]

This statement of the Bank's objectives in operating RITS is available at <https://www.rba.gov.au/payments-and-infrastructure/rits/>. [3]

By contrast, unintended interbank exposures can arise during the settlement process in systems that settle on a deferred net basis, since banks may update customer accounts when payment messages are exchanged, rather than awaiting the completion of interbank settlement. [4]

The Exchange Settlement Account Policy is available at <https://www.rba.gov.au/payments-and-infrastructure/esa/>. [5]

The policy in respect of CCPs was amended in 2012 to require that any Australian-licensed CCP that the Bank determines to be systemically important in Australia must settle its Australian dollar obligations across an ESA in its own name, or that of a related body corporate acceptable to the Bank. [6]

The RITS Schedule of Fees is available at <https://www.rba.gov.au/payments-and-infrastructure/rits/membership/schedule-fees.html> [7]

The RITS monthly transaction data are available at <https://www.rba.gov.au/statistics/tables/xls/c07hist.xls>. The list of current RITS participants is available at <https://www.rba.gov.au/payments-and-infrastructure/rits/membership/membership-list.html>. [8]

The BCS are not applicable to non-transaction participants or ESA holders that have appointed a settlement agent for their RTGS transactions. [9]