2013 Self-assessment of the Reserve Bank Information and Transfer System 3. Summary of Ratings and Actions

The following table summarises the Bank's 2013 Self-assessment of RITS against the Principles.[1] In its assessment, the Bank has applied the approach and rating system set out in the Disclosure Framework. Under this rating system, a facility's observance of a standard may be rated as:

Observed – Any identified gaps and shortcomings are not issues of concern and are minor, manageable and of a nature that the facility could consider taking them up in the normal course of its business.

Broadly observed – The assessment has identified one or more issues of concern that the facility should address and follow up on in a defined timeline.

Partly observed – The assessment has identified one or more issues of concern that could become serious if not addressed promptly. The facility should accord a high priority to addressing these issues.

Not observed – The assessment has identified one or more serious issues of concern that warrant immediate action. Therefore, the facility should accord the highest priority to addressing these issues.

Not applicable – The standard does not apply to the type of facility being assessed because of the particular legal, institutional, structural or other characteristics of the facility.

RITS was found to observe all relevant Principles. The Bank nevertheless has governance arrangements in place to motivate and encourage continuous improvement in RITS's operations. Reflecting existing plans and matters identified in the Self-assessment, Table 1 sets out actions to be taken in some specific areas. The actions in the table are discussed in more detail in Section 4 and in Appendix A.

Table 1: RITS Ratings and Actions
Standard Rating Actions
1. Legal basis Observed
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.
2. Governance Observed  
3. Framework for the comprehensive management of risks Observed  
4. Credit risk Observed  
5. Collateral Observed  
6. Margin Not applicable  
7. Liquidity risk Observed  
8. Settlement finality Observed  
9. Money settlements Observed  
10. Physical deliveries Not applicable  
11. Central securities depositories Not applicable  
12. Exchange-of-value settlements Not applicable  
13. Participant default rules and procedures Observed  
14. Segregation and portability Not applicable  
15. General business risk Observed  
16. Custody and investment risks Observed  
17. Operational risk Observed
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 new RITS participant Business Continuity Standards.
18. Access and participation requirements Observed  
19. Tiered participation arrangements Observed  
20. FMI links Not applicable  
21. Efficiency and effectiveness Observed  
22. Communication procedures and standards Observed  
23. Disclosure of rules, key policies and procedures, and market data Observed
Reviewing RITS's public disclosures once CPSS and IOSCO finalise supplementary quantitative disclosure requirements for payment systems.
24. Disclosure of market data by trade repositories Not applicable  


The Principles for Financial Market Infrastructures, developed jointly by CPSS and IOSCO, are available at <http://www.bis.org/pub1/cpss101a.pdf>. [1]