2015 Assessment of the Reserve Bank Information and Transfer System List of tables


Table 1: Summary of Progress against 2014 Recommendations
Recommendation Principle Progress
The Bank should continue its review of the RITS Regulations, with the aim of identifying any areas where the clarity of the RITS Regulations could be improved. 1. Legal basis Partly addressed.

The Bank has developed a revised version of the RITS Regulations. The revised version is designed to ensure that the clarity of the Regulations is improved, as well as making it easier to amend the Regulations to incorporate new services. Following consultation with participants, the Bank expects to adopt the new RITS Regulations in 2016.
The Bank should keep under continued review its approach to cyber security, and in particular its mechanisms for prevention and detection, and its plans to recover from a cyber-related incident 17. Operational risk Partly addressed.

During the Assessment period the Bank initiated a project to review and test the mechanisms in place to prevent a cyber-related incident. The first stage of this project involves a review of risks and a stocktake of existing security controls. The next stage will involve a comprehensive program of penetration testing. Based on the findings from the review and testing, the Bank will consider whether additional measures need to be put in place.

The Bank also initiated a project to review and consider options to improve RITS's ability to detect and recover from a disruption of service, or loss of software or data integrity, resulting from a wide range of operational disruptions, including a cyber attack. This project will include the identification of additional measures that could improve RITS's resilience in this area and an examination of the benefits, challenges and costs of implementing them.

Both projects are expected to be completed in 2016.
The Bank should examine the benefits, challenges and costs of implementing a range of measures that could further enhance the resilience of RITS and facilitate timely recovery from an operational incident. 17. Operational risk
The Bank should continue to monitor RITS participants' compliance with the new RITS participant Business Continuity Standards. 17. Operational risk Addressed.

The Bank received participants' latest annual self-certification statements against the new standards as at the end of 2014, at which time 48 of 58 RITS participants were compliant with the standards. Almost all of the remaining participants indicated that they expected to be compliant by the end of the transition period. The Bank will verify this when participants' provide their next self-certification statements in early 2016.
Table 2: RITS Ratings and Recommendations
Principle Rating Recommendation
1. Legal basis Observed The Bank should continue to work towards implementation of new RITS Regulations, with a view to improving their clarity.
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 The Bank should complete its analysis and testing of the mechanisms in place to prevent a cyber-related incident and consider whether additional measures need to be put in place.

The Bank should complete its project to review and consider options to improve RITS's ability to detect and recover from a disruption of service, or loss of software or data integrity, resulting from a wide range of operational incidents, including a cyber attack.

The Bank is encouraged to review its cyber-risk management arrangements in light of forthcoming CPMI-IOSCO guidance on cyber resilience for FMIs.
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  
24. Disclosure of market data by trade repositories Not applicable  
Table 3: Payments in Australia
2014/15, daily average(a)
  Number(b) Value(b) Interbank settlement value in RITS
'000s $ billion $ billion
RITS RTGS 43.9 167.8 163.3
SWIFT payments (HVCS) 40.5 103.8 103.7
Debt securities (Austraclear)(c) 3.2 52.0 47.5
RITS payments(d) 0.1 13.2 13.2
CLS 58.6 260.6 2.5
Retail payments 37,394.4 62.5 3.7
Direct entry(e) 12,248.9 55.6  
Cheques 600.7 4.8  
Credit/charge cards 8,610.2 1.2  
Debit cards 15,934.7 0.9  
Equity settlements (CHESS) 750.6 4.4(f) 0.5
Property settlements (PEXA) 0.01(g)

(a) Business days
(b) Includes payments between customers of the same financial institution
(c) Excludes intraday repurchase agreements
(d) Includes RITS cash transfers, the Bank's government direct entry obligations and Low Value Settlement Service payment obligations settled individually on a bilateral net basis
(e) Includes BPay
(f) Gross value of equity trades
(g) Net value of property settlement batches; each property settlement batch may involve a number of payments

Sources: ASX; CLS; RBA

Table 4: RITS Participation(a)
  Number of ESAs Number of payments(b) Value(b)
As at end October 2015 Per cent, year to end October 2015 Per cent, year to end October 2015
Major domestic banks 4 62.4 55.0
Foreign banks 35 31.6 35.4
Other domestic institutions 14 2.6 2.9
Clearing and settlement facilities and the Bank 5 3.4 6.7
Dormant accounts(c) 30
Total 88 100.0 100.0

(a) Excludes non-transactional RITS participants as they do not hold an ESA
(b) Outgoing payments
(c) Indirect RITS participants that maintain an ESA for contingency purposes

Source: RBA

Table 5: RITS Availability
Per cent
  Bank-operated systems External Feeder systems
2015(a) 99.774 99.896
2014 99.976 99.987
2013 99.989 99.914
2012 99.948 99.818
2011 99.997 99.981
2010 99.993 99.844

(a) 1 January to 30 September 2015

Source: RBA

Table A.1: List of Multilateral Net Batches in RITS
Linked system Transaction types Governance and ownership
CHESS Batch Primarily equity security transactions. The CHESS Batch is administered by ASX Settlement, which is owned by ASX Group. ASX Settlement is licensed as a clearing and settlement facility and subject to the Bank's Financial Stability Standards for Securities Settlement Facilities.
Low Value Settlement Service Cheque, DE (including the BPAY system) and card transactions. Each retail payment system has its own rules and procedures. These rules and procedures are determined by the system administrator (e.g. APCA), in consultation with its members.
MasterCard Batch MasterCard brand credit and debit card payments. MasterCard is a privately owned company incorporated in the US and listed on the New York Stock Exchange
PEXA Batches Property transactions. PEXA is owned by the Victorian, New South Wales, Queensland and Western Australian Governments, as well as a number of Australia's largest financial institutions.