Payments System Board Annual Report – 2009 Engagement with Industry

Liaison with Industry

Over 2008/09, the Reserve Bank consulted with industry participants on a number of issues. It also continued to liaise closely with the Treasury, the Australian Competition and Consumer Commission (ACCC), APRA and ASIC on matters including the retail payments system, clearing and settlement facilities, and policy issues arising from the global financial crisis.

On the payments side, the Reserve Bank finalised its consultation on the review of the payments system reforms in July and August 2008. In addition, it consulted in early 2009 on an Access Regime for the ATM system to support industry efforts to reform the ATM arrangements.

On the clearing and settlement side, the Reserve Bank consulted on two variations to the Financial Stability Standards. The first was a variation to the Financial Stability Standard for Central Counterparties to establish a regime for oversight of overseas central counterparties licensed to operate in Australia. As the regime was designed to apply to overseas facilities that are regulated in a ‘sufficiently equivalent’ regime overseas, the Reserve Bank also undertook consultation on the process it would use to assess sufficient equivalence of an overseas regulatory regime. The second was a variation to the Financial Stability Standard for Securities Settlement Facilities to require disclosure of data on equities securities lending. This consultation involved both bilateral consultation and a number of ‘round table’ discussions with ASX and participants in the securities lending market.

In addition, the Reserve Bank undertook a number of projects in the clearing and settlement area that involved consultation. At the request of the Minister for Superannuation and Corporate Law, the Reserve Bank and ASIC conducted a review of participation requirements in central counterparties. This involved substantial consultation with brokers active in the equity market as well as ASX. The Reserve Bank also worked with APRA and ASIC to conduct a survey of OTC derivatives in Australia, the outcome of which was a report highlighting some areas in which market practices could be strengthened. The Reserve Bank, APRA and ASIC opened a dialogue with market participants, key infrastructure providers and relevant industry associations to promote the enhancements outlined in the report.

In line with its liaison agreement with APCA, the Reserve Bank met with the APCA management after each APCA Board meeting – a total of 7 times in 2008/09 – as well as with the Board on one occasion.

Reserve Bank staff have made a number of presentations on payments system issues over 2008/09. The Chairman of the Board spoke on ‘Public Policy and the Payments System’ at the Ian Little Memorial Lecture in March 2009. The Deputy Chairman addressed participants at Cards and Payments Australasia in March 2009 on ‘Payments System Reforms: Innovation and Competition’ and the Card Payments Forum organised by APCA also in March 2009. The Head of Payments Policy gave presentations to APCA, Australian Settlements Limited, the Prepaid International Forum and the Cashcard Network Members Forum, as well as participating on a panel at Cards and Payments Australasia.

International Meetings

The Reserve Bank was represented on two international groups in 2008/09: the CLS Oversight Committee and the Executives' Meeting of East Asia-Pacific Central Banks (EMEAP) Working Group on Payment and Settlement Systems. The CLS Oversight Committee held two meetings in 2008/09 as did the EMEAP working group.

In July 2009, the Reserve Bank was invited to join the Bank for International Settlements' Committee on Payment and Settlement Systems (CPSS). The CPSS, which is comprised of senior officials from 23 central banks, serves as a forum to monitor and analyse developments in domestic payment, settlement and clearing systems as well as in cross-border and multicurrency systems.

In addition, the Reserve Bank has provided technical assistance on payments issues to a number of other central banks.