30214 Federal Register / Vol. 66, No. 108 / Tuesday, June 5, 2001 / Notices

18Competitive issues might be raised if the

Reserve Banks were to monitor in real time all

Fedwire funds transfers and NSS transactions but

not all ACH credit transactions. Private-sector ACH

operators that use the Federal Reserve’s Fedwirebased or enhanced net settlement service might

have some participants that experience rejected

settlement payments under URTM while most

Federal Reserve ACH credit transactions would not

be subject to real-time monitoring. Depository

institutions that are concerned about settlement

disruptions through private-sector ACH operators

might find the Federal Reserve’s ACH service more

attractive; however, these institutions might find

that certain benefits from using private-sector ACH

services sufficiently offset concerns about

settlement disruptions. In addition, under any

monitoring environment, depository institutions

meeting certain risk parameters would be required

to prefund their Federal Reserve ACH credit

transactions. For those institutions, the Federal

Reserve’s ACH service might not be more attractive

than private-sector ACH services.

19To analyze more fully the potential for payment

disruptions, Board staff developed a simulation of

URTM for Fedwire funds transfers, book-entry

securities transfers, and NSS transactions. The

URTM simulation for Fedwire funds, book-entry

securities, and NSS activity showed that under

current net debit cap levels, ABMS would delay

approximately 40 payments out of almost 500,000

per day. In addition, the average value of a delayed

payment was about $3.2 million and the average

delay was around an hour. Using the two-week

average net debit cap levels, the simulation showed

that ABMS would delay approximately 50

payments out of almost 500,000 per day and the

average value of a delayed payment was about $11.4

million with an average delay of about an hour.

20While the URTM simulation did not

demonstrate significant NSS transaction delays, the

Board notes that given the nature of the net

settlement service, the delay of any payment into

a net settlement arrangement would hold up

settlement for the entire arrangement.

21Under any monitoring environment, depository

institutions meeting certain risk parameters would

be required to prefund ACH credit transactions.

22These procedures are described in the Board’s

policy statement ‘‘The Federal Reserve in the

Payments System,’’ as revised in March 1990. (55

FR 11648, March 29, 1990).

finality and implementing URTM for

only a subset of those payments. One of

the Board’s primary concerns with

implementing URTM for only a subset

of payments, for example for Fedwire

funds transfers and NSS transactions, is

whether this would create an incentive

for liquidity constrained depository

institutions to move payments from

Fedwire and NSS to the ACH to avoid

the real-time monitor. Another concern

is whether implementing URTM for

only a subset of payments creates a

competitive advantage for the Federal

Reserve’s ACH service.18 To assess

better the effect of such policy changes,

the Board requests comment on all

aspects of URTM. The Board also

requests comment on the following

questions:

1. What would be the benefits and

drawbacks of URTM?

2. If the Federal Reserve were to

implement URTM, should it do so for

all payments with settlement-day

finality? If not, which payments should

the Federal Reserve include under

URTM? 19 20

3. If the Federal Reserve implemented

URTM for only Fedwire funds transfers

and NSS transactions, would this action

increase risk of large-dollar payments

moving from Fedwire or NSS to the

ACH? 21 Would this provide the Federal

Reserve with a competitive advantage in

providing ACH services?

4. What are the most significant

benefits and drawbacks of implementing

URTM for only Fedwire funds transfers

and NSS transactions initially and

continuing to evaluate moving other

payments to URTM as the Federal

Reserve and the industry gain more

experience with URTM?

5. What disruptions in the

government-securities market, if any,

could occur if the Federal Reserve were

to implement URTM for Fedwire bookentry securities transfers?

6. What disruptions in settlement

arrangements, if any, could occur if the

Federal Reserve were to implement

URTM for NSS transactions?

7. Would URTM lead to significantly

greater payment delays, or would there

be little effect?

III. Request for Comment

The Board requests comment on all

aspects of the potential policy options

outlined above, and on the benefits and

drawbacks of implementing these

options together or separately.

IV. Competitive Impact Analysis

The Board has established procedures

for assessing the competitive impact of

rule or policy changes that have a

substantial impact on payments system

participants.22 Under these procedures,

the Board will assess whether a change

would have a direct and material

adverse effect on the ability of other

service providers to compete effectively

with the Federal Reserve in providing

similar services due to differing legal

powers or constraints, or due to a

dominant market position of the Federal

Reserve deriving from such differences.

If no reasonable modifications would

mitigate the adverse competitive effects,

the Board will determine whether the

anticipated benefits are significant

enough to proceed with the change

despite the adverse effects.

The Board does not believe that the

policy options outlined above would

have a direct and material impact on the

ability of other service providers to

compete effectively with the Reserve

Banks’ payments services. The Board

believes that two of the daylight credit

policies outlined above, lowering singleday net debit caps and universal realtime monitoring, are generally more

restrictive than the current policies. The

Board plans to evaluate further whether

implementing URTM for only a subset

of payments creates a competitive

advantage for the Federal Reserve’s

financial services. More restrictive

Federal Reserve credit policies,

however, could encourage some

depository institutions to seek other

payment service providers, thereby

encouraging competition with the

Reserve Banks. While the two-tiered

pricing regime is generally more

consistent with private-sector practices,

the policy cannot be viewed as being

more restrictive or liberal until a more

definitive set of fees is recommended.

V. Paperwork Reduction Act

In accordance with the Paperwork

Reduction Act of 1995 (44 U.S.C. ch.

3506; 5 CFR 1320 Appendix A.1), the

Board has reviewed the policy statement

under the authority delegated to the

Board by the Office of Management and

Budget. No collections of information

pursuant to the Paperwork Reduction

Act are contained in the policy

statement.

By order of the Board of Governors of the

Federal Reserve System, May 30, 2001.

Jennifer J. Johnson,

Secretary of the Board.

[FR Doc. 01–13982 Filed 6–4–01; 8:45 am]

BILLING CODE 6210–01–P

FEDERAL RETIREMENT THRIFT

INVESTMENT BOARD

Sunshine Act Meeting

TIME AND DATE: 10:00 a.m. (EDT), June

11, 2001.

PLACE: 4th Floor, Conference Room

4506, 1250 H Street, N.W., Washington,

D.C.

STATUS: Open.

MATTERS TO BE CONSIDERED:

1. Approval of the minutes of the May

14, 2001, Board member meeting.

2. Thrift Savings Plan activity report

by the Executive Director.

CONTACT PERSON FOR MORE INFORMATION:

Thomas J. Trabucco, Director, Office of

External Affairs, (202) 942–1640.

Elizabeth S. Woodruff,

Secretary to the Board, Federal Retirement

Thrift Investment Board.

[FR Doc. 01–14178 Filed 6–1–01; 10:07 am]

BILLING CODE 6760–01–M