Second, upgrading the system to achieve compliance with the Lamfalussy standards for risk and liquidity management is not relevant because the Estonian system is not a net settlement system. However, a new system, called IBPS, has been designed to fully observe international standards and is under implementation. Under Article 87 of the Credit Institutions Act, payments of credit institutions must be settled through a payment system pursuant to the procedure established by the BoE. Several decrees issued by the BoE establish the time for settlement of payments, the rules for sending and receiving payment orders, and common account statements. The payment practices are determined by agreements between banks, service providers and customers. Specific legislation on payment instruments is needed including, inter alia, a description of instruments, customer identification methods, customer's obligation, issuing bank obligation, receiving banks obligations, irrevocability rules, and transfer of value rules.
Legislation governing different types of payment instruments is needed.
There is no explanatory document describing financial risks that participants could incur. However, participants are of the view that in practice their participation does not pose any significant risks. In addition, the new IBPS framework will include specific regulations and contracts that will cover this issue in a manner that is in observance of EU directives and ECB recommendations. The financial risks that participants could incur are not described in explanatory documents. However the new IBPS framework will cover this issue.