Source: https://rba.gov.au/payments-and-infrastructure/rits/self-assessments/2017/appendix-b.html
Timestamp: 2020-02-20 22:06:07
Document Index: 704552775

Matched Legal Cases: ['art 2', 'art 3', 'art 2', 'art 3', 'art 4', 'art 4', 'art 2', 'art 2', 'art 4', 'art 4']

Appendix B: Detailed Assessment of the Reserve Bank Information and Transfer System | 2017 Assessment of the Reserve Bank Information and Transfer System | RBA
2017 Assessment of the Reserve Bank Information and Transfer System Appendix B: Detailed Assessment of the Reserve Bank Information and Transfer System
This appendix sets out the detailed assessment of how well RITS observed the Principles developed by CPMI and IOSCO as at the end of March 2017. This Assessment was produced by the Bank's Payments Policy Department, which is the functional area responsible for oversight of the payments system, drawing on information provided by the Bank's Payments Settlements Department, which is the functional area responsible for operating RITS. The conclusions have been endorsed by the Payments System Board. In its assessment, Payments Policy Department have applied the rating system used in the CPMI-IOSCO Disclosure Framework. Under this framework, observance of each of the applicable Principles is rated according to the following scale:
Broadly observed – The assessment has identified one or more issues of concern that the FMI should address and follow up on in a defined time line.
The ratings of RITS against the relevant Principles are supplemented by detailed information under each key consideration that is relevant to the assessment. In assessing RITS, Payments Policy Department have relied on guidance on the Application of the Principles for Financial Market Structures to Central Bank FMIs published by CPMI and IOSCO in August 2015.[27]
RITS is owned and operated by the Bank. The RITS Regulations form the legal basis for all key aspects of RITS. The Bank seeks external legal advice on material amendments to the RITS Regulations and associated contractual agreements, including, where relevant, on the interaction of such amendments with Australian and New South Wales laws and regulations.
The Bank has recently completed a major restructure and rewrite of the RITS Regulations, which came into effect on 27 March 2017. The aim of the rewrite was to implement a ‘plain-English’ drafting style and remove redundant concepts and terminology. The RITS membership agreements were also simplified and consolidated into a single agreement, and the opportunity was taken update the master documentation for repurchase agreements (repos).
The legal basis of RITS is described in further detail under the following Key Considerations.
The legal basis of RITS is set out in the RITS Regulations, which cover the operation of RITS, and the rights and obligations of members and the Bank. Standard agreements are executed to bind each member to the RITS Regulations. In addition to the RITS Regulations, the following key aspects of RITS activities are supported by Australian legislation and additional contractual arrangements.
RITS accepts settlement instructions from approved feeder systems. Admission as a feeder system is by specific reference in the RITS Regulations. The RTGS feeder systems are the SWIFT PDS, Austraclear and CHESS RTGS.[28] The SWIFT PDS is administered by Australian Payments Network under its HVCS. The Bank and Australian Payments Network each have contractual arrangements with SWIFT covering the SWIFT PDS. The Austraclear and CHESS RTGS feeder systems are operated by Austraclear and ASX Settlement, respectively. Both entities are wholly owned subsidiaries of ASX. The Bank has separate contractual arrangements with Austraclear and ASX Settlement covering these feeder systems.
The RITS Regulations state that settlement is final when the ESAs of the paying and receiving members in RITS are simultaneously debited and credited, respectively. The irrevocability of payments settled in RITS is protected by RITS's approval as an RTGS system under Part 2 of the Payment Systems and Netting Act 1998 (PSNA). With this approval, a payment executed in RITS at any time on the day on which a RITS member enters external administration has the same standing as if the member had gone into external administration on the next day (in the case of a winding up) or as if the member had not gone into external administration (in the case of other forms of external administration). Accordingly, in the event of insolvency all transactions settled on the day of the insolvency are irrevocable and cannot be unwound simply because of the event of external administration (i.e. they are protected from the ‘zero-hour’ rule).
On 1 June 2016, changes to the PSNA became effective which, among other things, deal with circumstances in which a statutory manager or judicial manager has been appointed to a participant. The purpose of statutory management or judicial management is to resolve a regulated financial institution, while maintaining continuity of their vital economic functions (such as facilitating payments). The changes to the PSNA clarify that resolution of a financial institution is a form of non-terminal administration, and that a payment executed in RITS when a member has gone into non-terminal administration has the same effect it would have had if the member had not gone into non-terminal administration. In the absence of this change, it may have been necessary to suspend a member that is subject to statutory management or judicial management to avoid the risk that payments made in the days after the member entered resolution could be unwound simply because it had entered external administration one or more days earlier. This may have inhibited resolution of the member. This change facilitates the ongoing participation in RITS by a member under statutory management or judicial management, but it does not limit the ability of the Bank to suspend such a member from RITS.
In the unlikely event that RITS is unavailable for a significant period of time, payments arising from Austraclear and the SWIFT PDS can be settled using ‘fallback arrangements’. These arrangements involve the multilateral netting and settlement of transactions arising from those systems. The irrevocability of settlement under these fallback arrangements is supported by the approval of Austraclear and HVCS as netting arrangements under Part 3 of the PSNA. The approval of HVCS establishes the legal basis for the netting of SWIFT PDS payments.
While RITS is primarily an RTGS system, it also provides for the final settlement of net obligations arising in other payment and settlement systems. This is either through the LVSS or the batch feeder functionality.[29] RITS's approval under Part 2 of the PSNA does not ensure the legal certainty of the netting of the underlying obligations. Nevertheless, the majority of the value of obligations settled in these multilaterally netted batches originates from the Australian Payments Network clearing streams and transactions settled in the CHESS batch, which are approved netting arrangements under Part 3 of the PSNA.
The enforceability of repos in the event of a default also requires a high degree of legal certainty. Repos with the Bank are governed by an international standard agreement – Securities Industry and Financial Markets Association (SIFMA)/International Capital Market Association (ICMA) GMRA – as amended by exhibits under the RITS Regulations. This agreement sets out, among other things, what constitutes default and the consequential rights and obligations of the parties. In the event of a default, the agreement allows the non-defaulting party to terminate the agreement, calculating the net obligation based on the prevailing market value at the time the contract is closed out. Close-out netting provisions included in repo contracts with RITS members provide for the immediate liquidation of collateral in the event of default. This right is supported by Part 4 of the PSNA.
As part of the changes to the RITS Regulations, the Bank moved from the 2000 version of the GMRA to the 2011 version. The 2011 GMRA reflects lessons from the global financial crisis and the collapse of Lehman Brothers. It simplifies the calling of an event of default, gives the non-defaulting party more flexibility in determining the value of securities as part of the close-out procedure, and allows the close-out amount to be set off against any other amounts payable by the non-defaulting party to the defaulting party. The latest version of the GMRA also broadens the definition of ‘act of insolvency’, which provides the flexibility to deal with insolvency events in a wide range of jurisdictions.
To facilitate a clear understanding of RITS rules and procedures, the RITS Regulations are supplemented by user guides and other documentation that explain RITS requirements and functions. This material facilitates existing and prospective members' understanding of the RITS Regulations and the risks they face by participating in RITS. The Bank has recently completed a major restructure and rewrite of the RITS Regulations, which came into effect on 27 March 2017. The aim of the rewrite was to implement a ‘plain-English’ drafting style and remove redundant concepts and terminology. The RITS membership agreements were also simplified and consolidated into a single agreement, and all RITS members were required to execute the new RITS Membership Agreement.
At a high level, the legal basis for RITS is articulated in a clear and understandable manner on the Bank's website and the RITS Information Facility.[30] The information paper on the RITS Regulations provides further detail on RITS's legal basis.[31]
The RITS Regulations are governed by New South Wales law and require that all members submit to the non-exclusive jurisdiction of the courts of New South Wales. Since 2011, the Bank has required foreign RITS applicants to provide a legal opinion affirming that the RITS membership legal documents constitute valid, legally binding and enforceable obligations.[32] This opinion must cover whether the courts in the home jurisdiction of the applicant will give effect to the choice of New South Wales law as the governing law and whether the judgement of an Australian court would be enforceable in the home jurisdiction without retrial or re-examination. The Bank has communicated to foreign members that they may be required to provide a legal opinion subsequent to executing the new RITS Membership Agreement. The Bank expects all overseas-domiciled members, except those who joined RITS since 2014 and have signed the new agreement under the same or substantively similar signing authority as the original agreement, to provide this legal opinion.
RITS is owned and operated by the Bank. Since it is not operated as a separate entity, the management and operation of RITS fall under the governance structure of the Bank, and are subject to the Bank's normal oversight, decision-making and audit processes. The Bank has clear and transparent governance arrangements, which are publicly available on the Bank's website. The specific objectives in relation to the Bank's operation of RITS are also published on its website. These are consistent with the high-level objectives of the Bank, which emphasise the stability of the broader financial system and the welfare of the Australian people. Accordingly, the Bank aims to provide infrastructure through which settlement obligations arising from the exchange of high-value payments and debt securities settlements can be extinguished in a safe and efficient manner. To ensure that the interests of relevant stakeholders are taken into account, the Bank engages in routine liaison with members and consults on material changes to operational arrangements.
Oversight of RITS is carried out by the Payments Policy Department, within the policy framework for which the Payments System Board has ultimate responsibility.
Details of the governance arrangements for RITS are described under the following Key Considerations.
Note: In line with the CPMI-IOSCO guidance on the Application of the Principles to Central Bank FMIs, as RITS is operated as an internal function of the Bank, Key Consideration 2.3 and 2.4 are not intended to constrain the composition of the Bank's governing body or that body's roles and responsibilities.
The high-level objectives of the Bank are set out in the Reserve Bank Act 1959. The Bank's duty is to contribute to the stability of the currency, maintenance of full employment, and the economic prosperity and welfare of the Australian people. Stability of the financial system is also a longstanding responsibility of the Bank – a mandate confirmed by the Australian Government when it introduced significant changes to Australia's financial regulatory structure in July 1998.[33]
The Bank's website states its specific objectives in relation to its operation of RITS.[34] In particular, the Bank's objective in developing and operating RITS is to provide the infrastructure through which settlement obligations arising from the exchange of high-value payments and debt securities settlements can be extinguished in a safe and efficient manner. The design of RITS ensures that there is no build-up of settlement exposures associated with high-value transactions, which in turn promotes the stability of Australia's financial system. Reflecting the critical importance of RITS to the Australian financial system, the Bank aims to operate RITS at an extremely high standard of availability and resilience, and to ensure that its settlement services continue to evolve to meet the changing needs of the broader payments system.
Decisions concerning the operation of RITS and ESAs are required to be consistent with the policy environment determined by Payments Policy Department, which under the governance of the Payments System Board carries out regulatory oversight of RITS and other FMIs licensed in Australia. The broad mandate of the Payments System Board, which is set out in the Reserve Bank Act, places a high priority on the safety and the efficiency of the wider Australian payments system.[35]
Information on the Bank's governance arrangements for RITS is documented on the Bank's website and described in section A.3.[36]
The Bank's governance arrangements reflect relevant provisions of the Reserve Bank Act and the Public Governance, Performance and Accountability Act 2013. In accordance with the Reserve Bank Act, the Governor is responsible for the management of the Bank and is therefore ultimately responsible for the operation of RITS. In fulfilling his responsibilities to manage the Bank, in particular under the Reserve Bank Act and as the accountable authority under the Public Governance, Performance and Accountability Act, the Governor is assisted and supported by the Executive Committee, which is comprised of the Bank's most senior executives. The Executive Committee is the key decision-making committee of the Bank for matters of an administrative and management nature that have strategic, Bank-wide or external significance. Accordingly, major decisions related to RITS are considered by the Executive Committee.
Decisions affecting the day-to-day operations, customer relations and development of RITS have been delegated to the Bank's Payments Settlements Department. Payments Settlements Department is part of the Bank's Business Services Group, which is headed by an Assistant Governor who reports to the Governor and Deputy Governor. Clear internal procedures are in place to elevate day-to-day operational matters within Payments Settlements Department and other areas of the Bank, as appropriate.
As an independent central bank and statutory body, the Bank is ultimately accountable to the Parliament of Australia. Since 1996, the Governor and senior officers of the Bank have appeared twice yearly before the House of Representatives Standing Committee on Economics to report on matters under the responsibility of the Bank. The Reserve Bank Act also requires that the Bank inform the Australian Government of its policies ‘from time to time’. In addition, to fulfil its obligations under the Public Governance, Performance and Accountability Act, the Bank prepares an annual report for presentation to the Treasurer and tabling in the Parliament.[37]
As described in Key Consideration 2.2, the Governor, with assistance from the Executive Committee, is ultimately responsible for the management of the Bank, including the operation of RITS. The roles and responsibilities of the Governor are set out in the Reserve Bank Act and the Public Governance, Performance and Accountability Act. The roles and responsibilities of members of the Executive Committee are set out in relevant position descriptions.
In recognition of the Governor's responsibility for maintaining a reputation for integrity and propriety on the part of the Bank, the Governor and other members of the Executive Committee are subject to the Code of Conduct for Reserve Bank Staff, which places a high priority on integrity and has provisions that address potential conflicts of interest. Specific Bank policies deal with potential conflicts of interest arising from the Bank's roles as the principal regulator of the payments system and as provider of banking services to the Australian Government.[38]
The Bank has human resources policies in place to help ensure that management positions are filled with employees with the appropriate skills, incentives, experience and integrity to perform their duties. The Bank has formal performance management arrangements, which help to clarify the expectations of supervisors and employees and ensure that timely feedback is provided. Recruitment and selection at the Bank is based on the suitability of an applicant to carry out the specific requirements of the position to be filled, having regard to the applicant's ability to perform the duties of the position, relevant experience, relevant training and qualifications, and willingness to meet any particular requirement specified in the position description. Bank staff are subject to the Code of Conduct for Reserve Bank Staff (see Key Consideration 2.3).
The Bank also aims to offer remuneration packages that attract employees able to perform their duties to a high standard. To this end, independent consultants are engaged from time to time to ensure that remuneration policies are consistent with market practice. The Remuneration Committee of the Reserve Bank Board is kept informed of the remuneration arrangements for Bank staff.
The Bank's risk management framework is set out at a high level in the Bank's Risk Management Policy.[39] Risks associated with monetary and payments policies are the direct responsibility of the Reserve Bank Board and the Payments System Board, respectively. The Boards review management of these risks annually as part of their decision-making processes. The Risk Management Policy is complemented by a Risk Appetite Statement, which provides an outline of the Bank's appetite for and approach to managing its most significant risks, including strategic, financial, people and operational risks. The Risk Appetite Statement is published on the Bank's website.[40]
The risk management framework, including the Risk Management Policy and Risk Appetite Statement, is governed by the Risk Management Committee, in accordance with the Risk Management Committee Charter. This Committee consists of members of the executive team who are responsible for the Bank's operational areas or key support functions. It is chaired by the Deputy Governor and comprises: the Assistant Governors for Business Services, Corporate Servicesand Financial Markets; the Chief Financial Officer; the Chief Information Officer; the Heads of Audit Department, Human Resources Department, Information Department and Risk and Compliance Department; and the General Counsel. The Risk Management Committee meets six times a year, or more frequently if required, and reports on its activities to both the Executive Committee and the Reserve Bank Board Audit Committee.
In circumstances including a significant disruption to the Bank's operations that affects several business areas, the Governor may delegate responsibility for coordination of the Bank's response, either to the Bank's Crisis Management Group or an individual. The Crisis Management Group's membership is composed of the Governor (leader); the Deputy Governor (alternate leader); other members of the Executive Committee, the Heads of Risk and Compliance, Facilities Management, the Chief Information Officer and Senior Manager (Communications Division, Secretary's Department). The Chief Warden may also attend. The Crisis Management Group responds to crises and emergencies in accordance with the Bank's Incident Management Framework.
Payments Settlements Department also maintains plans that address decision making in crises and emergencies. These plans cover operational disruptions (see Principle 17) and the default of a RITS member (see Principle 13). The plans are required to set out how Payments Settlements Department would communicate with the Crisis Management Group during a disruption.
The Bank's governance arrangements ensure accountability and transparency to RITS members and other relevant parties. To ensure the interests of relevant stakeholders are taken into account, the Bank engages in routine liaison with members and consults on all material changes to operational arrangements (see Principle 21). All decisions affecting the operation of RITS are advised to members. Policy decisions that affect RITS are also communicated to the public through media releases. Major decisions and the reasons for them are also explained in the Reserve Bank Annual Report and, if relevant, the Payments System Board Annual Report.
The Bank has a well-established risk management framework which facilitates the identification, assessment and treatment of all risks – including those arising from its operation of RITS – at both an enterprise (‘top-down’) and business (‘bottom-up’) level. Under the Bank's Risk Management Policy, Payments Settlements Department aims to identify in a single Risk Register all risks that might impact its ability to operate RITS in a safe and efficient manner. This includes risks arising from interdependencies with members, other FMIs or service providers. The Risk Register is updated at least annually, or when material changes to operations or the business environment occur. Payments Settlements Department also designs and applies appropriate controls to mitigate identified risks. This high level framework is supported by more detailed policies (see Principles 4, 5, 7 and 17) and a governance structure to oversee the Bank's risk management activities (see Key Consideration 2.6).
The framework for the comprehensive management of risks in RITS is described in further detail under the following Key Considerations.
Note: In line with the CPMI-IOSCO guidance on the Application of the Principles for Financial Market to Central Bank FMIs, since RITS is owned and operated by the Bank as one of the services which the Bank has undertaken to provide, the Bank's ability to ensure continuity of operations of the FMI as necessary in extreme financial circumstances means that the requirements to prepare recovery and orderly wind-down plans do not apply. In addition, since intervention by a resolution authority is not relevant, requirements to support resolution planning or intervention by a resolution authority in the operation or ownership of the FMI do not apply. Accordingly, the Bank has not assessed RITS against Key Consideration 3.4.
The Bank's risk management framework is set out under Key Consideration 2.6. Under this framework, Payments Settlements Department is required to identify all of the risks that might impact its ability to operate RITS in a safe and efficient manner in a single Risk Register. Risks are categorised at a high level into strategic, credit, liquidity and operational risks, and further sub categorised into more detailed risk groups (e.g. legal and information technology risks are sub categories of operational risk). For each risk that has been identified, Payments Settlements Department sets out the potential impact and probability of the risk occurring, and also identifies existing controls and mitigation strategies (including contingency plans) to reduce the likelihood and/or impact of the risk crystallising. Where a risk is co-managed by another business area – for example, some RITS operational controls are implemented by the Bank's Information Technology Department – this must be acknowledged by the other business area.
The Bank's Risk Management Policy requires that Payments Settlements Department reviews and updates its register of risks annually and, after any major change to the Department's risk environment, to reflect any changes in risks and controls that have occurred. As part of this process, any residual risks identified in the Risk Register that are outside of the Department's risk appetite or agreed tolerance levels must be appropriately escalated. The Department's risk appetite must be consistent with the Bank's Risk Appetite Statement.
Given the design of RITS, members do not pose liquidity or credit risks to the Bank as operator of RITS (see Principles 4 and 7). RITS membership requirements aim to reduce the likelihood that an individual member would disrupt the operation of RITS. If a member does not meet these membership requirements, the Bank may apply sanctions to, or impose additional requirements on, that member (see Principle 18).
The Bank is not exposed to credit risk from the settlement of payments between RITS members. These payments are settled using funds in members' ESAs, which cannot be overdrawn, and the Bank does not guarantee any transaction submitted for settlement in RITS. In the event of the default of a member, the Bank would not be exposed to a loss in its role as operator of RITS. Accordingly, RITS does not maintain financial resources to cover the default of a member. In addition, the RTGS mode of settlement in RITS is designed to ensure that unintended credit risk does not arise between members during the settlement process.
The Bank does, however, incur credit risk in the provision of liquidity to ‘approved’ RITS members through Standing Facilities in support of payments activity (see section A.7 for more information on these facilities). This risk is managed by purchasing high-quality securities under a repo, applying a conservative haircut to the securities, and collecting mark-to-market margin (see Principle 5).
Credit risk in RITS is described in further detail under the following Key Considerations.
The Bank does, however, incur credit risk in the provision of liquidity to approved RITS members under its Standing Facilities to support payments activity. This risk is primarily managed by purchasing securities under repo, in accordance with the Bank's risk management framework. The Bank also manages the credit risk arising from its Standing Facilities by restricting the counterparties that it enters into a repo with. In particular, to access the Bank's Standing Facilities, a RITS member must be an ESA holder, a member of Austraclear, subject to an appropriate level of regulation, and able to ensure efficient and timely settlement of transactions within the Austraclear system.
Under the Bank's risk management framework, responsibility for approving and reviewing collateral eligibility lies with the Domestic Markets Department, with oversight from the Risk Management Committee. The policies, procedures and controls implemented to mitigate credit risk are subject to audit by Audit Department. The Bank's risk management framework is reviewed annually (see Key Consideration 2.6 for further detail on the Bank's risk management framework).
The RTGS mode of settlement in RITS is also designed to ensure that unintended credit risks do not accumulate between members during the settlement process. For payments using the SWIFT PDS, transactions are settled across ESAs in RITS prior to the payment messages being sent to the receiving participant. Austraclear transactions submitted to RITS for settlement generally represent the cash legs of debt security transactions, which are settled on a delivery-versus-payment model 1 basis to mitigate the credit risk associated with the settlement process. Since RITS cash transfers are payments between two ESA holders unintended credit risk would not arise.
Under the Bank's risk management framework, Domestic Markets Department has responsibility for identifying and managing the credit risks that arise from its activities. For each credit risk identified, the Domestic Markets Department sets out the potential impact and probability of the credit risk crystallising, and, where possible, the existing controls and mitigation strategies. These controls are reviewed and signed off by management annually, or when there are material changes to the Bank's risk environment.
The objective of the Bank's domestic market operations is to implement monetary policy and support the smooth functioning of the payments system and financial stability. To manage the risks to its balance sheet, the Bank sets eligibility criteria for securities in its operations. Overall, the Bank's collateral policies relating to its role as provider of liquidity to approved RITS members are consistent with this Principle. The Bank only purchases highly rated debt securities denominated in Australian dollars when providing liquidity to approved members' ESAs. Collateral is conservatively valued and subject to haircuts, and mark-to-market margin is maintained on a daily basis.
The Bank's collateral policies are described in further detail under the following Key Considerations.
Note: Consistent with the CPMI-IOSCO guidance on the Application of the Principles to Central Bank FMIs, this Principle should not constrain the Bank's policies on what it accepts as eligible collateral in its lending operations.
The Bank provides liquidity to approved RITS members via OMOs and via its Standing Facilities. Under these facilities, a bank can enter into a repo with the Bank, exchanging outright title to eligible securities in return for the credit of funds in its ESA with an agreement to reverse the transaction before the end of the day (intraday repo) or on an ‘open’ basis if permitted by the Bank (see A.4 for more information on the Standing Facilities available). Eligible members can also source liquidity by participating in the Bank's daily OMOs, which are aimed at providing sufficient liquidity in the overnight interbank market so as to maintain the cash rate at its target. These transactions usually involve counterparties selling debt securities to the Bank either under repo or outright.[41]
The Bank only purchases highly rated debt securities denominated in Australian dollars under repo. This policy applies to all of the Bank's domestic operations, irrespective of whether the repos are contracted under the Bank's Standing Facilities or in OMOs. The policy is made publicly available on the Bank's website and is reviewed from time-to-time.[42] Eligible securities are generally restricted to highly liquid securities issued by entities with high credit quality, including those issued by: the Australian Government; the central borrowing authorities of the state and territory governments (semi-government securities); certain supranational organisations, foreign governments and government agencies with an explicit government guarantee; investment grade ADIs; and the senior AAA-rated tranches of approved asset-backed securities (ABS).
The security must be denominated in Australian dollars.
Securities accepted as collateral must generally meet a minimum credit rating.[43]
ABS must be tradeable in the secondary market and must be based on a true sale of assets into a bankruptcy remote special purpose vehicle.
If the above conditions are met, Australian Government and semi-government securities are automatically eligible collateral. All other securities are subject to an initial approval process. The Bank will not purchase securities under repo until the approval process for eligibility is complete and the securities are added to the Bank's list of eligible securities.[44]
To enhance its risk management of ABS, since 30 June 2015, the Bank has required the issuers of these securities (or their appointed information providers) to provide more detailed information in order for these securities to be eligible for repo with the Bank.[45] The new criteria were introduced primarily to mitigate risks arising from the Bank's potential exposure to ABS under its Standing Facilities. This contingent exposure has increased significantly due to the implementation of open repos and the Committed Liquidity Facility. The additional information, which must be kept up to date, covers both transaction-related data as well as information on the underlying assets (i.e. loan-level data).
Upon request by a member for a related-party exemption, the Bank may purchase certain related-party ABS under repo through its Standing Facilities. However, these securities are subject to an additional haircut and additional reporting requirements. Relatedness thresholds also apply beyond which the Bank will not permit the use of the security, irrespective of the size of the haircut. The Bank considers each of the following parties to be related to an asset-backed security: the sponsor of the issuing trust; the loan originators; servicers; swap counterparties; liquidity providers; and guaranteed investment contract providers to the issuing trust. The magnitude of any additional haircut will depend on the nature of the relationship between the member and the ABS.
In the event of insolvency, the close-out netting provisions included in the repo agreements allow the Bank to close out or terminate the second leg of the repo immediately. This right is protected by Part 4 of the PSNA. Where an approved member sells securities issued by a third-party issuer as collateral, both the member and the issuer of the security would have to fail for the Bank to potentially incur a financial loss. In the event that an approved member that had provided asset-backed securities and the issuing trust failed, the Bank would have recourse to the underlying assets (e.g. the residential mortgage loan pool).
The Bank applies haircuts (initial margin) to all securities purchased under repo.[46] For operational simplicity, uniform haircut rates are set for broad groups of securities rather than for individual securities, with an additional adjustment for approved related-party ABS depending on the degree of credit support provided to the transaction by the sponsor. Haircuts are set to cover the maximum expected decline in the market price of the security, at a confidence level of at least 95 per cent based on a look back period that includes stressed market conditions. The key inputs to this calculation are market prices, the maturity of the securities in the relevant asset classes and the credit ratings of the securities. The Bank reserves the right to review haircuts at any time. The haircut schedule is made publicly available on the Bank's website.[47]
The Bank also maintains mark-to-market (variation) margin on a daily basis to cover changes in the value of its portfolio of securities.[48] To do this, the Bank calculates an exposure amount against each counterparty each day in respect of all securities held under repo based on the closing prices of the preceding business day. Where the Bank's net exposure to a counterparty is greater than $1 million and represents more than 1 per cent of the net repurchase amounts agreed with that party, the Bank will call for mark-to-market margin equal to its net exposure.[49] Similarly, the Bank will meet requests for mark-to-market margin from a counterparty when it has a net exposure to the Bank greater than $1 million and where that net exposure represents more than 1 per cent of the net repurchase amounts agreed with that party.
The Bank routinely monitors transaction and collateral summary reports to ensure that the Bank is not exposed to large collateral concentration and liquidation risks. The key factor considered by the Bank is the depth of the market for each security when compared with the Bank's holdings of that security. This mitigates the risk of a price impact from liquidation of a large collateral holding.
The Bank mitigates the risks associated with cross-border collateral by imposing additional restrictions. The only cross-border collateral that the Bank currently accepts is very highly rated Australian dollar-denominated securities issued or guaranteed by a foreign government or issued by a supranational. The terms and conditions of these securities must be governed by Australian law. In addition, because certain cross-border securities may be less liquid than domestic securities, the Bank applies higher haircuts to these securities. There is no operational risk associated with differences in time zones since all collateral must be lodged in Austraclear. The Austraclear system and RITS have similar operating hours.
The Bank relies on a well-designed and operationally flexible trade entry and collateral management system to manage the securities it purchases under repo. This system is an integrated trading, middle-office and back-office system, and has been extensively customised for the Bank. The system supports the buying, selling, margining, substitution and liquidation of securities in a timely manner. Transactions involving the exchange of securities with approved members are recorded and tracked in this system.[50] In addition, the system facilitates pricing of securities, application of haircuts by default, collateral substitutions, margin maintenance and coupon passes.[51] The Bank has developed within this system a large number of analytical reports to monitor counterparty and collateral exposures, repo and outright portfolio holdings, daily activity summaries and other analytics associated with the Bank's domestic operations (both for OMOs and Standing Facilities). The Bank ensures that there are sufficient resources to maintain its trade entry and collateral management system to a high standard.
Since February 2014, RITS members have had the option to use ASX Collateral services to deliver a subset of eligible securities under certain types of repos.[52] ASX Collateral is a collateral management service that acts as an agent to automate the allocation and optimisation of collateral in respect of securities held in Austraclear.[53] As agent, ASX Collateral is responsible for ensuring that securities delivered to the Bank's Austraclear account using its service are appropriately valued and meet the Bank's eligibility requirements. ASX Collateral also offers extensive reporting functionality, including reports on collateral transactions and securities held.
RITS conducts its settlements on an RTGS basis and does not guarantee settlement. The Bank, as operator of RITS, does not therefore assume liquidity risk through these operations. Accordingly, many of the requirements under this Principle – including those around liquidity stress testing, monitoring, and the maintenance of a pool of liquid assets – do not apply.
However, settling payments on an RTGS basis does place liquidity demands on members. RITS assists members in the management of their liquidity requirements through its liquidity-efficient design, the provision of liquidity through Standing Facilities, and the provision of real-time information on transactions and ESA balances. The Bank's operational staff also continuously monitor settlement activity and member balances in RITS for evidence of any disruption to the flow of liquidity, which could occur if a member experienced an operational or financial problem. RITS's membership requirements aim to reduce the probability that such problems arise.
Liquidity risk in RITS is described in further detail under the following Key Considerations.
RITS conducts its settlements on an RTGS basis and does not guarantee settlement. The Bank, as operator of RITS, does not therefore assume liquidity risk in its operations. Since members face liquidity risks, however, RITS assists members in their liquidity management through: its liquidity-efficient design; the provision of liquidity through Standing Facilities; the provision of real-time information on transactions and ESA balances; and the provision of tools to manage their payments and liquidity (see section A.4). Furthermore, RITS's membership requirements aim to reduce the probability that a member experiences an operational or financial problem that could disrupt the flow of liquidity in the system (see Principle 18).
Since RITS does not assume liquidity risk, there are no relevant funding flows for RITS to measure and monitor. In managing operational risk, the Bank's operational staff continuously monitor the flow of liquidity and payments at both a system and participant level for evidence of any disruption to the flow of liquidity, which could occur if a member experienced an operational or financial problem (see Principle 17). If such a disruption were observed, the Bank would liaise with members to mitigate the impact. To further mitigate possible disruption under such a scenario, members are required to inform the Bank in the event of any operational problem, and the RITS Regulations also set out actions that the Bank may take in response to a member default (see Principle 13).
7.3 A payment system, including one employing a DNS mechanism, should maintain sufficient liquid resources in all relevant currencies to effect same-day settlement and, where appropriate, intraday or multiday settlement, of payment obligations with a high degree of confidence under a wide range of potential stress scenarios that should include, but not be limited to, the default of the participant and its affiliates that would generate the largest aggregate payment obligation in extreme but plausible market conditions.
Since the Bank does not assume liquidity risk as operator of RITS, the requirement to test the sufficiency of its liquid resources does not apply.
The RITS Regulations include rules and procedures that govern the management of a member default (see Principle 13). Since the Bank does not assume liquidity risk as operator of RITS, the requirement to establish rules and procedures to address unforeseen and potentially uncovered liquidity shortfalls and replenish any liquid resources do not apply.
RTGS payments in RITS are settled individually in real time. The RITS Regulations specify that settlement is final when the ESAs of the paying and receiving RITS members are simultaneously debited and credited, respectively. The irrevocability of payments settled in RITS is further protected by RITS's approval as an RTGS system under Part 2 of the PSNA.
RITS's arrangements for ensuring finality of settlements are described in further detail under the following Key Considerations.
The settlement of a payment in RITS is final and irrevocable when the ESAs of the paying and receiving RITS members are simultaneously debited and credited.[54] The point of settlement is clearly defined in Regulation 13 of the RITS Regulations. As explained under Key Consideration 1.1, this is further protected by RITS's approval as an RTGS system under Part 2 of the PSNA.
RTGS payments in RITS are settled individually in real time. Although settlements occur in real time, a payment submitted to the RITS queue may remain there if the payer chooses not to settle the transaction (e.g. if the payer has set the status of the transaction to ‘deferred’) or has insufficient funds. Any payments that are not settled at the end of the last session during which the transaction was eligible for settlement are automatically removed from RITS but may be resubmitted for settlement when the system reopens (for more information on RITS session times refer to section A.6).
Under Regulation 12.2 of the RITS Regulations, a participant can unilaterally revoke its outgoing RTGS payments at any time prior to settlement. RITS cash transfers can be revoked via the RITS User Interface, while payments sent via a feeder system must be revoked via that feeder system.
RITS conducts its money settlements in central bank money across members' ESAs at the Bank. Money settlements in RITS are described in further detail under the following Key Considerations.
RITS is not an exchange-of-value settlement system. It does not perform the settlement of foreign exchange transactions or securities transactions. RITS does, however, facilitate the settlement of linked securities, foreign exchange and property transactions in other systems, assisting to eliminate principal risk in those systems. In particular, RITS settles the interbank obligations arising from the cash leg of delivery-versus-payment debt and equity security transactions in Austraclear and ASX Settlement, respectively.[55] RITS is also used to fund the Australian dollar leg of foreign exchange transactions settled on a payment-versus-payment basis in CLS's settlement system. RITS also facilitates the financial settlement of property transactions originating from a system operated by PEXA such that the lodgement of the title transfer only occurs once settlement has been assured by the reservation of funds in ESAs.
The RITS Regulations define what constitutes an insolvency event, as well as the rights and responsibilities of RITS members and the Bank in an insolvency scenario, and the actions the Bank may take to manage the situation. The Bank may suspend an insolvent member, at which point the Bank will remove any queued payments to and from the member and prevent the input of any new payments involving the suspended member. By permitting swift and decisive action in this way, the RITS Regulations allow the Bank to minimise the potential for a member default to disrupt settlement in the system more widely.
RITS's default management arrangements are discussed in further detail under the following Key Considerations.
The RITS Regulations and Membership Agreement include rules and procedures to govern the management of a member default. A member that becomes aware of an insolvency event – either its own insolvency, or the insolvency of another member for which it acts as a settlement agent – must notify the Bank immediately. The Bank may then suspend the relevant member, at which point the Bank will remove any queued payments to and from the member, and prevent the input of any new payments involving the suspended member. The Bank may also suspend a member that is unable to meet its settlement obligations. By permitting swift and decisive action in this way, the RITS Regulations allow the Bank to minimise the potential for a member default to disrupt settlement in the system more widely.
The Bank has internal default management procedures that document the steps it would take in response to an insolvency event. These procedures outline the roles and responsibilities of management for each decision that must be taken after such an event, which persons should be consulted when taking each decision, and which persons should be advised of a decision. The procedures also set out which other Australian industry bodies and other FMIs should be contacted if a member is suspended from RITS, and the methods available for communication with these parties. The procedures are tested and updated on a periodic basis.
The Bank manages the general business risk arising from RITS within the context of its organisation-wide risk management framework (see Principle 3). This process covers the full spectrum of financial, market, credit, operational and other risks. This is supported by the Bank's budgeting and accounting processes, which allow it to monitor, manage and control its operating expenses. New projects are subject to strong governance arrangements, both prior to initiation and through the implementation process. As a central bank-owned FMI, RITS does not hold ring-fenced liquid net assets to cover general business risk. Nevertheless, should a general business risk crystallise, the Bank has access to sufficient liquid funds to meet its current and projected operating expenses.
The Bank's arrangements for managing general business risk are discussed in further detail under the following Key Considerations.
The Bank's financial target with respect to RITS is to recover its operating costs. It regularly reviews its pricing and, in July 2012, implemented the first phase of a revised pricing structure and subsequent phases came into effect in 2014, 2015 and 2016.[56] Under the revised pricing structure a greater proportion of RITS operating costs are recovered from fees based on the value of settled transactions versus the volume of settled transactions. This change recognises that the benefit derived from RTGS settlement is primarily a function of the value, rather than the volume, settled.
The Bank has previously absorbed capital and development costs as a policy-related expense associated with major improvements to RITS's functionality and resilience. However, any new significant projects must be approved by the Executive Committee and relevant financial analysis must be included as part of the Bank's budget process.
Eligible securities purchased by the Bank as collateral under repo (both for payment system purposes and open market operations) must be denominated in Australian dollars and lodged in Austraclear, which is a licensed clearing and settlement (CS) facility overseen by ASIC and the Bank and subject to the Financial Stability Standards for Securities Settlement Facilities (SSF Standards). Counterparties in the Bank's operations must be RITS members, which includes signing a GMRA legal contract governing the terms and conditions of repos with the Bank, and must also be approved by the Bank. Close-out netting provisions included in these repo contracts provide for the immediate liquidation of collateral by the Bank in the event of default by the repo counterparty. This right is supported by Part 4 of the PSNA. In addition, the Austraclear system is subject to high operational resilience standards and operates in the same time zone as RITS, with highly overlapping operating hours. The Bank would therefore expect to have prompt access to the securities it holds as collateral.
The Bank does not hold collateral securities purchased under repo from eligible RITS members at custodian banks, or with entities in other time zones or foreign legal jurisdictions. The Bank does not re-use collateral purchased under repo and therefore does not face investment risks associated with returning re-used securities on the unwind date of repos.
Custody and investment risks in RITS are described in further detail under the following Key Considerations.
Australian dollar-denominated securities purchased by the Bank under repo must be lodged in Austraclear (see Principle 5). Austraclear is a licensed CS facility and is therefore overseen by ASIC and the Bank. In accordance with the licensing regime, Austraclear must meet the Bank's SSF Standards, which are aligned with the Principles. The SSF Standards require that Austraclear maintain robust accounting practices, safekeeping procedures and internal controls that fully protect the assets for which it acts as a central securities depository.
The close-out netting provisions included in the Bank's repo agreements with counterparties provide for the Bank to close out or terminate the second leg of a repo immediately. This right is protected by Part 4 of the PSNA (see Principle 1).
The Austraclear system is subject to high operational resilience standards and operates in the same time zone as RITS, with highly overlapping operating hours. The Bank would therefore expect to have prompt access to the securities it holds as collateral. In particular, the Bank has a service agreement with ASX – the owner of Austraclear – that imposes strict operational requirements on the Austraclear system, including a requirement to provide a minimum 99.9 per cent availability during business hours. The Austraclear system must also adhere to similar high standards of security and operational reliability set out in the SSF Standards.
Since February 2014, RITS members have had the option to use ASX Collateral services to deliver a subset of eligible securities under certain types of repo (see Principle 5). Securities provided to the Bank under repo through ASX Collateral are held in special-purpose ‘collateral accounts’ in Austraclear. Securities in these accounts can only be transferred based on instructions from ASX Collateral. For this reason, the Bank relies on the availability of ASX Collateral to be able to promptly access the securities held in the Bank's collateral accounts and, in the case of a default of the repo counterparty, liquidate those securities in a timely manner. The operational resilience of ASX Collateral is addressed in Key Consideration 17.7.
The Bank publishes criteria for securities eligible for domestic operations on its website. Eligibility criteria take into account the credit worthiness of the issuers and the Bank applies conservative margin ratios on all collateral securities purchased under repo. The legal contract governing the repo transactions give the Bank full title to the purchased securities and the close out netting provisions enable the Bank to terminate the repo contract, value and liquidate the securities upon notice of default.
RITS is designed to achieve a very high standard of operational reliability, with comprehensive policies and controls in place to: ensure reliability of IT infrastructure, monitor performance in real time and address potential problems promptly; maintain sufficient capacity; maintain the security and integrity of the system; and manage change effectively. The Bank manages the operational risks arising from RITS within the Bank's organisation-wide risk management framework (see Key Consideration 2.6).
The Bank sets clear operational reliability and capacity objectives and implements policies, procedures and controls to achieve those targets. The key operational targets for RITS are 99.95 per cent availability and minimum capacity to accommodate projected volumes 18 months in advance with 20 per cent headroom. The Bank has sufficient resources, including well-trained and competent personnel, to operate RITS. There is also an effective change management framework to ensure that system changes do not adversely affect the operation of RITS.
RITS's business continuity arrangements include detailed contingency plans, which are updated at least annually and are tested regularly, with recovery time targets of up to 40 minutes, depending on the nature of the operational disruption. The primary control to reduce the impact of a disruption is a high degree of redundancy in RITS's architecture. RITS data are synchronously mirrored at a geographically remote second site, which is permanently staffed. Full redundancy exists at both sites, ensuring that there is no single point of failure at either site. Live operations are rotated between the two sites on a regular basis. Staff rotation and cross-training ensure that critical functions are not dependent on particular individuals. The Bank also has succession planning processes in place for key positions.
The Bank also has a framework to maintain the security and integrity of RITS in place. Access to RITS is tightly controlled using a range of physical and cyber-security controls. Consistent with recommendations in the November 2015 Assessment, the Bank completed projects to review RITS's cyber security and cyber resilience. These included a review of cyber risks and a stocktake of existing security controls, a comprehensive program of penetration testing and in a separate project, a review of options to improve the ability to detect and recover from a disruption of service in RITS, or loss of software or data integrity, resulting from a wide range of operational disruptions, including a cyber-related incident. The reviews concluded that RITS has strong cyber defences. A number of recommendations were made to further strengthen RITS's cyber resilience. These recommendations were consolidated with recommendations from additional reviews of security controls for SWIFT-related systems. All high priority recommendations, representing findings that identified issues requiring prompt clarification or where material risk had been identified, have been implemented. Work is underway to complete lower priority recommendations and Payments Policy Department will review progress through its ongoing oversight of RITS.
CPMI and IOSCO published guidance on cyber resilience for FMIs in June 2016 (see Box A). Consistent with a recommendation made in the November 2015 Assessment, the Bank reviewed its cyber-risk management arrangements in light of the Cyber Resilience Guidance during the assessment period. This took the form of a self-assessment by Payments Settlements Department, which drew, in part, from the external reviews of RITS against key industry frameworks. The Bank's Payments Policy Department also conducted its own assessment of the RITS governance arrangements for cyber risk. There were no significant issues identified through these reviews.
The Cyber Resilience Guidance included an expectation that FMIs should, by June 2017, develop a concrete plan for improving their capabilities for recovering critical operations in order to progress towards the 2hRTO. Payments Policy Department developed a set of expectations regarding the plans that FMIs should have in in order to meet this requirement. On the basis of the significant work undertaken to review and enhance the cyber resilience of RITS over the past few years, the Bank's Payments Policy Department has concluded that the Bank meets the requirement of developing concrete plans for improving the ability of RITS to achieve the 2hRTO. In particular, the Bank has concrete plans to implement enhanced monitoring capacities to identify cyber attacks and enhanced systems and processes to enable recovery of accurate data following a breach, both of which will improve RITS's capability to meet the 2hRTO.
Beyond June 2017, FMIs are expected to execute their plans in a timely manner. FMIs are also expected to evaluate current and emerging technology on an ongoing basis that could lead to further enhancements to its abilities to recover from cyber attacks in a timely manner. Payments Policy Department are satisfied that the Bank has processes in place to ensure this occurs and will continue to engage with Payments Settlements Department on this to monitor the Bank's progress in evaluating options to further enhance its ability to recover from cyber attacks through its ongoing oversight of RITS.
The Bank monitors the operational performance of RITS members. In addition, in 2013, the Bank introduced Business Continuity Standards for RITS members. The Bank received members' latest annual self-certification statements against the standards. At the end of 2016, 59 of 60 RITS members were fully compliant with the standards. The Bank will continue to work with the remaining member as it progresses towards full compliance.
The Bank has controls to limit the risk from critical service providers, utilities and other FMIs. The Bank has a service level agreement with Austraclear and has a premium support package from SWIFT; both entities are of critical importance to the operation of RITS. These arrangements set out the response times and the minimum level of support expected from each entity. The Bank also has a service level agreement with a key technology vendor in place that provides enhanced monitoring and technical support. RITS's use of critical service providers and utilities is subject to ongoing monitoring and testing.
Details of RITS's operational risk management arrangements are described under the following Key Considerations.
The Bank has established a robust operational risk management framework, with systems, policies and procedures to identify, monitor and manage operational risk. Under the risk management framework, Payments Settlements Department is required to identify the range of risks that might impact its ability to operate RITS in a safe and efficient manner. To identify operational risks, the Bank applies both a historical approach, drawing lessons from issues that have occurred in the past, and a theoretical approach whereby experienced staff members seek to identify possible additional sources of risk. For each operational risk identified, Payments Settlements Department assesses the probability of the operational risk crystallising and its potential impact. Controls and mitigation strategies are also considered. Operational controls are documented in procedures manuals, administration guides and daily checklists. These controls and contingency plans are reviewed and signed off by management annually, or when system changes or upgrades are planned.
The Bank has a change management policy, supported by detailed processes and procedures, to safeguard the integrity and reliability of RITS. The policy is aligned to standards that are considered best practice in the information and technology and finance industries, including:
Under the policy, any material change typically would require the responsible business area to prepare a change implementation plan, which would identify possible risks arising from the change and controls in place to mitigate those risks. These controls would include plans to ‘back out’ any change that had been implemented, should this be necessary. Changes assessed as posing a high or medium risk are presented for approval to the Change Advisory Board, which comprises senior management from operational and information technology areas in the Bank.
To ensure that changes do not disrupt the operation of RITS, major or high-risk changes are implemented outside operating hours. This allows time for testing before RITS opens. Backups of data and system configurations are made prior to the implementation of any major changes. Any system changes are subject to extensive testing in separate test environments before approval for live implementation. This includes connectivity, functional, capacity and failover testing. RITS members are given the opportunity to become familiar with new functionality in a test environment prior to live implementation.
The Bank has an enterprise-wide project management framework. This framework includes guidance to ensure internal consistency in the way project risks are managed, as well as the arrangements for governing a project. The framework is aligned to widely used industry best practice, including the PRINCE2 framework. The framework is supported by the Enterprise Project Management Office (EPMO). The EPMO provide analysis, including on risk, and status reports to the Bank's executives on the major initiatives. It also provides advice and support to Bank staff working on projects.
The resourcing of the areas in Payments Settlements Department involved in the operation of RITS is the responsibility of the senior management in those areas. Recruitment and promotions at the Bank are merit based and subject to a formal selection process. New staff are required to undergo training in a range of areas, including anti-money laundering, information security, workplace health and safety, acceptable use of technology, fraud awareness and the Bank's Code of Conduct. Staff rotations and cross-training in critical areas ensure that critical functions are not dependent on particular individuals. The Bank also has succession planning processes in place for key staff.
Payments Settlements Department relies on the Bank's Information Technology Department to provide technical support for RITS. To ensure that there is a common understanding, the level of service expected from Information Technology Department with regard to the support of RITS is set out in internal documents. The resourcing policies set out above also apply to Information Technology Department.
The Bank has an ongoing program to evaluate fraud risks and review its fraud control framework. This is documented in the Fraud Control Policy. The primary preventative fraud controls include audit logs, dual input checks, separation of duties, management sign-off and processing checklists. These controls are supported by reconciliations and review by management. Regular staff training in fraud awareness is also conducted and monitored to ensure that all staff are actively engaged in fraud prevention. The Bank operates a hotline for staff, through which suspicious behaviour can also be reported anonymously. Audit Department investigates the potential for fraud and fraud controls as part of its regular audits.
The Bank manages the operational risks arising from RITS within its risk management framework, the governance of which is set out under Key Consideration 2.6. Under this framework, operational risk policies are developed and approved by the senior management of Payments Settlements Department, with oversight from the Risk Management Committee. In some circumstances, policies would need to be approved by the Assistant Governor, Business Services Group. RITS's operational policies, procedures and controls are subject to audit by the Audit Department, with assistance from external consultants. Audit reports are reviewed by the Audit Committee, with copies provided to the Risk Management Committee.
RITS availability targets are clearly defined and documented. RITS's target availability is 99.95 per cent for Bank-controlled components. Availability is measured relative to the total number of hours that the system is open for settlement and reporting. This target is set out in internal documents, and is assessed on a quarterly basis. Assessments are available to senior management in Payments Settlements Department and Payments Policy Department.
The Bank has established arrangements to ensure that RITS meets target availability, including a detailed business continuity policy (see Key Consideration 17.6) and change management framework (see Key Consideration 17.1). In addition, RITS applies a number of controls to prevent or manage disruptions, including operating procedure manuals, dual input checks and the use of checklists.
The Bank also monitors RITS's components to ensure that issues are detected in a timely manner. The monitoring aims to detect system problems within 15 minutes of their inception.
In some cases, automated tools are used, which verify the operation of system components at intraday intervals as short as one minute, and provide automatically generated email alerts to relevant Bank staff if any issues are detected. These include third-party tools which test connectivity by logging in from outside of the Bank's internal communications network and deliver data on the performance of RITS's components back to Bank staff in real time. System liquidity, and the value and volume of queued and settled payments relative to historical averages, are also monitored on a near real-time basis. The RITS system is monitored after business hours to monitor overnight processing and to facilitate the submission and settlement of retail payments.
The Bank has processes and controls in place to ensure that RITS has sufficient capacity. RITS capacity targets include a:
Targets are also set for the system's maximum response time to a member command.
RITS is tested regularly to ensure that it meets these targets. Processing throughput testing is performed quarterly and complemented by daily monitoring of actual processing throughput. Capacity testing is performed prior to each new RITS software release and at regular intervals. Test outcomes are reviewed by management in Payments Settlements Department. In the event of a problem, the Bank would investigate options to either improve processing throughput or increase capacity.
Testing is complemented by an alert system, which is designed to automatically advise operational staff if operational capacity for various RITS components is approached.
At the Bank, cyber resilience – in relation to both RITS and the Bank's operations more broadly – is overseen by the Risk Management Committee as part of the Bank's enterprise-wide risk management framework. As noted in the Bank's Risk Appetite Statement, the Bank has a very low appetite for threats to Bank assets arising from external malicious cyber attacks. To address this risk, the Bank aims for strong internal control processes and the development of robust technology solutions.
Information Technology Department is responsible for the review and implementation of the information security policies applicable to RITS. To support the Bank's information security, within the Information Technology Department there is a dedicated team headed by the Bank's Chief Information Security Officer. Information security policies are aligned to the Australian Government's Protective Security Policy Framework.[57] Cyber security practices are also informed and supported by domestic and international best practice, including strategies for mitigating cyber intrusions developed by the Australian Signals Directorate. The security policies are reviewed annually and in the event of changes to either the nature of the risk or the assets being protected. Security reviews by external consultants are also routinely commissioned for new RITS components and in response to significant changes to the RITS system.
While the Bank's current information security policies presently address all potential vulnerabilities and threats, the Bank recognises that both the nature of cyber-related issues and industry best practice are rapidly evolving. Accordingly, the Bank undertook a project to review and test the mechanisms in place to prevent a cyber-related incident. The first stage of this project involved a review of risks and a stocktake of existing security controls. The second stage of this project involved performing a comprehensive program of penetration testing. This project was completed in 2016. Based on the findings from the review and testing the Bank determined a set of additional measures to be put in place. Some of these measures have already been implemented and implementation of others is planned.
The Bank maintains detailed business continuity plans. These set out the operational response to events that could disrupt RITS's operations. These plans cover lines of authority, means of communications and failover procedures, and are updated annually or more frequently if required (e.g. when there is a major change to RITS).
A primary control to reduce the impact of a contingency is a high degree of redundancy in RITS's systems. RITS data are synchronously mirrored at two geographically remote sites, which are permanently staffed. Full redundancy of equipment exists at both these sites, ensuring there is no single point of failure at either site. RITS can be operated from either site indefinitely. Live operations alternate between both sites on a regular basis. Critical staff are also able to work from home through remote logon using a Virtual Private Network. The recovery time target is up to 40 minutes, depending on the nature of the operational disruption.
A high degree of redundancy is complemented by internal plans to deal with a wide variety of potential disruptions. These potential disruptions include the failure of individual RITS components and wide-scale external disruptions, such as floods and pandemics. Target recovery times are documented for each scenario. Contingency procedures are reviewed at regular intervals, and after major system changes and testing (if required).
Contingency plans include arrangements for the provision of timely information to stakeholders, including RITS members and operators of interdependent systems. The plans include predefined notification lists of both internal and external parties, and assign responsibility for regular updates. A web-based crisis communication facility for RITS enables the Bank to disseminate information via email and SMS to a large number of stakeholders within minutes. This facility can also be operated from remote locations and does not rely on the availability of either operational site. Conference call facilities are also available to enable timely discussion between key stakeholders. To ensure that staff are familiar with the crisis communications facility, it is used regularly.
Plans for all key contingencies are tested at least annually to ensure that the contingency procedures are robust and remain effective. To ensure that staff are fully aware of the contingency plans, procedures are also tested in regular ‘at desk’ contingency drills. In addition, Payments Settlements Department staff that are based at the Bank's head office are required to work at the Bank's geographically remote second site during a designated week each year to ensure that they are familiar with the facility. In addition, staff who are responsible for the day-to-day operation of RITS are also required to work at both sites at least one day each quarter.
Even if there is an extreme event in which RITS was unavailable and recovery was not possible, transactions from the SWIFT PDS and Austraclear feeder systems, which account for the majority of value and volume of payments settled in RITS, can be settled using ‘contingency settlement arrangements’. These arrangements involve the deferred net settlement of interbank obligations arising from the two feeder systems in a multilateral batch in RITS on the following day.
The Bank is conducting an evaluation of the existing contingency arrangements to determine whether any refinements are needed to ensure that payment clearing and settlement could continue in the event that RITS or its external feeder systems were unavailable.
Recognising that the efficient operation of RITS is also dependent on the operational reliability and resilience of its members, any technical problem affecting a member's transaction activity must be notified to the Bank immediately. The Bank also monitors members' payment flows in real time. If a potential problem is detected, the Bank will contact that member for further information. After a disruption, a member is required to provide the Bank with a detailed report on the causes and remedial actions of the disruption. In addition, in May 2013, the Bank published its Business Continuity Standards for RITS members, with a target for compliance to be achieved by September 2015. These standards aim to promote high availability in RITS payments processing operations, requiring both resilience of system components and rapid recovery if failover to alternative systems is required.[58]
The Bank continues to monitor RITS members' compliance with the standards. The Bank has received members' latest annual self-certification statements against the new standards as at the end of 2016, at which time 59 of 60 RITS members were fully compliant with the standards. The remaining member is working towards full compliance and expects to achieve this in the next twelve months. The Bank will continue to monitor compliance when members provide their next self-certification statements in early 2018.
SWIFT has been identified as a critical service provider to RITS, as the failure of SWIFT would severely impair the ability of members to effect third-party payments, as well as the management of Austraclear settlements via the RITS Automated Information Facility (which uses SWIFT messages). The Bank has a premium support package from SWIFT. The terms of this package set out the response times and level of support expected from SWIFT should an issue arise. The Bank also liaises regularly with SWIFT and participates in a coordinated global outage test, which simulates an operational disruption at SWIFT. The resilience and reliability of SWIFT is supported by regulation and oversight by the SWIFT Oversight Group, comprising the G10 central banks and chaired by the National Bank of Belgium.[59] To support its oversight activities, the Oversight Group has set proprietary minimum standards – the High Level Expectations – against which SWIFT is assessed.
each operational site has an uninterruptable power supply and a backup power generator system
all external communications links to the two operational sites are via dual geographically separated links, and where possible with different telecommunications providers
the Bank performs regular testing of backup arrangements.
Austraclear has been identified as an FMI that is of critical importance to the operation of RITS. The service level agreement with ASX – the owner of Austraclear – imposes strict service operational requirements on the Austraclear system, including requiring the Austraclear system to provide a minimum 99.9 per cent availability during business hours. The agreement also requires the Austraclear system to conduct connectivity testing with RITS annually.
The Bank also monitors the interdependencies between Austraclear and ASX Collateral. While ASX Collateral is not itself subject to direct regulation as an FMI, the Bank's SSF Standards set requirements for critical interdependent systems.[60] Accordingly, in its assessment of Austraclear against the SSF Standards, the Bank has sought to establish that the standards for operational resilience at ASX Collateral (including the link with Clearstream) are consistent with those that apply to Austraclear.[61] The availability of ASX Collateral is also relevant to the Bank's ability to promptly access securities held through ASX Collateral (see Key Consideration 16.2).
Austraclear and CLS rely on RITS to settle Australian dollar-denominated payments, and their operations would be disrupted if RITS was not available. This risk is mitigated by ensuring the operational reliability and resilience of RITS. The Bank also conducts joint contingency testing with ASX (the operator of Austraclear) and CLS. In addition, ASX has contingency plans that contemplate Austraclear continuing to operate independently of RITS. These plans allow for the interbank settlement of funds to be effected using the contingency settlement arrangements mentioned above.
Since settlement in RITS occurs using central bank money, only an institution with an ESA at the Bank can be a settlement participant in RITS. Furthermore, since RITS is the only means of access to ESAs, all ESA holders must be members of RITS and meet all of its operating conditions. The eligibility criteria for ESA holders therefore effectively represent the eligibility criteria for settlement participants in RITS.
Policy around ESA eligibility is set by the Bank's Payments Policy Department, under the governance of the Payments System Board, and is available on the Bank's website. The policy has been designed to be fair and open, and promote competition in the provision of payment services by allowing access to all providers of third-party payment services, irrespective of their institutional status. ADIs are eligible by default, because these institutions are assumed to provide third-party payment services as part of their business. Similarly, Australian-licensed CCPs and SSFs with payment arrangements that require Australian dollar settlement are also eligible to hold an ESA. The ESA policy sets a number of risk-based participation requirements, including around operational capacity and access to liquidity, which are designed to reduce the likelihood that an individual member experiences an operational or financial problem that disrupts the system more broadly. These requirements are generally proportional to member's expected payments in RITS.
RITS access and participation requirements are described in further detail under the following Key Considerations.
The ESA eligibility policy has been designed to be fair and open and enhance competition in the provision of payment services by allowing providers of third-party payment services access, irrespective of their institutional status. ADIs are eligible by default, because these institutions are assumed to provide third-party payment services as part of their business. Similarly, Australian-licensed CCPs and SSFs (or a related body corporate acceptable to the Bank) with payment arrangements that require Australian dollar settlement are also eligible to hold an ESA.
An ESA applicant must also demonstrate that it meets certain risk-related participation requirements at the time of application, including that:
it has access to sufficient ESA liquidity to meet its anticipated routine and ‘peak’ period settlement obligations
access to adequate intraday ESA liquidity to allow it to conduct its customers' business in a way that does not unreasonably impinge on other members or reduce the efficiency of the system
any collateral or guarantees it relies upon, especially in times of unpredictable stress, are adequate to meet its obligations.
RITS participation requirements are designed to reduce the likelihood that an individual member experiences an operational or financial problem that disrupts the system more broadly, for instance by defaulting, becoming a liquidity sink or excessively delaying payments. The requirements are generally proportional to members' expected payments in RITS. For example, the Business Continuity Standards are proportional to the nature and size of a prospective member's payments business.
To reduce the operational burden on smaller RITS members, any ESA holder that is not a CCP, with aggregate outgoing RTGS transactions of less than 0.25 per cent of the total value of RTGS transactions, may use an agent to settle its RTGS transactions, rather than settling directly across its own ESA (see Principle 19).
Indirect participation in RITS is not available more broadly because of the concern that it might lead to a high degree of concentration of payments through a few direct participants, and give rise to an unacceptable concentration of liquidity and operational risks in these members (see Principle 19). Indirect participation also introduces credit risk for members because settlement between an indirect participant and its settlement agent occurs in commercial bank money. Although some small institutions are therefore required to participate in RITS directly, the cost of technical access to the RITS User Interface is low for these members, since they may use an internet connection.
The RITS Regulations clearly set out the conditions under which the Bank can suspend a member. Accompanying procedures are designed to facilitate an orderly exit. The Bank may at any time terminate or vary the terms of the membership of any institution, or impose particular conditions on an institution's membership of RITS. In addition to these rights, the Bank may suspend, for such a period as it considers appropriate, any member who: fails to comply with any provision of the RITS Regulations; is guilty of any conduct regarded by the Bank to be contrary to the interests of the participants of the system; or has become insolvent. To facilitate an orderly exit, unsettled payments to or from a suspended participant would be removed from the RITS queue, and the input of any new payments involving the suspended member would be prevented (see Principle 13).
The Bank's ESA policy limits the scope for material risks to arise from tiered participation arrangements. Under the policy, ADIs that settle over 0.25 per cent of the total value of RTGS transactions and systemically important CCPs are required to settle their Australian dollar obligations in RITS using their own ESAs. Only those ESA holders with a share of transactions of less than 0.25 per cent of the total value of RTGS transactions are permitted to use an agent to settle their transactions. The Bank monitors ESA holders' compliance with this policy on an ongoing basis.
Tiered participation arrangements in RITS are described in further detail under the following Key Considerations.
The Bank's ESA policy limits the scope for material risks to arise from tiered participation arrangements (see Principle 18). In particular, the Bank's ESA policy limits indirect participation by ADIs, which are the primary providers of payment services in Australia, to those with aggregate outgoing RTGS transactions of less than 0.25 per cent of the total value of RTGS transactions. Further, to reduce dependence on its agent, a bank that participates indirectly is required to maintain an ESA for contingency purposes.
To ensure RITS has sufficient information about indirect participation, ESA holders that participate indirectly are required to report the value and volume of their outgoing RTGS payments to the Bank on a quarterly basis, and also notify the Bank if they change the agent bank through which they settle. These reporting requirements are set out in attachment A of the Membership Agreement ‘Additional Conditions of Membership’. This information is used to monitor compliance with the 0.25 per cent threshold. If the value of an ESA holder's outgoing payments consistently exceeded the 0.25 per cent threshold, the Bank would consider revoking approval for the agency arrangement. If revoked, the ESA holder would be required to settle payments using its own ESA.
As noted under Principle 18, the ESA policy also minimises the scope for risks arising from indirect participation by CCPs and SSFs:
The Bank requires any Australian-licensed CCP that the Bank has determined to be systemically important in Australia to settle Australian dollar margin-related receipts or payments, and the CCP's Australian dollar securities- or derivatives-related obligations, across an ESA held in its own name, or that of a related body corporate acceptable to the Bank.
Australian-licensed SSFs with payment arrangements that require Australian dollar settlement are eligible to hold ESAs. The Bank's SSF Standards also require that an SSF conduct its money settlements in central bank money, where practical and available, to avoid credit and liquidity risks. Together, these requirements mean that Australian-licensed SSFs with payment arrangements that require Australian dollar settlement settle such obligations in RITS.
The Bank considers it unlikely that there are material dependencies between RITS members that are indirect participants that are not required to hold ESAs – that is, non-banks – and RITS members that are direct RITS participants that could affect RITS. For this reason it only collects information on indirect payment flows from ESA holders that use an agent.
Given that the value of an indirect participant's RTGS payments must be less than 0.25 per cent of total RTGS payments, it is unlikely that such a participant would be large relative to the direct participant it uses as an agent. The design of RITS also encourages direct participation by reducing the liquidity required for direct participation through liquidity-saving features, which are described in section A.4.
The Bank monitors compliance with its ESA policy, which mitigates the potential for risks to arise from tiered participation arrangements, on an ongoing basis. Notwithstanding this, the Bank also reviews the risks that arise from tiering in RITS on an ad hoc basis.
The Bank ensures that RITS meets the needs of its members by consulting with RITS members on a regular basis. In addition to holding RITS User Group forums in Melbourne and Sydney every six months, the Bank liaises closely with industry through the Australian Payments Network and Australian Financial Markets Association (AFMA) and consults directly with RITS members on proposed changes to RITS. Such consultation is key to setting and communicating RITS's business priorities. To ensure efficiency and effectiveness in RITS's operations, the Bank sets goals relating to minimum service levels and risk management, and monitors its performance against these goals (see Principle 17 for further details on minimum service levels).
The efficiency and effectiveness of RITS are described in further detail under the following Key Considerations.
To ensure that the needs of its members and the markets its serves are met, the Bank consults widely on any proposed changes to RITS. The Bank also holds RITS User Group forums in Melbourne and Sydney every six months. These forums provide an opportunity both for participants to suggest improvements and for the Bank to consult on planned upgrades. The Bank also liaises closely with the industry through the Australian Payments Network and AFMA, and directly with RITS members on proposed changes to RITS.
The Bank's objectives in developing and operating RITS are clearly defined (see Key Consideration 2.1). The Bank sets goals relating to minimum service levels and risk management (see Key Consideration 17.3). A key business priority for RITS is to meet the changing needs of members in the payments system. RITS communicates its business priorities through public consultation, the RITS User Group forum, other direct consultations with RITS members, and liaison with industry through the Australian Payments Network and AFMA.
The Bank has processes in place to ensure that RITS is operated in an efficient manner. These include regular audits of the functional areas involved in the operation of RITS, which are presented to the Audit Committee, and performance evaluations of Payments Settlements Department management against their position descriptions. A key metric for the review of the effectiveness of Payments Settlements Department is its operational performance. This is reviewed on a quarterly basis. Feedback from periodic liaison with stakeholders at RITS User Group forums and industry liaison through the Australian Payments Network and AFMA are also key inputs into reviews of the effectiveness of RITS.
RTGS payment instructions can be submitted to RITS via two linked external feeder systems – SWIFT PDS and Austraclear – or entered into RITS directly. Payment messages sent to RITS via the SWIFT PDS feeder system – which account for the majority of volumes and value settled in RITS – are sent using the internationally accepted SWIFT message standards and network. Automated Information Facility messages (including ESA statements) also use the SWIFT message standards and network. The procedures and standards for members to send payment messages to Austraclear are determined by ASX, the owner of Austraclear. Some payments are manually entered directly into RITS using the RITS User Interface, which is accessible via the internet.
RITS's communication procedures and standards are described in further detail under the following Key Consideration.
Messages sent to RITS via the SWIFT PDS use SWIFT message standards and are transmitted over the SWIFT network. The majority of RTGS payments by value and volume submitted to RITS are entered via the SWIFT PDS feeder system. The Automated Information Facility, which members can use to access information on their payments, receipts and liquidity in real time, receive end-of-day ESA statements and submit commands to manage queued payments, also uses SWIFT message standards and is accessed via the SWIFT network.
The procedures and standards used to submit payments messages to Austraclear are determined by ASX.[62] Notwithstanding this, members can use the RITS User Interface or the Automated Information Facility to control the status of payments sent via the Austraclear feeder system.
Payments can be manually entered directly into RITS using the RITS User Interface, which can also be used to perform enquiries, download reports and manage transactions. The RITS User Interface is a browser-based interface that can be accessed over the internet.
The RITS Regulations and associated contractual arrangements, which are available on the Bank's website, are supplemented by information papers and user guides that explain RITS requirements and functions. In addition, publication of this Assessment satisfies the requirement to provide information on operations in accordance with the Disclosure Framework developed by CPMI and IOSCO. The RITS fee schedule is also publicly available on the Bank's website. The Bank publishes on its website monthly data on the number and value of RITS payments, as well as a list of RITS members. Finally, to further enhance member understanding of RITS's operations, the Bank provides training to RITS members, and also monitors members' activity and operations to confirm that RITS rules, procedures and features are well understood and to identify any potential issues.
The disclosure of rules, key procedures and market data relating to RITS is described in further detail under the following Key Considerations.
The RITS Regulations are comprehensive, and are available to the public on the Bank's website. As discussed under Key Consideration 1.2, the Bank has undertaken a major restructure and rewrite of the RITS Regulations. The main objective of the new version is to improve the clarity of the Regulations. The new Regulations were implemented in March 2017. The RITS Regulations are supplemented by information papers and user guides that explain RITS requirements and functions.
The Bank provides members with information papers and user guides that contain detailed descriptions of RITS's features and instruction on how to use them.
The Bank provides member training and monitors members' operations to ensure that the RITS rules, procedures and features are well understood. Training is provided to all new members, and is offered to all members when new functionality is introduced. Refresher training is available upon request. Training consists of presentations by the Bank on the key features of RITS, as well as the opportunity to be guided through transaction input and management in a test environment. Members also have access to a RITS test environment on an ongoing basis to help them gain familiarity with RITS. The Bank has established the RITS Help Desk to provide ongoing operational assistance to RITS members. The Help Desk is open during RITS business hours.
The RITS fees schedule is publicly available on the Bank's website.[63] This schedule provides fees at the level of individual services and provides clear descriptions of priced services. There are no discounts on RITS fees.
The assessment of RITS against the Principles is published on the Bank's website.[64] This report addresses all of the matters identified in the Disclosure Framework. The Bank also publishes on its website monthly data on the number and value of RITS payments, as well as a list of RITS participants.[65] RITS payments data are also published by the Bank for International Settlements in the Statistics on Payment, Clearing and Settlement Systems in the CPMI Countries on an annual basis.[66]
See CPMI-IOSCO (2015), Application of the Principles for financial market infrastructures to central bank FMIs, August. Available at <http://www.bis.org/cpmi/publ/d130.pdf>. [27]
The CHESS RTGS feeder system provides for the delivery-versus-payment model 1 settlement of equities transactions executed on ASX. This system is currently not used. [28]
A small number of obligations sent through LVSS are settled on a gross basis. [29]
See https://www.rba.gov.au/payments-and-infrastructure/rits/legal-framework.html. [30]
See RBA (2016), Information Paper: RITS Regulations and Conditions of Operation, March. Available at https://www.rba.gov.au/payments-and-infrastructure/rits/user-doc/pdf/regulations.pdf. [31]
For further details on the scope of the legal opinion, see https://www.rba.gov.au/rits/info/pdf/Signing_Instructions.pdf. [32]
Information on the role of the Bank in maintaining financial stability is available at https://www.rba.gov.au/fin-stability/reg-framework/role-of-the-reserve-bank-in-maintaining-financial-stability.html. [33]
Information on the Bank's objectives in relation to its operation of RITS is available at https://www.rba.gov.au/payments-and-infrastructure/rits/about.html. [34]
Information on the Payments System Board is available at https://www.rba.gov.au/about-rba/boards/psb-board.html. [35]
A summary of the governance arrangements of the Bank is available at https://www.rba.gov.au/about-rba/governance.html. [36]
The 2016 Reserve Bank of Australia Annual Report is available at https://www.rba.gov.au/publications/annual-reports/rba/index.html. [37]
These are set out in the document Managing Potential Conflicts of Interest arising from the Bank's Commercial Activities, available at https://www.rba.gov.au/payments-and-infrastructure/payments-system-regulation/conflict-of-interest.html. [38]
This policy is available at https://www.rba.gov.au/about-rba/our-policies/risk-management-policy.html. [39]
This policy is available at https://www.rba.gov.au/about-rba/our-policies/risk-appetite-statement.html. [40]
Outright sales to the Bank are limited to Australian government securities. [41]
The policy is available at https://www.rba.gov.au/mkt-operations/resources/tech-notes/eligible-securities.html. [42]
This requirement does not apply to Commonwealth government securities, semi government securities, securities with an Australian government guarantee or securities issued and/or guaranteed by the New Zealand government. [43]
The current list of eligible securities is available at https://www.rba.gov.au/mkt-operations/xls/eligible-securities.xls. [44]
More information on this initiative is available at https://www.rba.gov.au/securitisations/. [45]
The Bank uses the terminology ‘margins’ instead of ‘haircuts’ in its publicly available documents. [46]
A list of the haircuts used by the Bank is available at https://www.rba.gov.au/mkt-operations/resources/tech-notes/margin-ratios.html. [47]
Intraday repos do not require mark-to-market margin collection, as they are reversed by the end of the business day. [48]
The repurchase amount for a repo is the value of the repo purchase price adjusted for accrued interest. [49]
Intraday repos involving Commonwealth Government Securities or semi-government securities are recorded outside of this system unless they are extended to become overnight repos. [50]
‘Coupon passes’ refer to the Bank passing the coupon payments on securities that it has purchased under a repo agreement back to the seller of the securities. [51]
For more information on the types of repos and securities eligible to be settled via ASX Collateral see https://www.rba.gov.au/mkt-operations/resources/tech-notes/settlement-procedures.html. [52]
For more information see RBA (2013), ‘Box B: ASX Collateral’, Self-assessment of the Reserve Bank Information and Transfer System, p12, available at https://www.rba.gov.au/payments-and-infrastructure/rits/self-assessments/2013/. [53]
Payments settled using the ‘auto offset’ functionality are settled in full across relevant ESAs simultaneously. These payments are posted in full to the ESAs and are not subject to bilateral netting. [54]
For more information, see Standard 10 in Appendix A2.1 and A2.2 of the 2015/16 Assessment of ASX Clearing and Settlement Facilities, available at https://www.rba.gov.au/payments-and-infrastructure/financial-market-infrastructure/clearing-and-settlement-facilities/assessments/2015-2016/. [55]
For further details see ‘Box C: RITS Pricing’ in RBA (2013), Self-assessment of the Reserve Bank Information and Transfer System, p 23 https://www.rba.gov.au/payments-and-infrastructure/rits/self-assessments/2013/. [56]
This framework is available at <https://www.protectivesecurity.gov.au/Pages/default.aspx>. [57]
For more information on the member Business Continuity Standards, see RBA (2013), ‘Box E: Participant Business Continuity Standards’, 2013 Self-assessment of the Reserve Bank Information and Transfer System, p 27. [58]
In 2012, the Oversight Group set up the SWIFT Oversight Forum to include 12 additional central banks, including the Bank, in the oversight process. Through its membership of the Oversight Forum, the Bank is able to access information relevant to SWIFT oversight. [59]
See Standard 14.9 of the SSF Standards, available at https://www.rba.gov.au/payments-and-infrastructure/financial-market-infrastructure/clearing-and-settlement-facilities/standards/securities-settlement-facilities/2012/standard-14.html. [60]
For more information on ASX Collateral and its implications for Austraclear, refer to the 2014/15 Assessment of ASX Clearing and Settlement Facilities, available at https://www.rba.gov.au/payments-and-infrastructure/financial-market-infrastructure/clearing-and-settlement-facilities/assessments/2014-2015/. [61]
ASX also controls the procedures and standards for payment messages through a third RTGS feeder system, CHESS-RTGS, which is currently not used. [62]
The RITS fee schedule is available at https://www.rba.gov.au/payments-and-infrastructure/rits/membership/schedule-fees.html. For further details see ‘Box C: RITS Pricing’ in RBA (2013), Self-assessment of the Reserve Bank Information and Transfer System, p 23, https://www.rba.gov.au/payments-and-infrastructure/rits/self-assessments/2013/. [63]
Current and previous Assessments of RITS are available at https://www.rba.gov.au/payments-and-infrastructure/rits/self-assessments/2015/index.html. [64]
Monthly RITS transaction data is available in C7 Real-time Gross Settlement Statistics of the RBA Statistical Tables at https://www.rba.gov.au/statistics/tables/. A list of RITS members is available at https://www.rba.gov.au/payments-and-infrastructure/rits/membership/membership-list.html. [65]
These data are available at <http://www.bis.org/list/cpmi/tid_57/index.htm">http://www.bis.org/list/cpmi/tid_57/index.htm>. [66]