Document ID: chunk:federal_register_of_legislation:F2019N00027:body:0:p3
Version: federal_register_of_legislation:F2019N00027
Segment Type: other
Provision Reference: 
Character Range: 5457–8499

of the standards, without changing their purpose or substantive effect.
This consultation paper describes the issues where stakeholders have sought clarification and guidance or suggested changes to the standards, and sets out the Bank's proposed options to address them. Appendix A contains draft variations to the Standards. Submissions in response to this consultation paper and the draft variations should be made to the Bank by 28 March 2019.

2.              Issues for Consultation
This section describes several aspects of the net compensation requirement in Standards No. 1 of 2016 and No. 2 of 2016, outlining areas where clarification of their operation may be useful, including some where the Bank considers that minor variations to the standards may be in the public interest.[2]
The objective of this consultation is to improve the operation of the standards and give stakeholders greater clarity about the interpretation of the standards. This follows an informal consultation with key stakeholders in late 2018. Accordingly, the Bank's expectation is that this consultation could be concluded relatively promptly, ahead of the end of the current financial year and before the second set of certifications under the standards become due.[3] This limited-scope consultation does not seek to review or change the substantive detail of the Bank's card payments regulations; the Bank conducted a comprehensive review of the regulatory framework in 2015–16 and is likely to undertake another such review within the next couple of years.
In consulting on changes to the standards and providing guidance on their interpretation, the Bank aims to promote competition and efficiency in the Australian payments system:
    * Clarification of the standards and provision of guidance should improve the understanding that schemes and issuers have of the standards and their obligations under them. This should lower the regulatory and compliance burden for these firms.
    * Similarly, the burden of compliance with the net compensation requirement should be lower if calculations of issuer payments and receipts can be done more consistently with the accounting approach that underpins how participants prepare their financial accounts.
    * The proposed changes to the standards should also help to promote a 'level playing field' in the card payments industry. The net compensation provisions act as a constraint on schemes and issuers. Several stakeholders noted that there are aspects of the standards that allow some scope for interpretation. Stakeholders identified concerns that if a scheme or issuer (or both) took an interpretation sufficiently different from other parts of the industry, they might gain some competitive advantage. Minor amendments to clarify the standards and the provision of guidance should ensure greater consistency of interpretation between stakeholders.

2.1                 Accounting Basis
When the initial compliance certifications for the net compensation requirement were being prepared by schemes