Payment system oversight
The Reserve Bank oversees the New Zealand payment system for the purpose of promoting the maintenance of a sound and efficient financial system. The Reserve Bank’s payment system oversight role is explained in Statement of principles: payment system oversight, also available as a PDF file ( 34KB).
Features
In Payment system governance we build on our Statement of principles: payment system oversight, setting out and explaining our views on payment system governance.
New Zealand Payment System, a speech given by the Governor on 11 August 2005.
Payment and settlement
systems in New Zealand updated March 2008 (PDF 152KB).
This
paper provides an overview of the payment and settlement systems in New
Zealand and the Reserve Bank's payment system roles.
The Financial Stability Report contains general information on current issues and recent developments in the New Zealand payment system. Before 2005 these matters were reported on in the Reserve Bank Bulletin.
The designation and oversight of designated settlement systems
The original Part 5C of the Reserve Bank of New Zealand Act 1989 (the Act) provided for the designation of payment systems.
On 18 November 2009 the Minister of Commerce announced the passing of a bill that extended the scope of the systems that can be designated to systems that clear and settle products (notably securities) as well as payments. The Reserve Bank of New Zealand Amendment Act (2009) creates a new Part 5C of the Reserve Bank of New Zealand Act 1989. Part 5C of the Act provides for the designation of settlement systems and gives statutory backing for finality of settlement and netting through a designated settlement system. Part 5C also makes the Securities Commission a joint regulator of designated settlement systems with the Reserve Bank. The Reserve Bank and the Securities Commission have released a draft policy document (PDF 146KB) for public consultation. This document explains the roles and policies of the Reserve Bank and the Securities Commission in relation to the designation and oversight of designated settlement systems. Submissions on the draft policy have closed and the Reserve Bank and Securities Commission will issue a final document by early March.
The legislation states that the existing designations of the Exchange Settlement Account System (ESAS) and the CLS System are not affected by the amendments to Part 5C. These designations were declared under the Reserve Bank of New Zealand (Designation of Payment Systems) Order 2004. The amendments also state that ESAS and the CLS System are pure payment systems. A pure payment system is a designated settlement system that provides solely for the transfer of funds. The Reserve Bank remains the sole regulator of pure payment systems.
The contact persons for the designated settlement systems are:
|
ESAS: Chief Financial Officer Financial Services Group Reserve Bank of New Zealand PO Box 2498 WELLINGTON Telephone (04) 472-2029 Email: rtgshelpdesk@rbnz.govt.nz |
CLS System: General Counsel of CLS Bank International CLS Bank International UNITED STATES OF AMERICA Telephone: 001-212-943-2290 Email address: GeneralCounsel@cls-bank.com |
Read the ‘questions and answers’ sheet on designated settlement systems.
Other payments-related policy
The Reserve Bank is also responsible for the recognition of clearing houses to give effect to the multilateral netting provisions in the Companies Act. For information and guidance on applications to become a recognised clearing house under section 310K of the Companies Act, see Application for status as a recognised clearing house, October 2000 (PDF 19KB).
As provider of the Exchange Settlement Account System, the Reserve Bank also has a Policy on Access to Exchange Settlement Accounts (3 March 1999).
Relationships with related regulators
Domestically, the Reserve Bank is a member of the Financial Regulators’ Co-ordination Group, which is a forum amongst various government agencies for sharing information and views about regulatory issues, financial system developments, other matters of mutual interest, policy issues of common interest, areas of overlapping responsibility and members’ relationships with Australian authorities (see the Terms of Reference of the Financial Regulators’ Co-ordination Group and a related Memorandum of Understanding Concerning Co-operation and the Exchange of Information (PDF 145KB). However, the Financial Regulators’ Co-ordination Group does not currently consider payment system issues.
Internationally, the Reserve Bank is a member of the CLS Oversight Committee. Oversight of the CLS System is conducted co-operatively by the relevant central banks in accordance with the Protocol for the Co-operative Oversight Arrangement of CLS.
As part of its involvement in EMEAP (the Executives' Meeting of East Asia-Pacific Central Banks), the Reserve Bank also participates in the EMEAP Working Group on Payment and Settlement Systems (see the EMEAP website for more information on EMEAP).
The Committee on Payment and Settlement Systems (CPSS) serves as a forum for the central banks of mostly Group of Ten countries (G10) to monitor and analyse developments in domestic payment, settlement and clearing systems as well as in cross-border and multicurrency settlement schemes. The CPSS also has a comprehensive range of publications on matters relating to payment systems and payment system oversight. Its Secretariat is hosted by the Bank for International Settlements (BIS) – see the BIS website for more information on the CPSS and for access to its publications. Increasingly, non-G10 central banks are also participating in the work of the CPSS.
Links
For information on the Reserve Bank's payment and settlement systems see the Payment & Settlement System section of our website.
See also the Payment and settlement system frequently asked questions (FAQ) section of our website for links to relevant Bulletin articles and international resources.
