Assessment of the Reserve Bank Information and Transfer System
The Bank today released the 2021 Assessment of the Reserve Bank Information and Transfer System (RITS) against the Principles for Financial Market Infrastructures (PFMI). The Assessment concludes that RITS ‘observed’ all relevant Principles as at 31 March 2021, except for the Principles on Participant-Default Rules and Procedures, and on Operational Risk, which were rated as ‘broadly observed’.
RITS is Australia’s high-value payments system, which is used by banks and other approved institutions to settle their payment obligations on a real-time gross settlement basis. The Assessment was independently prepared by the Bank’s Payments Policy Department and approved by the Payments System Board.
The Assessment discusses work underway to support the continued operational stability of RITS and to strengthen the oversight of external contractors conducting maintenance on critical infrastructure. It is recommended that the Bank completes the implementation of these initiatives. The Assessment also recommends improvements to the Bank’s documentation of decision-making and crisis-management arrangements in the event of a RITS member default.
Background
The Payments System Board has responsibility for the safety and stability of payment systems in Australia. The Payments System Board’s policy is that systemically important payment systems are expected to observe the PFMI issued by the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions.
RITS is owned and operated by the Bank. The Bank considers that RITS is a systemically important payment system and has committed to conduct annual assessments of RITS against the PFMI. These assessments are produced by the Bank’s Payments Policy Department, which is the functional area responsible for oversight of the Australian payments system.
For more information on the Bank’s approach to assessing systemically important payment systems, see: Policy Statement on the Supervision and Oversight of Systemically Important Payment Systems.