ECB launches the SIPS Regulation

The regulation covers large-value and retail payment systems in the EUR area operated by both central banks and private entities, and aims at ensuring management of legal, credit, liquidity, operational, general business, custody, investment and other risks as well as sound governance arrangements, namely with a view towards promoting the smooth operation of safe and efficient payment systems in the EUR area.

The four systems identified include TARGET2, operated by the Eurosystem, EURO1 and STEP2-T, operated by EBA CLEARING and CORE(FR), operated by STET, a joint initiative of six French banks. They were identified according to the combination of at least two of four main criteria, including the value of payments settled, market share, cross-border relevance and provision of services to other infrastructures. The Eurosystem will review this list annually on the basis of updated statistical data.

The SIPS Regulation is stricter than previous oversight standards and provides for sanctions and corrective measures for system operators in case of non-adherence. Furthermore, it implements and is consistent with the “Principles for financial market infrastructures” (PFMIs), introduced in April 2012 by the Committee on Payment and Settlement Systems (CPSS) of the Bank for International Settlements and the International Organization of Securities Commissions (IOSCO).