The Bank of Canada announced today that the Canadian Payment Association’s (CPA) “retail” payments system, the Automated Clearing Settlement System (ACSS), has been designated a Prominent Payment System and, as such, will be subject to more stringent risk-management criteria.
“This designation acknowledges the importance of the CPA’s systems and supports payments modernization,” said Carol Ann Northcott, Chief Risk Officer and Vice-President, Risk, Security and Research at CPA. “Many of the elements required for compliance with the standard will be addressed as part of the CPA’s Modernization initiative, which is already underway.”
In keeping with its responsibility to underpin the Canadian financial system and economy by providing safe, efficient and effective clearing and settlement of payments, the CPA has embarked on a multi-year initiative to modernize its systems. This early development is an important step in a process that, over time, will enable significant improvements to the overall payments system.
In June 2015, the Bank of Canada released a consultation paper on Proposed Criteria and Risk-Management Standards for Prominent Payment Systems. The consultation paper outlined proposed criteria for identifying Prominent Payments Systems and high-level risk-management standards that are based on the Committee on Payments and Market Infrastructures (CPMI) and International Organization of Securities Commissions (IOSCO) Principles for Financial Market Infrastructures (PFMI).
“This designation is an important step in the CPA’s vision to become a centre of excellence for payments and will further enhance our core purpose by providing safe, efficient and effective clearing and settlement of payments for the Canadian economy,” said Gerry Gaetz, President and CEO of the CPA.
The CPA is well positioned to meet the new PFMIs from the Bank of Canada based on its experience when the Large Value Transfer System (LVTS) became subject to new principles in 2012. Throughout the process, the CPA is committed to collaborating with members to satisfy the new standards.
The next steps for the CPA are to identify and address gaps in meeting the designation and to gain consensus with the Bank of Canada on an implementation plan.