Page 93 - ITU-T Focus Group Digital Financial Services – Interoperability

ITU-T Focus Group Digital Financial Services
Interoperability

money laundering (AML) and combating the financing of terrorism (CFT) policies and procedures, availability
of sufficient and capable staff that handle the interconnection with the infrastructure, etc.

Financial requirements generally refer to a PSP having appropriate indicators of creditworthiness (e.g., fulfilling
a minimum capital requirement), and having sufficient financial resources for contributing to any pre-funded
default arrangements (which are common in deferred net settlement systems such as ACHs and payment
card switches).

Other requirements typically include being able to provide evidence on the good standing of the owners
and managers of the PSP, on the qualifications of managers and staff (e.g., on risk management issues), etc.
In addition, as earlier discussed, non-technical requirements may also include having a specific license type
(e.g., a banking license) in order to become a direct participant, and/or that the applicant has a settlement
account at the central bank.

B. International standards and other guidance

Access rules to payment infrastructures vary across countries and across the various infrastructures in each
country, and keep evolving based on experience, market developments and other needs. Standards and other
internationally recognized guidance for payments and other settlement systems provide general references or
instructions on the features that a system’s rules ought to include with regard to access aspects.

The CPMI-IOSCO "Principles for Financial Market Infrastructures" (PFMIs) issued in 2012 are the most widely-
recognized international standards for payment systems and other financial market infrastructures (FMIs).
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Although the PFMIs were designed for being applicable to systemically important payment systems (and other
FMIs), many central banks also apply the PFMIs, or a subset thereof, to the main retail payment systems in
their jurisdiction.

The PFMIs contain a specific principle on the issue of access to the infrastructure. Principle 18 on "Access and
participation requirements" states that:

An FMI should have objective, risk-based, and publicly disclosed criteria for participation, which permit fair
and open access.
According to this principle, a payments system (and other FMIs) should allow for fair and open access to its
services, based on reasonable risk-related participation requirements. In other words, a payments system
should allow for fair and open access to its services, but at the same time it must control the risks to which it
is exposed by its participants by setting the necessary risk-related requirements for participation in its services.
The latter should have the least-restrictive impact on access and competition that circumstances permit.

Moreover, the operator of a payments infrastructure must set robust risk management controls for day-to-day
operations. The effectiveness of these controls may also mitigate the need for the operator to impose onerous
participation requirements that limit access.

More recently, in their 2016 "Payment Aspects of Financial Inclusion" report the CPMI and the World Bank
Group further recognize the importance for financial inclusion of appropriate access to infrastructures and
their interoperability. For example, two of the key actions that relate to Guiding Principle 3 in that report
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state the following:
• Payment infrastructures, including those operated by central banks, have objective, risk-based participation
requirements that permit fair and open access to their services.

15 Other FMIs include central securities depositories, securities settlement systems, central counterparties and trade repositories.
16 Guiding principle 3 on Financial and ICT infrastructures: "Robust, safe, efficient and widely reachable financial and ICT infra-
structures are effective for the provision of transaction accounts services, and also support the provision of broader financial
services".

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