To: All Member Banks and Others Concerned in the Third Federal Reserve District

Attention: Chief Executive Officer and Chief Compliance Officer



The Board of Governors of the Federal Reserve System has requested comment on proposed revisions to Part II of its Policy Statement on Payments System Risk (PSR Policy), which addresses risk management in payments and securities settlement systems.

The proposed revisions update the policy in light of current industry and supervisory risk management approaches and new international risk management standards for payments and securities settlement systems. In addition, they provide further clarification regarding the policy’s objectives, scope, and application.

The key revisions include an expansion of the policy’s scope to include those Federal Reserve Bank payments and securities settlement systems that meet the policy’s application criteria, revised general risk management expectations for systems subject to the policy, and the incorporation of both the Core Principles for Systemically Important Payment Systems (Core Principles) and the Recommendations for Securities Settlement Systems (Recommendations). The Core Principles were developed by the Committee on Payment and Settlement Systems (CPSS) of the central banks of the Group of Ten countries. The Recommendations were developed by the CPSS and the Technical Committee of the International Organization of Securities Commissions.

Comments are requested within 90 days of publication in the Federal Register.

The Federal Register notice, published April 26, 2004, is available here (303 KB, 17 pages).

Date: Comments are requested within 90 days of publication in the Federal Register.

For Further Information: Jeff Stehm, Assistant Director (202/452-2217), or Doug Conover, Senior Analyst (202/452-2887), Division of Reserve Bank Operations and Payment Systems; for the hearing impaired only: Telecommunications Device for the Deaf, 202/263-4869.