On September 29, 2016, the BoE published a consultation paper proposing the introduction of a draft Code of Practice and Supervisory Statement on governance in recognized payment system operators. The final Code and the Supervisory Statement will contain the minimum governance requirements and expectations for recognized payment system operators to meet. Recognized payment systems include Bacs, CREST, CHAPS, LINK and Faster Payment Services. The Principles for financial market infrastructures, developed by the Committee on Payment and Settlement Systems and the International Organization of Securities Commissions, form the basis of the draft Code although the Bank has also taken into account other sources such as the UK Corporate Governance Code. Amongst other things, the draft Code would require a recognized payment system operator to be a systemic risk manager (by promoting the safety and efficiency of the payment system and supporting the stability of the financial system), review its performance annually and document its governance policies and procedures. It would also set out the requirements for composition of the board and expectations on governance arrangements. It is not intended that the Code would apply to a recognized payment system that is operated by a recognized clearing house or central securities depository because those entities are already subject to similar requirements under EMIR or the Central Securities Depositories Regulation. The BoE is proposing that the Code be implemented 12 months after publication of the final version. The consultation closes on December 2, 2016.
The consultation paper is available at: http://www.bankofengland.co.uk/financialstability/Documents/fmi/governance_rps.pdf.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.