Part 5 of Banking Act 2009 - statutory oversight of inter-bank payment systems
The Banking Act 2009 received Royal Assent on 12 February 2009. Part 5 of the Act establishes a new formal regulatory framework for the oversight of recognised inter-bank payment systems. The Act confers powers on the Treasury to designate, by order, a system as a “recognised system”, in the event the Treasury are satisfied that any deficiencies in the design of the system or disruption of its operation would be likely to:
- threaten the stability of, or confidence in, the UK financial system, or
- have serious consequences for business or other interests throughout the UK.
The Act also confers powers on the Bank of England (the Bank) in respect of recognised systems.
On 4 August 2009, sections 181 to 187 and sections 204 (in part) and 205 of Part 5 of the Act, which relate to the Treasury’s powers to recognise and de-recognise inter-bank payment systems, and the Bank’s information gathering and sharing powers came into force. The remainder of Part 5, which confers the oversight and enforcement powers on the Bank, came into force on 31 December 2009.
Recognition Process
On 4 August 2009, the Treasury published guidance on the recognition process.
During autumn 2009, the Treasury sought information from the Bank and, where appropriate, the FSA and the operators of various inter-bank payment systems, for the purposes of considering systems operating wholly or partly in the UK for recognition.
Having considered this information and had regard to the criteria for recognition specified in section 185 of the Act, the Treasury have decided to specify a number of systems as recognised systems. A list of recognised systems will be maintained on this webpage.
The Treasury, together with the Bank and, where appropriate, the FSA, will keep all systems operating in the UK under review.
An operator of an inter-bank payment system (or any other person), who considers that a system meets, or not longer meets, the recognition criteria may send written representations to the Treasury inviting the Treasury to consider a system for recognition or de-recognition.
Further information on the oversight framework can be found on the Bank of England’s website.
Documents and publications
The document is available below in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.
Legislation
Recognised systems and orders
External links
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