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Home > Financial Stability > Recognised Payment Systems Standards

Recognised Payment Systems Standards

Under section 188 of the Banking Act 2009 the Bank of England may publish principles to which the operators of recognised interbank payment systems are to have regard.  The Bank has adopted the global standards drawn up by central banks and securities market regulators working together through the Committee on Payment and Settlement Systems (CPSS) and the International Organization of Securities Commissions (IOSCO). The Principles for financial market infrastructures were published by CPSS-IOSCO in April 2012 following consultation and were published by the Bank as its s.188 Principles in December 2012. These replace the Bank’s previous fourteen Principles, published in January 2010. A link to the Principles can be found under 'External Links'.

Operators of recognised payment systems will be expected to take appropriate action in respect of matters described in the Principles in a way that is appropriate to their system's particular characteristics and the risks they pose to the UK financial systems or to business or other interests.
The Banking Act 2009 provides the Bank with a graduated set of tools to support its oversight of recognised payment systems. These include powers to gather information, issue directions, require changes to system rules, appoint inspectors, and require the commissioning of an independent report. There are also powers of sanction for compliance failures as specified in the Act, including publishing the fact of a compliance failure, financial penalties, closure of a system and management disqualification.

Section 198(3) of the Banking Act requires the Bank to publish a statement of principles to be applied when considering whether to impose a financial penalty, and the amount of that penalty. A link to this document can be found under External Links.

Key Resources

Policy on Financial penalties