To All Depository Institutions and Others Concerned in the Second Federal Reserve District:
The following is from a statement by the Board of Governors of the Federal Reserve System:
The Federal Reserve Board has approved modifications to the settlement finality for ACH credit transactions processed by the Federal Reserve Banks so that settlement becomes final when posted to depository institutions' accounts. The Board will require prefunding for any ACH credit transactions that settle through a Federal Reserve account that is being monitored in real time to help manage settlement risk.
The Reserve Banks will be modifying their software and their ACH operating circular to implement settlement-day finality and prefunding will be implemented in early 2001. A specific implementation date will be announced three months in advance of the effective date.
The Board's notice, in the Federal Register of November 17, is available as a file (pdf - 35kb). Questions on this matter may be directed, at this Bank's East Rutherford Operations Center, to Henry F. Wiener, Vice President, Electronic Payments Function.