To All Depository Institutions and Others Concerned in the Second Federal Reserve District:

In a press release, the Federal Reserve Board requested comment on proposed revisions to Part II of its Policy Statement on Payment System Risk (PSR Policy). The PSR Policy 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.

Among the key revisions are:

• 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 Systematically 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 ninety days of publication in the Federal Register.

Press release
Board's notice

Contacts:
Jeff Stehm
Assistant Director
Division of Reserve Bank Operations and Payment Systems
202-452-2217
Jeff.Stehm@frb.gov

Douglas Conover
Senior Analyst
Division of Reserve Bank Operations and Payment Systems
202-452-2887
Douglas.Conover@frb.gov