Submission to the Reserve Bank on ESAS access criteria
18 Nov 2024
We made a submission this month to the Reserve Bank of New Zealand Te Pūtea Matua, responding to its consultation on proposed access criteria for the Exchange Settlement Accounts System (ESAS).
ESAS is a designated Financial Market Infrastructure, operated and managed by the Reserve Bank, which financial institutions in Aotearoa New Zealand use to settle obligations between one another. This happens between ESAS accounts held at the Reserve Bank.
We have a particular interest in the access criteria for ESAS because applicants who want to become direct settlement participants in the high value or bulk electronic clearing systems managed by Payments NZ must also have an ESAS account.
We support the opening of ESAS applications to a broader range of organisations beyond registered banks, subject to maintaining the robustness and integrity of the ESAS system.
Fair and consistent rules for ESAS access, and a streamlined and efficient application process, will make it easier for new entrants to join the payments system, supporting a more competitive and innovative market.
In our submission we make a range of suggestions to simplify the proposed ESAS access criteria and support greater competition in payments.
We also suggest other refinements to the proposed access criteria to ensure that risk is managed and AML/CFT requirements are met, and to avoid inconsistency or duplication of assessments across supervisory agencies, the Reserve Bank and Payments NZ.