[Federal Register Volume 81, Number 141 (Friday, July 22, 2016)]
[Rules and Regulations]
[Pages 47692-47694]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-17334]
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FEDERAL RESERVE SYSTEM
12 CFR Chapter II
[Docket No. OP-1544]
Federal Reserve Policy on Payment System Risk; Procedures for
Measuring Daylight Overdrafts
AGENCY: Board of Governors of the Federal Reserve System.
ACTION: Policy statement.
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SUMMARY: The Board of Governors of the Federal Reserve System (Board)
has revised part II of the Federal Reserve Policy on Payment System
Risk (PSR policy) related to the procedures for measuring balances
intraday in institutions' accounts at the Federal
[[Page 47693]]
Reserve Banks (Reserve Banks) to conform with enhancements to the
Reserve Banks' same-day automated clearinghouse (ACH) service
previously approved by the Board.
DATES: Effective Date: September 23, 2016.
FOR FURTHER INFORMATION CONTACT: Jeffrey D. Walker, Assistant Director
(202-721-4559), Jason Hinkle, Manager, Financial Risk Management (202-
912-7805), or Michelle D. Olivier, Senior Financial Services Analyst
(202-452-2404), Division of Reserve Bank Operations and Payment
Systems, Board of Governors of the Federal Reserve System; for users of
Telecommunications Device for the Deaf (TDD) only, contact 202/263-
4869.
SUPPLEMENTARY INFORMATION:
Background
The Board's PSR policy establishes the procedures, referred to as
posting rules, for the settlement of credits and debits to
institutions' Federal Reserve accounts for different payment types.\1\
The application of these posting rules determines an institution's
intraday account balance and whether it has incurred a negative balance
(daylight overdraft).
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\1\ The Board's PSR policy is available at
www.federalreserve.gov/paymentsystems/psr_policy.htm.
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As announced on September 23, 2015, the Board approved enhancements
to the Reserve Banks' FedACH[supreg] SameDay Service (FedACH SameDay
Service) effective September, 23, 2016.\2\ The enhancements are
intended to align the Reserve Banks' existing opt-in same-day ACH
service with amendments to NACHA's Operating Rules and Guidelines.\3\
Under the newly enhanced Reserve Bank service, all receiving depository
financial institutions will be required to participate in same-day ACH,
and originating depository financial institutions will be required to
pay a fee to receiving depository financial institutions for each same-
day ACH forward transaction. The NACHA amendments, as incorporated into
the Reserve Bank Operating Circulars, will become effective in multiple
phases, beginning with same-day credit and return transactions this
September and followed by same-day debit transactions in September
2017. Upon implementation of the first phase, the Reserve Banks'
current opt-in same-day ACH service will cease to exist and will be
supplanted by the newly-enhanced same-day service. The PSR policy's
posting rules for forward and return same-day ACH transactions are
being updated to conform to the Reserve Banks' new FedACH SameDay
Service, effective September 23, 2016.
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\2\ 80 FR 58248 (Sep. 28, 2015).
\3\ NACHA, whose membership consists of insured financial
institutions and regional payment associations, establishes network-
wide ACH rules through its Operating Rules & Guidelines. As an ACH
operator, the Reserve Banks, through Operating Circular 4,
incorporate NACHA's Operating Rules & Guidelines as rules that
govern clearing and settlement of commercial ACH items by the
Reserve Banks, except for those provisions specifically excluded in
the Operating Circular.
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Under the Reserve Banks' current same-day ACH service, credits and
debits for forward same-day ACH transactions post at 5:00 p.m.\4\
Beginning September 23, 2016, credits and debits for same-day ACH
credit transactions will post at 1:00 p.m. or 5:00 p.m., depending on
when the ACH file is received by the Reserve Banks for processing.
Forward ACH debit transactions will be eligible to settle same-day
beginning September 15, 2017, as part of the implementation of the
second phase of the NACHA rule amendments, and credits and debits for
same-day ACH debit transactions will post according to the same posting
rules as same-day ACH credit transactions.\5\ The posting of future-
dated ACH forward transactions will not be affected, and credits and
debits for these transactions will continue to post at 8:30 a.m. on the
effective settlement date.
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\4\ All times are eastern time.
\5\ Enhancements to the Reserve Banks' same-day ACH service will
alter treatment of check truncation items that settle through
FedACH. A check truncation item is a check that has been converted
into an ACH debit entry for presentment and settlement over the ACH
network based on an agreement between the collecting and paying
banks. Under the current posting rules, check truncation
transactions post at 5:00 p.m. on the current business day.
Beginning September 23, 2016, check truncation transactions will
post at the same time as other ACH debit transactions at 8:30 a.m.
on the next business day and will post either next-day or same-day,
as appropriate, beginning with phase two of the NACHA rule
amendments. At this time, the Reserve Banks do not have any volume
associated with check truncation items.
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The approved enhancements effective this September also alter the
settlement of ACH return items processed by the Reserve Banks. Under
the current posting rules, credits and debits for returns of future-
dated and same-day ACH forward items post either at 8:30 a.m. or in the
afternoon at 5:00 p.m. and 5:30 p.m., respectively, with the specific
posting time determined by when the item is received by the Reserve
Banks. Effective September 23, 2016, all ACH return items, regardless
of whether the associated forward item was future-dated or same-day,
will post at the next available posting time or following the
settlement of the associated forward transaction. Thus, credits and
debits for return items will post at 8:30 a.m., 1:00 p.m., 5:00 p.m.,
or 5:30 p.m., with the specific posting time determined by when the
item is received by the Reserve Banks.\6\
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\6\ Paper returns, FedLine Web returns, paper notifications of
change (NOCs) and FedLine Web NOCs will only be processed twice
daily at 2:15 a.m. and 2:45 p.m. As such, these transactions will
post at 8:30 a.m. or 5:00 p.m., depending on when the item is
received by the Reserve Banks.
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Policy on Payment System Risk
The Federal Reserve Policy on Payment System Risk, section II.A,
under the heading ``Procedures for Measuring Daylight Overdrafts'' and
the subheadings ``Post at 8:30 a.m. eastern time,'' ``Post at 1:00 p.m.
eastern time,'' ``Post at 5:00 p.m. eastern time,'' and ``Post at 5:30
p.m. eastern time,'' is amended as follows:
Post at 8:30 a.m. eastern time:
+/- Term deposit maturities and accrued interest
+/- Government and commercial ACH transactions, including return items
\7\
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\7\ Institutions that are monitored in real time must fund the
total amount of their commercial ACH credit originations in order
for the transactions to be processed. If the Federal Reserve
receives commercial ACH credit transactions from institutions
monitored in real time after the scheduled close of the Fedwire
Funds Service, these transactions will be processed at 12:30 a.m.
the next business day, or by the ACH deposit deadline, whichever is
earlier. The Account Balance Monitoring System provides intraday
account information to the Reserve Banks and institutions and is
used primarily to give authorized Reserve Bank personnel a mechanism
to control and monitor account activity for selected institutions.
For more information on ACH transaction processing, refer to the ACH
Settlement Day Finality Guide available through the Federal Reserve
Financial Services Web site at http://www.frbservices.org.
The federal government will not participate in the same-day ACH
upon initial implementation in September 2016. ACH forward
transactions originated or received by the federal government will
not be eligible for same-day settlement and will settle on the next
business day, or on a future date as indicated by the effective
settlement date.
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+/- Commercial check transactions, including returned checks \8\
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\8\ For the three commercial check transaction posting times,
the Reserve Banks will post credits and debits to institutions'
accounts for checks deposited and presented, respectively, at least
30 minutes before the posting time.
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+ Treasury checks, postal money orders, local Federal Reserve Bank
checks, and savings bond redemptions in separately sorted deposits;
these items must be deposited by the latest applicable deposit deadline
preceding the posting time
+ Advance-notice Treasury investments
[[Page 47694]]
- Penalty assessments for tax payments from the Treasury Investment
Program (TIP) \9\
\9\ The Reserve Banks will identify and notify institutions with
Treasury-authorized penalties on Thursdays. In the event that
Thursday is a holiday, the Reserve Banks will identify and notify
institutions with Treasury-authorized penalties on the following
business day. Penalties will then be posted on the business day
following notification.
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Post by 1:00 p.m. eastern time:
+/- Commercial check transactions, including returned checks
+/- FedACH SameDay Service transactions, including return items
+ Same-day Treasury investments
Post at 5:00 p.m. eastern time:
+/- FedACH SameDay Service transactions, including return items \10\
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\10\ Paper returns, FedLine Web returns, paper notifications of
change (NOCs), and FedLine Web NOCS will only post at 8:30 a.m. and
5:00 p.m., depending on when the item is received by the Reserve
Banks.
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+ Treasury checks, postal money orders, and savings bond redemptions in
separately sorted deposits; these items must be deposited by the latest
applicable deposit deadline preceding the posting time
+ Local Federal Reserve Bank checks; these items must be presented
before 3:00 p.m. eastern time
Post at 5:30 p.m. eastern time:
+/- FedACH SameDay Service return transactions
+/- Commercial check transactions, including returned checks
* * * * *
By order of the Board of Governors of the Federal Reserve
System, acting through the Director of the Division of Reserve Bank
Operations and Payment Systems under delegated authority, July 18,
2016.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2016-17334 Filed 7-21-16; 8:45 am]
BILLING CODE 6210-01-P