Licensing and supervision of interbank systems
The Payment Systems Act assigns Norges Bank the responsibility for licensing and supervising interbank systems in Norway. The purpose of the Act is to ensure that interbank systems are organised to promote financial stability. The Act is based on international recommendations for the organisation of payment systems.
Which systems are subject to licensing and supervision?
Licensing is required for interbank systems that are important to financial stability. Norges Bank assesses whether a system is important to financial stability on the basis of the following:
- Turnover in the system
- Risk factors in the system
- Number of participants in the system and links to other systems
- Exposures and participants' financial position
- The importance of the system in society
Two market participants are currently licensed to operate interbank systems: DnB Bank ASA and the NICS Operations Office. Norges Bank’s Settlement System (NBO) is not subject to the Payment Systems Act. The operation and development of NBO are nevertheless based on international recommendations for the organisation of payment systems.
What are the requirements for licensed systems?
General requirements regarding interbank systems are laid down in the Payment Systems Act, but Norges Bank may set more detailed requirements for the systems. These requirements will be based on an assessment of the risk factors in the individual system. Systems that have been licensed must report to Norges Bank on turnover, exposures, deviations, contingency exercises etc.
Reporting requirements for licensed interbank systems and NBO
Norges Bank oversees interbank systems pursuant to the Payment Systems Act. Section 2-9, first paragraph of the Act states that "Norges Bank may require the operator to provide information that Norges Bank deems necessary to ensure that the system is organised and operated in accordance with the provisions set out in or pursuant to this Act."
Norges Bank has developed requirements for periodic and event-based reporting for licensed systems, and supervisory meetings are held with the responsible operator at least twice a year. The Payment Systems Act does not apply to Norges Bank's own settlement system, NBO. However, Norges Bank has assumed that NBO will be subject to the same supervisory criteria as licensed interbank systems. The internal oversight function is organisationally separate from the operational responsibility for NBO.
The following reporting requirements and supervisory procedures have been established:
| Licensed interbank systems | Norges Bank's settlement system | |
| PERIODIC REPORTS: | ||
| Participation, turnover, exposure, liquidity | Annual | Semi-annual |
| Interrupted operations | Quarterly basis | Quarterly basis |
| Risk analyses, procedures for change and error management | Annual | Annual |
| Testing of contingency plans | Annual | Semi-annual |
| EVENT-BASED REPORTING: | ||
| Immediate reporting of disruptions | Disruptions classified as "critical" | Disruptions classified as "serious" |
| Notification requirement for significant changes | Yes | Yes |