The Bangko Sentral ng Pilipinas has issued rules for infrastructure that provides real-time settlement of payments, a high official said.

"By complying with the Principles for Financial Market Infrastructures, the rules aim to ensure that the Peso Real Time Gross Settlement Payment System will have in place necessary safeguards that are in accordance with global best practices," Governor Felipe Medalla said in a statement.

The BSP's rules for funds transfer instructions, or other obligations individually on a transaction-by-transaction basis, are set in order to ensure the smooth flow of funds in the financial system.

Moreover, said rules comprise the first policy issuance of the BSP in its capacity as the RTGS PS operator under Republic Act 11127 or the National Payment System Act.

"The newly approved rules adhere to the Principles for Financial Market Infrastructures jointly developed by the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions," the statement said.

Financial market infrastructures

The PFMI consists of 24 principles that apply to financial market infrastructures, 18 of which pertain to systemically important payment systems, such as the RTGS PS.

The rules issued under BSP Memorandum M-2022-0049 dated 22 November 2022 require all RTGS PS participants to comply with all laws and regulations on payment systems and provide for penalties and sanctions.

RTGS PS participants include the BSP and financial institutions maintaining settlement accounts with the BSP, entities that are sponsored into settlement, as well as financial market infrastructures, clearing switch operators, and critical service providers within the RTGS ecosystem.

Besides formally bringing the RTGS PS operations up to par with international best practices, the new rules are expected to promote inclusivity among RTGS PS participants.

"The rules will broaden access to the RTGS PS by allowing more financial institutions to participate in this critical infrastructure for large-value payments," Medalla added.

The BSP has streamlined the qualification requirements for prospective members of the real-time payment system.

Thus, non-bank e-money issuers and other entities may now settle their retail transactions through the RTGS PS without the need for sponsorship by existing participants.