On 27 November 2020, the Eurosystem published its proposed amendments to Regulation of the European Central Bank (EU) No 795/2014 of 3 July 2014 on oversight requirements for systemically important payment systems (the SIPS Regulation) for public consultation.

The SIPS Regulation sets out the oversight requirements for both large-value and retail payment systems of systematic importance. It applies to payment systems operated both by central banks and by private operators.

The following three amendments to the SIPS Regulation are being proposed:

• To clearly set out the criteria for determining which of the Eurosystem central banks is to be designated as the competent authority for conducting the oversight of a SIPS. In exceptional circumstances where a pan-European payment system has been overseen by a national central bank (NCB) for five years or more prior to becoming a SIPS, it would also be possible under the proposal to designate two competent authorities, i.e. the European Central Bank (ECB) and an NCB. This would require further technical amendments to two implementing decisions in order to clarify how the oversight activities would be exercised when two competent authorities are designated.
• Alongside the existing criteria for the classification of a payment system as a SIPS, an additional, flexible and forward-looking methodology for the identification of a payment system as a SIPS is proposed. This change is being introduced in light of fast-moving technological trends and changing consumer preferences which may fundamentally change the way payments are made and to ensure that all relevant factors can be taken into account when assessing the systemic importance of a payment system.
• To introduce a phasing-out period prior to reclassifying a SIPS as a non-SIPS, i.e. SIPS status would be withdrawn only after the payment system concerned has not met the SIPS identification criteria for two years in a row as assessed in verification exercises. The possibility of earlier reclassification based on a case-by-case evaluation will also be provided for where it is unlikely that the payment system would fulfil the criteria for classification as a SIPS in the next verification exercise.

The deadline for comments on the consultation is 8 January 2021.