The HVCS is a pure payment system and is operated by Payments NZ. It plays an important role in New Zealand's financial system by making sure that large payments, such as house settlements, are cleared and able to be settled.
The HVCS cannot be easily substituted by another system and disruption to its activities could damage New Zealand's financial system, Director of Specialist Supervision Scott McKinnon says.
"Every month more than $420bn of transactions are cleared using HVCS, which is more than New Zealand's GDP - representing a significant value of payments in New Zealand."
The proposal is made under the Financial Market Infrastructure Act 2021. If designated, HVCS will be required to comply with the FMI Act and Standards. It will also receive greater legal protections.
"Designating HVCS will allow us to make sure that HVCS is operating soundly and efficiently. It would also allow us to look closely at the governance, access and crisis management of HVCS, while giving us powers that can help avoid significant damage to the financial system if there were problems with HVCS."
Designating HVCS would also promote confident, informed, fair, efficient and transparent financial markets.
"We really want to hear from all of the HVCS's participants on our proposal. This includes indirect participants and stakeholders."
This proposal is open for consultation until 30 September.
Key information
- The Reserve Bank of New Zealand - Te Putea Matua is proposing to recommend that the Minister of Finance designates the HVCS.
- The HVCS is a pure payment system operated by Payments NZ and has not been regulated before.
- This proposal is made under the FMI Act that came into force in 2021.
- The Reserve Bank will decide whether to continue with its proposal to the Minister after it has considered submissions on the proposal. The Minister ultimately decides whether or not to designate HVCS.
- Visit our consultation page
