81 FR 47692 - Federal Reserve Policy on Payment System Risk; Procedures for Measuring Daylight Overdrafts

FEDERAL RESERVE SYSTEM

Federal Register Volume 81, Issue 141 (July 22, 2016)

Page Range		47692-47694
FR Document		2016-17334

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 Reserve Banks (Reserve Banks) to conform with enhancements to the Reserve Banks' same-day automated clearinghouse (ACH) service previously approved by the Board.

Federal Register, Volume 81 Issue 141 (Friday, July 22, 2016)

[Federal Register Volume 81, Number 141 (Friday, July 22, 2016)]
[Rules and Regulations]
[Pages 47692-47694]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-17334]


=======================================================================
-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

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).
---------------------------------------------------------------------------

    \1\ The Board's PSR policy is available at 
www.federalreserve.gov/paymentsystems/psr_policy.htm.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

+/- Commercial check transactions, including returned checks \8\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

+ 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.

---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

+ 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

47692 Federal Register / Vol. 81, No. 141 / Friday, July 22, 2016 / Rules and Regulations

parliamentarian for the Board and keeps services to the Agency. The office adding in its place the abbreviation
permanent and complete records and establishes financial policies and ‘‘OAS’’ each place it appears.
minutes of the acts and proceedings of procedures and oversees the
the Board. § 602.25 [Amended]
formulation and execution of the
(3) Equal Employment and Inclusion Agency’s budget. The office reports ■ 6. Amend § 602.25 by removing the
Director. The Office of Equal periodically on the status of the words ‘‘Regulation and Policy Division,
Employment and Inclusion manages Agency’s financial position, results of Office of Policy and Analysis’’ and
and directs the Agency-wide Diversity, operations, and budgetary resources. It adding in their place the words ‘‘Office
Inclusion, and Equal Employment also oversees the Agency’s travel of Regulatory Policy.’’
Opportunity Program for FCA and management, internal controls, and
FCSIC. The office serves as the chief personnel security programs. PART 603—PRIVACY ACT
liaison with the Equal Employment (10) Office of Regulatory Policy. The REGULATIONS
Opportunity Commission and the Office Office of Regulatory Policy develops
of Personnel Management on all EEO, ■ 7. The authority citation for part 603
policies and regulations for the FCA
diversity, and inclusion issues. The continues to read as follows:
Board’s consideration; evaluates
office provides counsel and leadership regulatory and statutory prior approvals; Authority: Secs. 5.9, 5.17 of the Farm
to Agency management to carry out its manages the Agency’s chartering Credit Act (12 U.S.C. 2243, 2252); 5 U.S.C.
continuing policy and program of app. 3, 5 U.S.C. 552a(j)(2) and (k)(2).
activities; and analyzes policy and
nondiscrimination, affirmative action, strategic risks to the System. § 603.340 [Amended]
and diversity. (11) Office of Examination. The Office
(4) Designated Agency Ethics Official. ■ 8. Amend § 603.340 in paragraphs (a)
of Examination evaluates the safety and
The Designated Agency Ethics Official and (b) by removing the words ‘‘Office
soundness of FCS institutions and their
is designated by the FCA Chairman to of Management Services’’ and adding in
compliance with law and regulations
administer the provisions of title I of the their place the words ‘‘Office of Agency
and manages FCA’s enforcement and
Ethics in Government Act of 1978, as Services’’ each place they appear.
supervision functions.
amended, to coordinate and manage (12) Office of Information Technology.
FCA’s ethics program and to provide PART 606—ENFORCEMENT OF
The Office of Information Technology NONDISCRIMINATION ON THE BASIS
liaison to the Office of Government manages and delivers the Agency’s
Ethics with regard to all aspects of OF HANDICAP IN PROGRAMS OR
information technology, data analysis ACTIVITIES CONDUCTED BY THE
FCA’s ethics program. infrastructure, and the security
(5) Office of Congressional and Public FARM CREDIT ADMINISTRATION
supporting Agency technology
Affairs. The Office of Congressional and resources. ■ 9. The authority citation for part 606
Public Affairs performs Congressional (13) Office of General Counsel. The continues to read as follows:
liaison duties and coordinates and Office of General Counsel provides legal
disseminates Agency communications. Authority: 29 U.S.C. 794.
advice and services to the FCA
(6) Office of Secondary Market Chairman, the FCA Board, and Agency § 606.670 [Amended]
Oversight. The Office of Secondary staff.
Market Oversight regulates and ■ 10. Amend § 606.670 in paragraph (c)
(b) Additional information. You may by removing the words ‘‘Office of
examines the Federal Agricultural obtain more information on the FCA’s
Mortgage Corporation for safety and Management Services’’ and adding in
organization by visiting our Web site at their place the words ‘‘Office of Agency
soundness and compliance with law http://www.fca.gov. You may also
and regulations. Services.’’
contact the Office of Congressional and
(7) Office of the Chief Operating Dated: July 13, 2016.
Public Affairs:
Officer. The Chief Operating Officer has Dale L. Aultman,
(1) In writing at FCA, 1501 Farm
broad responsibility for planning, Secretary, Farm Credit Administration Board.
Credit Drive, McLean, Virginia 22102–
directing, and controlling the operations
5090; [FR Doc. 2016–16962 Filed 7–21–16; 8:45 am]
of the Offices of Management Services, (2) By email at info-line@fca.gov; or BILLING CODE 6705–01–P
Examination, Regulatory Policy, and (3) By telephone at (703) 883–4056.
General Counsel in accordance with the
operating philosophy and policies of the PART 602—RELEASING FEDERAL RESERVE SYSTEM
FCA Board. INFORMATION
(8) Office of Agency Services. The 12 CFR Chapter II
Office of Agency Services manages ■ 4. The authority citation for part 602
human capital and administrative continues to read as follows: [Docket No. OP–1544]
services for the Agency. This includes Authority: Secs. 5.9, 5.17, 5.59 of the Farm
providing the following services to the Federal Reserve Policy on Payment
Credit Act (12 U.S.C. 2243, 2252, 2277a–8); System Risk; Procedures for
Agency: Staffing and placement, job 5 U.S.C. 301, 552; 12 U.S.C. 1821(t); 52 FR
evaluation, compensation and benefits, Measuring Daylight Overdrafts
10012; E.O. 12600; 52 FR 23781, 3 CFR 1987,
payroll administration, performance p. 235. AGENCY: Board of Governors of the
management and awards, employee Federal Reserve System.
§ 602.8 [Amended]
relations, employee training and ACTION: Policy statement.
development, contracting, acquisitions, ■ 5. Amend § 602.8 as follows:
records and property management, ■ a. In the second sentence of paragraph SUMMARY: The Board of Governors of the
ehiers on DSK5VPTVN1PROD with RULES

supply services, agency purchase cards, (a), by removing the words ‘‘Office of Federal Reserve System (Board) has
design, publication, and mail service. Management Services (OMS)’’ and revised part II of the Federal Reserve
(9) Office of the Chief Financial adding in their place the words ‘‘Office Policy on Payment System Risk (PSR
Officer. The Office of the Chief of Agency Services (OAS).’’ policy) related to the procedures for
Financial Officer manages and delivers ■ b. In paragraphs (b) and (c), by measuring balances intraday in
timely, accurate, and reliable financial removing the abbreviation ‘‘OMS’’ and institutions’ accounts at the Federal

VerDate Sep<11>2014 16:28 Jul 21, 2016 Jkt 238001 PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 E:\FR\FM\22JYR1.SGM 22JYR1

47694 Federal Register / Vol. 81, No. 141 / Friday, July 22, 2016 / Rules and Regulations

- Penalty assessments for tax payments SUMMARY: We are adopting a new Discussion
from the Treasury Investment airworthiness directive (AD) for all M7 We issued a notice of proposed
Program (TIP) 9 Aerospace LLC Models SA26–AT, rulemaking (NPRM) to amend 14 CFR
Post by 1:00 p.m. eastern time: SA26–T, SA226–AT, SA226–T, SA226– part 39 by adding an AD that would
+/¥ Commercial check transactions, T(B), SA226–TC, SA227–AC (C–26A), apply to all M7 Aerospace LLC Models
including returned checks SA227–AT, SA227–BC (C–26A), SA26–AT, SA26–T, SA226–AT, SA226–
+/¥ FedACH SameDay Service SA227–CC, SA227–DC (C–26B), and T, SA226–T(B), SA226–TC, SA227–AC
transactions, including return items SA227–TT airplanes. This AD was (C–26A), SA227–AT, SA227–BC (C–
+ Same-day Treasury investments prompted by reports of multiple cracks 26A), SA227–CC, SA227–DC (C–26B),
Post at 5:00 p.m. eastern time: in the steel horizontal tube of the and SA227–TT airplanes. The NPRM
+/¥ FedACH SameDay Service cockpit control column. This AD published in the Federal Register on
transactions, including return requires inspection of the cockpit April 1, 2016 (81 FR 18804). The NPRM
items 10 control column horizontal tube for was prompted by reports of multiple
+ Treasury checks, postal money cracks and repair or replacement of the cracks in the cockpit control column
orders, and savings bond cockpit control column as necessary. horizontal tube at the corners of the
redemptions in separately sorted We are issuing this AD to correct the access panel cutout, at the pulley bolt
deposits; these items must be unsafe condition on these products. welds, and at the elevator arm weld in
deposited by the latest applicable DATES: This AD is effective August 26, the steel horizontal tube of the control
deposit deadline preceding the column on M7 Aerospace SA26, SA226,
2016.
posting time and SA227 airplanes. The NPRM
+ Local Federal Reserve Bank checks; The Director of the Federal Register proposed to require inspection of the
these items must be presented approved the incorporation by reference cockpit control column horizontal tube
before 3:00 p.m. eastern time of certain publications listed in this AD for cracks and repair or replacement of
Post at 5:30 p.m. eastern time: as of August 26, 2016. the cockpit control column as necessary.
+/¥ FedACH SameDay Service return ADDRESSES: For service information This condition, if not corrected, could
transactions identified in this final rule, contact M7 result in partial or complete control
+/¥ Commercial check transactions, Aerospace LLC, 10823 NE Entrance column failure with partial or complete
including returned checks Road, San Antonio, Texas 78216; phone: loss of pitch and/or roll control. We are
* * * * * (210) 824–9421; fax: (210) 804–7766; issuing this AD to correct the unsafe
By order of the Board of Governors of the Internet: http://www.elbitsystems- condition on these products.
Federal Reserve System, acting through the us.com; email: MetroTech@ Comments
Director of the Division of Reserve Bank M7Aerospace.com. For information on
Operations and Payment Systems under the availability of this material at the We gave the public the opportunity to
delegated authority, July 18, 2016. FAA, call 816–329–4148. It is also participate in developing this AD. The
Robert deV. Frierson, available on the internet at http:// following presents the comment
Secretary of the Board. www.regulations.gov by searching for received on the NPRM (81 FR 18804,
[FR Doc. 2016–17334 Filed 7–21–16; 8:45 am] and locating Docket No. FAA–2016– April 1, 2016) and the FAA’s response
5431. to the comment.
BILLING CODE 6210–01–P

Examining the AD Docket Request for Previously Done Credit
Michael O’Brien at Bearskin Airlines
DEPARTMENT OF TRANSPORTATION You may examine the AD docket on commented they had been complying
the Internet at http:// with this AD by accomplishing the
Federal Aviation Administration www.regulations.gov by searching for service bulletins that are listed in the
and locating Docket No. FAA–2016– proposed AD. He asked if it would be
14 CFR Part 39 5431; or in person at the Docket acceptable to just accomplish a
[Docket No. FAA–2016–5431; Directorate Management Facility between 9 a.m. technical records research to see when
Identifier 2015–CE–044–AD; Amendment and 5 p.m., Monday through Friday, the required actions were last done.
39–18593; AD 2016–15–02] except Federal holidays. The AD docket We agree that credit should be given
RIN 2120–AA64 contains this AD, the regulatory for actions previously done with the
evaluation, any comments received, and service bulletins called out in the
Airworthiness Directives; M7 other information. The address for the NPRM. The NPRM already allows for
Aerospace LLC Airplanes Docket Office (phone: 800–647–5527) is this with the phrase ‘‘unless already
Document Management Facility, U.S. done’’ in paragraphs (g)(1) and (2) of the
AGENCY: Federal Aviation Department of Transportation, Docket
Administration (FAA), DOT. NPRM.
Operations, M–30, West Building Because the requested change is
ACTION: Final rule. Ground Floor, Room W12–140, 1200 already part of this AD, we have not
New Jersey Avenue SE., Washington, changed the final rule AD action based
9 The Reserve Banks will identify and notify DC 20590. on this comment.
institutions with Treasury-authorized penalties on
Thursdays. In the event that Thursday is a holiday, FOR FURTHER INFORMATION CONTACT: Conclusion
the Reserve Banks will identify and notify Andrew McAnaul, Aerospace Engineer,
institutions with Treasury-authorized penalties on We reviewed the relevant data,
ehiers on DSK5VPTVN1PROD with RULES

FAA, ASW–143 (c/o San Antonio
the following business day. Penalties will then be considered the comment received, and
MIDO), 10100 Reunion Place, Suite 650,
posted on the business day following notification. determined that air safety and the
10 Paper returns, FedLine Web returns, paper San Antonio, Texas 78216; phone: (210)
public interest require adopting this AD
notifications of change (NOCs), and FedLine Web 308–3365; fax: (210) 308–3370; email:
as proposed except for minor editorial
NOCS will only post at 8:30 a.m. and 5:00 p.m., andrew.mcanaul@faa.gov.
depending on when the item is received by the changes. We have determined that these
Reserve Banks. SUPPLEMENTARY INFORMATION: minor changes:

VerDate Sep<11>2014 14:57 Jul 21, 2016 Jkt 238001 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 E:\FR\FM\22JYR1.SGM 22JYR1

Document Created: 2016-07-22 02:38:27
Document Modified: 2016-07-22 02:38:27

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Policy statement.
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.
FR Citation		81 FR 47692