Classification of payment systems and Settlement Finality Directive designation

Classification of payment systems

The ECB Regulation on oversight requirements for systemically important payment systems, (SIPS Regulation), as amended specifies criteria for the classification of payment systems, which are related to size, market share, cross-border activity and the provision of settlement services to other financial market infrastructures.

According to these criteria, Eurosystem payment systems are distinguished between Systemically Important Payment Systems (SIPS), Prominently Important Retail Payment Systems (PIRPS) and Other Retail Payment Systems (ORPS). 

To this end, the Central Bank of Cyprus (CBC) classifies, on an annual basis, local retail payment systems in line with the Eurosystem’s Oversight Framework for Retail Payment Systems (OFRPS).

JCC Cards Payment System (JCC Cards) is classified as a PIRPS, while the Cyprus Clearing House for cheques (CCH) and the Cyprus SEPA Direct Debit Payment System (CY-SDD) are classified as ORPS and are published on the ECB's website.

Settlement Finality Directive (SFD) - Designated Payment and Securities Settlement Systems

The European Settlement Finality Directive 98/26/EC, as amended (SFD) regulates designated systems used by participants to transfer financial instruments and payments. It guarantees that transfer orders which enter into such systems are also finally settled, regardless of whether the sending participant has become insolvent or transfer orders have been revoked in the meantime.

The CBC, acting as the competent authority in accordance with the provisions of the Settlement Finality in Payment Systems and Securities Settlement Systems Law of 2003 (only available in Greek), as amended (200620112012, 20162017), and Article 10(1) of the SFD, has designated as systemically important TARGET2-CY and the Central Depository Central Registry (CDCR) of the Cyprus Stock Exchange (CSE) and has accordingly notified the European Securities and Markets Authority (ESMA).