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Communiqué of the Banco de Portugal on Changes in the Operating Rules of SPGT

From 1 February 2002 onwards, some changes are introduced in the rules governing the Portuguese RTGS system (SPGT- Sistema de Pagamentos de Grandes Transacções), which has been in operation since 1996.

The decision to make the above-mentioned changes was based on the need to harmonise the prices charged in the domestic and in the cross-border segment of the system. This is an ongoing trend at the European Union level, which SPGT follows suit. The harmonisation of prices in domestic and cross-border transactions translates into the adoption of the degressive structure (higher number of operations, lower price) of the TARGET international price list for the domestic segment of SPGT, leading in practice to a significant fall in prices charged domestically.

The optimised management of systemic risk, inherent in the operation of payment systems, is also envisaged in the changes introduced in the rules. The limit set for the so-called large-value operations – to be compulsorily processed via SPGT – is thus adjusted, i.e. it is cut from EUR 500,000 to EUR 100,000.

The adoption of a target limit for the exclusive processing of payments in SPGT – a characteristic of the Portuguese payment system – which has been set at EUR 100,000, a figure more in line with the European concept of large value, makes it possible to withdraw from the Interbank Clearing System (SICOI - Sistema de Compensação Interbancária) part of the operations settled, which albeit negligible in terms of the average volume (0.04%), it is relevant in terms of the average value settled (19%).

For the sake of discipline and rationalisation in the utilisation of the system, some stricter parameters, warranted at the launching and consolidation stage, are also made less stringent, considering that currently they are not deemed required; the choice of the system to be used shall rest with the participants and be based on the price factor and/or processing urgency. Prices continue to provide an incentive, albeit smaller, for the timely settlement of domestic transfers; end-of-day processing continues to be charged with an additional fee.

The withdrawal of operations – negligible in terms of volume to SICOI – resulting from this policy adjustment of payment systems in Portugal, is however reflected in a relatively significant increase in processing via SPGT, which will make it possible to optimise the utilisation capacity of this system's infrastructures and make up for the fall observed in domestic prices. This will bring about the continued recovery by Banco de Portugal of SPGT investment and maintenance costs, by means of an adequate degree of coverage of costs by revenue generated.

In line with Banco de Portugal intervention in the field of payment systems, the changes that were to be introduced were submitted to the prior opinion of the SPGT Pilot Group. This consultation showed that there was a high convergence of positions and acknowledged the progress achieved and the benefits expected: higher distinction between retail systems (SICOI) and large-value systems (SPGT), with a significant reduction in systemic risk; and improved quality of the services provided to participating institutions and their customers.

The changes referred to above, which have an impact on the SPGT Regulation and Manual of Procedures and on the Pricing of Banco de Portugal Services, have been communicated in due time to the participants, by means of a Circular Letter.