Participants of the MEPS play an important role in ensuring the smooth
functioning of the payment system. The inability of any participant in making
payments smoothly through its MEPS front-end computer could trigger systemic
liquidity difficulties. As part of our regular review of the MEPS, the following
measures will be implemented to reduce the risk of such a situation arising.
Front-end computer backup and business resumption plan
2 Banks are required to have appropriate front-end computer backup and
business resumption plan that commensurate with the scale of their operations.
As a guide, banks are expected to have an operational downtime of not more
than two hours.
Keeping MAS informed of events related to front-end computer failure
3 Banks should keep MAS MEPS Helpdesk informed of all events related to
their MEPS front-end computer failure as soon as they arise. These events
include:
- Encounter of front-end computer failure;
- Recovery of front-end computer failure; and
- Activation of manual back-up procedures.
Invoking of manual back-up services
4 Banks should only invoke the manual back-up services provided under
MAS Notice 710 and 712 as a last resort when both their production and back-up
systems fail to function. To mitigate operational risk, the bank must not make any
more payments using its front-end computer for that day, once the manual back-
up is invoked.
Extension of MEPS operating hours
5 In situations where banks have to request for extension of MEPS operating
hours, they should do so by calling the Monetary Management Division of MAS at
6229-9150. MAS may extend the MEPS system cut-off time and broadcast its
decision via MEPS to inform all other participants, depending on the volume of
payments and in the event of a gridlock. MAS reserves the right to reject any
request for extension of MEPS system cut-off time at their discretion.
6 In the event that the operating hours of MEPS are extended, the trigger
bank will be subjected to the following:
- MEPS recovery fee
A MEPS recovery fee may be imposed on the bank. The fee amount will
depend on the number of incidents caused by the bank within a rolling
12-month period:
- 1st time: S$5,000
- 2nd time: S$ 10,000
- 3rd time and onwards: S$20,000
- Reporting requirement
The bank must submit a letter of explanation to MAS within one business
day of the incident based on preliminary investigation. A full report should
be submitted two weeks later or as soon as the investigation is completed.
The bank should seek MAS' approval for an extension if they require more
time to submit the full investigation report. All correspondences on the
failure reports should be directed to:
The Executive Director
Finance Department
Monetary Authority of Singapore
10 Shenton Way, MAS Building
Singapore 079117
7 The cut-off times for cheque and interbank GIRO (IBG) clearing, and SGS
transactions are not affected by any extension of MEPS operating hours. Banks
must adhere to the normal cut-off times for cheque and IBG clearing, and SGS
transactions unless otherwise advised by MAS. The cut-off times for earmarking
of Minimum Cash Balance, however, will follow the extended MEPS closing times.
8 The new measures take effect from the date of this circular. Existing and
new MEPS participants are to comply with all the above measures.
9 Should you have any queries, please contact Mr Nelson Chua at 6229-9797.
Yours faithfully
ENOCH CH'NG
EXECUTIVE DIRECTOR
MARKET INFRASTRUCTURE & RISK ADVISORY DEPARTMENT
(SENT VIA MASNET)
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