The Real-Time Rail public policies have been directed by the Bank of Canada and the Department of Finance to ensure the Real-Time Rail promotes fair and open access, enables competition and innovation, fosters fair and transparent pricing, implements appropriate risk controls and considers end-user interests.
The following risk management and public policy objectives guide the design and operation of the Real-Time Rail:
The measurement and management of credit, liquidity, operational, and other risks through the Real-Time Rail rules is developed to minimize the transmission of negative shocks between participants and other systems. A sound legal framework with robust and transparent rules for Real-Time Rail participants (who must be Payments Canada members) is consistent with Payments Canada’s public purpose mandate.
A transparent, open and risk-based access framework for the Real-Time Rail is set by Payments Canada, with complementary provisions in the Canadian Payments Act respecting membership, and the Bank of Canada requirements for Real-Time Rail participants wishing to obtain a settlement account. The Real-Time Rail access model facilitates access by non-bank payment service providers once the relevant legislative and regulatory supports are in place. Access requirements are based on function and the role potential participants wish to establish, and Real-Time Rail participants will be able to choose between participating directly or indirectly in the settlement of their payments.
The Real-Time Rail is a national real-time payment utility that offers efficient account-to-account transfers providing a wide reach to the vast majority of Canadian deposit accounts.
The system is designed so that all Real-Time Rail participants are subject to the same rules and responsibilities. Payments Canada will fully control the evolution of the Real-Time Rail system over time, including all components of the utility used to initiate and complete a payment.
The Real-Time Rail pricing is set by Payments Canada and (as with our other systems) and is based on the true cost of use. The design of the system allows for fair competition among all participants to enable the development of innovative products and services that meet the needs of businesses and consumers at a competitive price point.
Go-live is designed based on the scope agreed to by Payments Canada, its regulators and a broad set of member institutions, with input from stakeholders. Any deviations from this agreed upon scope must receive appropriate approvals. Payments Canada continues to ensure that R1 functionality and design are acceptable to a wide range of stakeholders.
The Real-Time Rail is designed to fully observe all of the Bank of Canada’s risk management standards for prominent payment systems, as per our expectation that the Real-Time Rail be designated as a Prominent Payment System at go-live. This includes employing a cover-all, defaulter pay, credit-risk model with the Bank of Canada as the settlement agent, and a Real-Time Gross Settlement model.
The Real-Time Rail timelines work with Lynx and other modernization priority timelines; notably, from a financial system risk perspective, as a collective priority was placed on the implementation of Lynx.
After go-live, the Real-Time Rail will continue to evolve and be invested in, with additional enhancements and functionality being added on a prioritized basis, in consultation with members, stakeholders and regulators.
