The Bank of Canada (BoC) has designated, effective Monday, the payment system, the Automated Clearing and Settlement System (ACSS) for oversight under the Payment Clearing and Settlement Act (PCSA) as a clearing and settlement system that has the potential to pose payments system risk.

The ACSS is owned and operated by the Canadian Payments Association (CPA), an organization established by the Canadian Payments Act to operate national payment systems.

The move brings the ACSS under the formal oversight of the central bank, and requires it to comply with risk management standards that are modelled on global principles for financial market infrastructure.

On average, the ACSS clears almost 27 million transactions per day, valued at $24.7 billion. “Given the variety of payments cleared, several without immediate substitutes, and the importance of those payments for a broad range of economic activity, it is considered to be central to the Canadian payments system,” the BoC says in announcing the decision to designate the ACSS.

The federal finance minister “has confirmed that he is of the opinion that designation of the ACSS is in the public interest,” the BoC adds.

The ACSS joins five other financial market infrastructure organizations that have previously been designated by the bank, including: the Large Value Transfer System (LVTS), CDSX, CLS Bank, SwapClear and the Canadian Derivatives Clearing Service. In 2014, the BoC was also given jurisdiction over payment infrastructure firms that could pose a risk to the payments system.

“A disruption or failure of a prominent payment system could cause a significant adverse effect on economic activity in Canada, potentially leading to a general loss of confidence in the overall Canadian payments system,” the BoC says.