[Federal Register Volume 89, Number 91 (Thursday, May 9, 2024)]
[Notices]
[Pages 39613-39621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-10117]


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FEDERAL RESERVE SYSTEM

[Docket No. OP-1831]


Expansion of Fedwire[supreg] Funds Service and National 
Settlement Service Operating Hours

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Request for comment.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
is seeking input on a proposal to expand the operating hours of the 
Fedwire[supreg] Funds Service and the National Settlement Service 
(NSS). The Board proposes to expand the operating hours of the Fedwire 
Funds Service to 22 hours per day, 7 days per week, every day of the 
year (22x7x365) and to correspondingly expand the operating hours of 
NSS, with NSS closing 30 minutes earlier than the Fedwire Funds 
Service. At this time, the Board is not considering expanding operating 
hours for the Fedwire Securities Service. The Board requests comments 
on the potential benefits, risks, and implementation considerations of 
the proposal.

DATES: Comments on the proposed actions must be received on or before 
July 8, 2024.

ADDRESSES: You may submit comments, identified by Docket No. OP-1831, 
by any of the following methods:
     Agency website: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Email: [email protected]. Include docket 
number in the subject line of the message.
     FAX: (202) 452-3819 or (202) 452-3102.
     Mail: Ann Misback, Secretary, Board of Governors of the 
Federal Reserve System, 20th Street and Constitution Avenue, NW, 
Washington, DC 20551.
    All public comments will be made available on the Board's website 
at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as 
submitted, unless modified for technical reasons or to remove 
personally identifiable information at the

[[Page 39614]]

commenter's request. Accordingly, comments will not be edited to remove 
any identifying or contact information. Public comments may also be 
viewed electronically or in paper in Room 146, 1709 New York Avenue NW, 
Washington, DC 20006, between 9:00 a.m. and 5:00 p.m. eastern time (ET) 
on weekdays.

FOR FURTHER INFORMATION CONTACT: Mark Magro, Manager, Division of 
Reserve Bank Operations and Payment Systems (202-452-3944); Ann Sun, 
Lead Financial Institution Policy Analyst, Division of Reserve Bank 
Operations and Payment Systems (202-912-7938); or Gavin Smith, Senior 
Counsel, Legal Division (202 452-3474); or Corinne Milliken Van Ness, 
Senior Counsel, Legal Division (202-452-2421), Board of Governors of 
the Federal Reserve System. For users of Telecommunications Device for 
the Deaf (TDD), contact (202-263-4869.)

SUPPLEMENTARY INFORMATION:

I. Background

    The Federal Reserve has a long-standing policy objective to foster 
a safe and efficient U.S. payment system. The Federal Reserve advances 
its objectives for the payment system through, among other things, the 
Federal Reserve Banks' (Reserve Banks) operation of two large-value 
payment services: the Fedwire[supreg] Funds Service and NSS.\1\ The 
Fedwire Funds Service is a real-time gross settlement (RTGS) service 
that allows participating financial institutions (participants) to send 
and receive individual electronic funds transfers up to one penny less 
than $10 billion in value that are immediate to participants, final, 
and irrevocable. NSS is a multilateral settlement service that allows 
for immediate, final, and irrevocable settlement of obligations that 
arise from private-sector clearing arrangements, such as check 
clearinghouses, a private-sector ACH network, and securities settlement 
systems.\2\ Together, these services, alongside a large-value payment 
service operated by the private sector, provide the backbone for the 
nation's payment system and thereby support a significant amount of 
economic activity in the United States, including large-value domestic 
financial market transactions, the U.S. dollar leg of many cross-border 
transactions, and private-sector payment clearing arrangements.\3\
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    \1\ ``Fedwire'' is a registered service mark of the Federal 
Reserve Banks.
    \2\ Settlement files submitted to NSS can be for an amount up to 
one penny less than $10 trillion; each entry in a settlement file 
can be for an amount up to one penny less than $100 billion.
    \3\ The private-sector large-value payment service is 
CHIPS[supreg], which is owned and operated by The Clearing House 
Payments Company L.L.C. (TCH). ``CHIPS'' is a registered service 
mark of TCH. While the Fedwire Funds Service supports large-value 
payments (often referred to as ``wholesale'' payments), not all 
payments sent through the Fedwire Funds Service would be considered 
large value. For example, while the average value of a payment in 
2023 on the Fedwire Funds Service was $5.625 million, the median 
value was approximately $19,000. In general, smaller-value, general 
purpose payments sent by consumers and businesses are made using 
services designed for smaller value (``retail'') transactions such 
as the Reserve Banks' check clearing and automated clearinghouse 
(ACH) services, and the FedNow[supreg] Service for instant payments. 
``FedNow'' is a registered service mark of the Federal Reserve 
Banks.
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    The Federal Reserve has consistently improved its payment services 
to meet the evolving needs of the U.S. economy. As technological 
advancements and globalization of commerce continue to drive change in 
the large-value payment landscape, the Board believes that expanding 
the availability of the Fedwire Funds Service and NSS would enhance the 
safety and efficiency of the U.S. payment system by extending the hours 
in which settlement in risk-free central bank money can occur.\4\ Thus, 
the Board is proposing to expand the operating hours of the Fedwire 
Funds Service to 22 hours per day, 7 days per week, every day of the 
year and to expand the operating hours of NSS correspondingly, with NSS 
closing 30 minutes earlier than the Fedwire Funds Service.\5\ The Board 
recognizes that a significant expansion in operations for large-value 
payments in the short term might pose burdensome technical and 
operational changes at a time when the industry will also be adjusting 
to the new ISO[supreg] 20022 message format for large-value payments 
and instant payment services.\6\ Therefore, the Board proposes that the 
expansion to 22x7x365 would be implemented no sooner than two years 
after the migration of the Fedwire Funds Service to the ISO 20022 
standard, scheduled for March 2025. The final implementation timeline 
for 22x7x365 will be determined based on input from this request for 
comment, among other relevant considerations.
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    \4\ Central bank money is a liability of the central bank that 
can be used for settlement purposes and is considered free of credit 
and liquidity risks. Central bank money has traditionally taken two 
forms: cash and reserve balances held by eligible financial 
institutions at the central bank.
    \5\ Fedwire Funds Service is currently open from 9:00 p.m. ET of 
the preceding calendar day to 7:00 p.m. ET, five days per week, 
Monday through Friday excluding holidays observed by the Reserve 
Banks. NSS is open from 9:00 p.m. to 6:30 p.m. ET, five days per 
week, Monday through Friday excluding holidays observed by the 
Reserve Banks. The Federal Reserve has historically provided at 
least 30 minutes between the close of NSS and the close of the 
Fedwire Funds Service, recognizing that the Fedwire Funds Service is 
the primary alternative for orderly and efficient settlement of 
bilateral obligations in case a settlement arrangement is unable to 
complete its multilateral settlement through NSS.
    \6\ ``ISO'' is a registered service mark of the International 
Organization for Standardization.
    For example, the FedNow Service, which was launched in July 
2023, is an instant payments service. Instant payments allow 
consumers and businesses to send and receive funds from their 
accounts at banks and credit unions in real time, any time of day, 
any day of the year, with immediate funds availability to receivers.
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    The Board is seeking comment on the potential benefits, risks, 
costs, and other considerations of expanded hours for the Fedwire Funds 
Service and NSS, as described in Section II. The Board is also 
requesting comment on implementation considerations, as described in 
Section III. As noted, the Board is not considering expanding operating 
hours for the Fedwire Securities Service at this time.

II. Proposed Action

A. Proposal

    The Board proposes to expand the operating hours of Fedwire Funds 
Service to 22x7x365 and to correspondingly expand the operating hours 
of NSS. It is anticipated that if the proposal is adopted NSS would 
continue to close at 6:30 p.m. ET, 30 minutes prior to the close of 
Fedwire Funds Service at 7:00 p.m. ET. Both services will maintain 
their current opening time of 9:00 p.m. ET of the preceding calendar 
day for the proposed weekend operating days. Table 1 summarizes the 
proposed changes to operating hours for the Fedwire Funds Service and 
NSS.

[[Page 39615]]



   Table 1--Proposed Changes to Operating Hours for the Fedwire Funds
                             Service and NSS
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                                   Current operating  Proposed operating
                                         hours               hours
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Fedwire Funds Service \7\.......  9:00 p.m. ET-7:00   9:00 p.m. ET-7:00
                                   p.m. ET, Monday-    p.m. ET, every
                                   Friday, excluding   day.
                                   holidays.
NSS \8\.........................  9:00 p.m. ET-6:30   9:00 p.m. ET-6:30
                                   p.m. ET, Monday-    p.m. ET, every
                                   Friday, excluding   day.
                                   holidays.
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B. Rationale for Proposal
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    \7\ The Fedwire Funds Service begins processing online payment 
orders beginning at 9:00 p.m. ET on the preceding calendar day. The 
Fedwire Funds Service begins processing online nonvalue messages at 
8:35 p.m. ET on the preceding calendar day. The cutoff time for 
special account messages is 5:00 p.m. ET, the cutoff time for 
customer messages is 6:45 p.m. ET, and the cutoff time for bank 
messages is 7:00 p.m. ET. The Fedwire Funds Service closes at 7:00 
p.m. ET.
    \8\ The file processing window for NSS begins at 9:00 p.m. ET on 
the preceding calendar day and closes at 6:30 p.m. ET.
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    The Federal Reserve has expanded operating hours for the Fedwire 
Funds Service and NSS over time in response to changing market 
conditions and industry demand. Most recently, the Board received 
public comments on expanded hours for the Fedwire Funds Service and NSS 
in response to Federal Register notices related to the development of 
the FedNow Service.\9\ Certain commenters indicated that expanded hours 
would provide a means for participants in retail instant payment 
services to manage liquidity needs related to instant payment activity 
on a round-the-clock basis.\10\ To address this industry input and meet 
FedNow Service implementation timelines, the Board determined that 
liquidity management transfer functionality should be provided within 
the FedNow Service at the time of its launch in July 2023. However, the 
Board indicated it would continue to explore expanded hours for the 
Fedwire Funds Service and NSS, given the broad benefits that expanded 
hours could provide to financial markets and the payment systems and 
market infrastructures that support those markets.\11\ Subsequently, in 
a 2022 notice regarding the implementation of the ISO 20022 format for 
the Fedwire Funds Service, the Board indicated that the Reserve Banks 
would conduct engagement with industry stakeholders as part of its 
analysis of expanded operating hours for the Fedwire Funds Service and 
NSS.\12\
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    \9\ See 83 FR 57351 (Nov. 15, 2018) and 84 FR 39297 (Aug. 9, 
2019).
    \10\ The 24x7x365 nature of instant payments requires banks to 
have sufficient liquidity to settle instant payments at any time, 
any day of the week. As a result, banks need a method to fund 
accounts used to settle instant payment transactions during hours 
when large-value payment services are not currently open. See 83 FR 
57351 (Nov. 15, 2018).
    \11\ See 84 FR 39297 (Aug. 9, 2019). The Board indicated that 
further analysis was needed to evaluate fully the relevant 
operational, risk, and policy considerations of expanded Fedwire 
Funds Service and NSS operating hours.
    \12\ See 87 FR 64217 (Oct. 24, 2022).
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    The Reserve Banks conducted this engagement through outreach 
sessions with a broad range of stakeholders, including large global 
financial institutions, small and mid-sized banks in different regions, 
and nonbanks and service providers, to better understand the needs and 
concerns of industry. While these industry outreach sessions were 
informal and not as comprehensive as an information collection 
conducted through the broader Federal Register notice process, 
stakeholders raised several initial themes. Overall, industry 
stakeholders that are active in global payments markets expressed 
strong support for an expansion of Fedwire Funds Service and NSS 
operating hours up to 24x7x365, stating that expanded hours would 
enhance the ability of cross-border payments and international commerce 
to be conducted in U.S. dollars and help preserve the status of the 
U.S. dollar as the preferred currency for global settlements.\13\ In 
addition, industry stakeholders noted that while 24x7x365 operating 
hours would be an ideal state in the longer term, other payment system 
improvement initiatives should be prioritized ahead of an expansion, 
including implementation of the new FedNow Service for instant payments 
and ISO 20022 migration of the Fedwire Funds Service. In general, these 
stakeholders noted that shifting large-value payment operations to full 
24x7x365, with no downtime to accommodate system changes and other 
operational activities, would be challenging to implement in the 
shorter term.\14\
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    \13\ Certain industry stakeholders have also expressed these 
views via the industry-led Payments Risk Committee. See Payments 
Risk Committee: Fedwire Expanded Hours Whitepaper, available at 
https://www.newyorkfed.org/medialibrary/microsites/prc/files/2021/prc-fedwire-expanded-hours-considerations-white-paper.
    \14\ In outreach sessions, industry stakeholders indicated that 
the elimination of downtime between the close and open of the 
Fedwire Funds Service and NSS could pose a more significant 
challenge than expanding operating hours into the weekend.
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    Smaller banks provided differing perspectives on the benefits of 
Fedwire Funds Service and NSS expanded hours, with some institutions 
expressing a lack of pressing need and business case compared with the 
level of investment required to operate on a 24x7x365 basis. Other 
institutions saw value in expanded hours to provide increased 
flexibility in operating hours among West Coast banks or to maximize 
time available to recover from an operational issue on the same 
business day. Overall, smaller banks noted the importance of 
maintaining optionality to participate in Fedwire Funds Service and NSS 
operating hours such that banks are not required to operate or 
otherwise maintain staff during expanded hours.
    Concurrent with the Federal Reserve's consideration of expanded 
operating hours for the Fedwire Funds Service and NSS, the 
international community has been advancing initiatives to improve the 
cost, speed, accessibility, and transparency of cross-border payments. 
In 2020, the G20 leaders endorsed the Roadmap for Enhancing Cross-
Border Payments, which set out a series of ``building blocks'' to 
address the frictions underlying the challenges associated with cross-
border payments.\15\ Building Block 12 focused on extending and 
aligning the operating hours of existing payment infrastructures and 
arrangements across jurisdictions, particularly RTGS systems. Cross-
jurisdiction alignment could speed up cross-border payments, improve 
liquidity management, and reduce settlement risk, among other 
benefits.\16\ Global alignment of large-value RTGS system operating 
hours has been a driver of past expansions for the

[[Page 39616]]

Fedwire Funds Service because of the risk-reducing benefits.\17\ Though 
the gaps in operating hours between the Fedwire Funds Service and other 
RTGS systems have decreased over time, gaps still remain, in particular 
during weekend hours. Expanding the operating hours of the Fedwire 
Funds Service and NSS into the weekend would be consistent with the 
broader G20 agenda and would be consistent with the actions of other 
central banks that are considering or have already expanded operating 
hours for their large-value payment services.\18\
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    \15\ See Financial Stability Board: Enhancing Cross-border 
Payments: Stage 3 Roadmap available at https://www.fsb.org/wp-content/uploads/P131020-1.pdf. See also Financial Stability Board: 
Enhancing Cross-border Payments: Stage 1 report to the G20 available 
at https://www.fsb.org/wp-content/uploads/P090420-1.pdf which 
discusses key frictions in cross-border payments.
    \16\ In February 2023, the Financial Stability Board published 
an updated and prioritized Roadmap centered on three priority 
themes, which includes the extension and alignment of the operating 
hours of key payment systems. Available at https://www.fsb.org/2023/02/g20-roadmap-for-enhancing-cross-border-payments-priority-actions-for-achieving-the-g20-targets/.
    \17\ See 59 FR 8981 (Feb. 24, 1994). Foreign exchange settlement 
risk is also commonly known as ``Herstatt risk.'' The name comes 
from an episode in which a German bank, the Herstatt Bank, was 
closed by its supervisor after the bank had received deutsche mark 
payments for foreign exchange transactions, but before it provided 
U.S. dollars to its counterparties in those transactions. Overlap in 
central bank services operating hours can mitigate foreign exchange 
settlement risk by providing an opportunity to shorten the time 
between the settlement of both legs of a foreign exchange 
transaction, including enabling simultaneous settlement.
    \18\ A number of central banks, such as those in Mexico and 
South Africa, have operated 24x7x365 large-value payment services 
for some time. Other central banks, including those in India and 
Switzerland, operate at near 24x7x365. In the United Kingdom, the 
Bank of England has announced that its next-generation large-value 
payment service will be capable of near 24x7x365 operations by 2024. 
The Bank of England will consider extending the operating hours of 
its large-value payment service in line with the industry's demand. 
See the Bank of England's Roadmap for Real-Time Gross Settlement 
service beyond 2024, available at https://www.bankofengland.co.uk/paper/2022/roadmap-for-real-time-gross-settlement-service-beyond-2024.
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    Also, the Federal Reserve recognizes that payment infrastructure 
needs to evolve to support commerce that is increasingly being 
conducted outside traditional business hours. Expanded hours for the 
Fedwire Funds Service and NSS alongside the FedNow Service would bring 
the benefits of near round-the-clock payments for large-value, 
wholesale payments, such as multi-million dollar business invoices, 
real estate transactions, and insurance payouts, ensuring that the 
evolution of commerce is supported across retail and wholesale 
infrastructures.\19\
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    \19\ The FedNow Service supports real-time, immediate end-to-end 
instant payments between end user senders and receivers, with 
immediate funds availability to receivers. The Fedwire Funds Service 
supports large-value payments that are either between banks only or 
intended for end-user receivers, with no immediate funds 
availability requirement for payments to end user receivers.
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C. Analysis of Options for Expanded Hours

    While 24x7x365 operating hours for the Fedwire Funds Service and 
NSS remains a possibility in the longer term, the Board recognizes that 
the shift to full round-the-clock operations, with no downtime in 
operations to complete end-of-day processing or implement system 
upgrades for large-value payment services, may pose challenges in the 
shorter term. The Board considered multiple alternatives to the 
proposed 22x7x365, including the addition of a short weekend window of 
operating hours on Saturday and/or Sunday; 22 hours per day, 6 days per 
week; 24 hours per day, 5 days per week; and 24x7x365 operating hours. 
Overall, the Board believes that expanding to 22x7x365 could achieve 
many of the benefits of 24x7x365 hours while giving the industry and 
Reserve Banks time to adjust technology and operations for potential 
future expansions of operating hours of the Fedwire Funds Service and 
NSS. Participation in expanded hours would be voluntary. The Board is 
proposing to extend the current 22x5 Fedwire Funds Service and NSS 
operating hours to 22x7x365 no sooner than two years after the 
implementation of the ISO 20022 message format for the Fedwire Funds 
Service, scheduled for March 2025. (See Section III for a further 
discussion on implementation considerations).
    A key reason for considering a 22x7x365 expansion of Fedwire Funds 
Service and NSS operating hours is a faster and less costly 
implementation than a full 24x7x365 expansion, which would help achieve 
the Board's safety and efficiency policy objectives for large-value 
payments in the nearer term. In addition, industry feedback to date 
underscored that investment in technical infrastructure modernization 
for participants to accommodate round-the-clock availability would pose 
challenges that could be reduced by a shorter move to 22x7x365 
operating hours.
    An expansion of Fedwire Funds Service and NSS operating hours to 
22x7x365 could also reduce costs and risks to the industry and the 
Federal Reserve relative to an expansion to 24x7x365 operations. For 
example, an expansion to 22x7x365 operating hours could allow 
participants to gradually adapt to seven-day operations for wholesale 
payments, which could reduce operational risks. Additionally, lessons 
learned from the expansion could be applied to the potential future 
development of full 24x7x365 operations for the Fedwire Funds Service 
and NSS.

D. Benefits, Costs, Risks, and Other Considerations

1. Benefits
    Expanding current Fedwire Funds Service and NSS operating hours 
from five to seven days per week, each day of the year, could improve 
the safety and efficiency of both domestic and global large-value U.S. 
dollar payments. Domestically, expanded hours could allow systemically 
important financial market utilities (FMUs) (that is, a large-value 
payment service, securities and derivatives clearinghouses, and 
securities settlement services) and retail payment arrangements (that 
is, check clearinghouses, an ACH network, and an instant payment 
service) that leverage the Fedwire Funds Service and/or NSS to have 
broader options for settlement of time-critical payments.\20\ 
Settlement outside of traditional windows could reduce credit risk in 
certain FMUs and retail payment arrangements by narrowing the time gap 
between the creation of payment obligations and the discharge of those 
obligations in final funds, thereby reducing the potential for 
spillover effects in the financial system from settlement disruptions. 
To the extent that FMUs and retail payment arrangements operate outside 
of traditional windows, these firms could have the option to receive or 
send funds in central bank money seven days per week, potentially 
improving their operational efficiency or reducing the build-up of 
credit risk on days when Fedwire Funds Service and NSS are not 
currently operating. Expanded hours might also spur new or enhanced 
private-sector payment solutions that leverage the Fedwire Funds 
Service and/or NSS, or enable financial market trading and lending 
activity that previously could not be supported during weekend 
hours.\21\ Finally, as noted above, expanded hours for the Fedwire 
Funds Service and NSS alongside the FedNow Service would bring the 
benefits of near round-the-clock payments for large-value consumer and 
business payments, such

[[Page 39617]]

as multi-million dollar business invoices, real estate transactions, 
and insurance payouts.
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    \20\ Currently, the FedNow Service provides liquidity management 
transfer capability for FedNow participants and participants in a 
private-sector instant payment service to transfer funds to support 
instant payment liquidity needs during certain hours including when 
the Fedwire Funds Service is closed. While the hours of liquidity 
management transfers in FedNow might be adjusted if Fedwire Funds 
Service hours are expanded, transfers would remain available during 
the two-hour Fedwire Funds Service closure.
    \21\ See the Committee on Payments and Market Infrastructures 
final report ``Extending and aligning operating hours for cross-
border payments,'' available at https://www.bis.org/cpmi/publ/d203.pdf.
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    Expanded hours would also facilitate greater overlap and reduced 
gaps between the operating hours of the Fedwire Funds Service/NSS and 
key large-value payment services in other jurisdictions. This overlap 
and reduction in gaps would support more efficient cross-border 
payments through faster settlement and improved liquidity management. 
For example, some industry feedback highlighted the value of Sunday 
operating hours to support payment flows in the Middle East and North 
Africa region. Increased overlap in operating hours could provide more 
opportunities to settle cross-currency payments simultaneously via new 
or existing payment-versus-payment mechanisms and arrangements, thereby 
reducing settlement risk and potentially allowing for greater 
transparency in global foreign exchange (FX) markets.\22\ Increased 
overlap and reduced gaps in operating hours could also speed up 
settlement of large-value corporate trade payments made through 
correspondent arrangements by reducing or eliminating the time gap 
between the U.S. leg of a payment and the leg of the payment in a 
foreign jurisdiction. Expanded operating hours would be consistent with 
the actions of other central banks, some of which have already 
undertaken an expansion of operating hours for their large-value 
payment services by targeting near or full 24x7x365 operations or by 
considering or positioning themselves for future expansion.\23\
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    \22\ As explored in the ``Committee on Payments and Market 
Infrastructures final report: Extending and aligning operating hours 
for cross-border payments'', expansion of large-value payment system 
operating hours would also add to the current global settlement 
window (i.e., the time period during which the largest number of 
large-value RTGS systems are simultaneously operating).
    \23\ See footnote 20 regarding Mexico, South Africa, India, 
Switzerland and the United Kingdom, for example.
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2. Costs and Risks
    The potential benefits of expanding Fedwire Funds Service and NSS 
operating hours to 22x7x365 need to be weighed against potential costs 
and risks. Expanded hours would require operational and technical 
changes that would impose costs on the Reserve Banks and on 
institutions that participate in the Fedwire Funds Service and NSS. The 
magnitude of costs would vary by institution. Some institutions have 
cited the potential for significant costs related to upgrades of legacy 
infrastructure, as well as increased staffing, to support expanded 
hours. Others have indicated that costs would be more incremental 
because their institutions could build on existing infrastructure that 
they use to support 24x7x365 instant payments. The Board is seeking 
comment on the cost burden to industry stakeholders of moving to 
22x7x365 operations, as well as costs related to potential 24x7x365 
operations in the future. Reserve Bank costs are discussed in Section 
3.a.
    In addition to the potential financial impact, extending current 
operating hours to every day of the year could generate additional 
risks to participants, the Reserve Banks, and the U.S. financial system 
more broadly.\24\ For example, transferring funds to meet potential 
rapid deposit outflows during weekends and holidays could exacerbate 
liquidity issues for a bank in crisis. This risk could have financial 
stability implications if large deposit outflows experienced by a 
single participant created contagion to other participants.
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    \24\ It is anticipated that not all participants may choose to 
participate in the expanded weekend hours at launch. Please see 
section III.B. for a discussion of optional participation in a 
22x7x365 operating environment of the Fedwire Funds Service and NSS.
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    The two-hour window between 7:00 p.m. and 9:00 p.m. ET on Saturday 
and Sunday under the Board's proposal to expanded hours would serve as 
a pause in transferring funds to meet deposit outflows.\25\ 
Participants experiencing outflows could potentially utilize this time 
period to implement liquidity and risk management measures to address 
outflows. The Board is seeking comments on the likelihood that 
expanding Fedwire Funds Service and NSS hours would exacerbate 
liquidity risks arising from deposit outflows, as well as any 
additional risk controls that would be needed during expanded hours. 
Relatedly, the Board recognizes that participants' ability to access 
funding during expanded weekend and holiday hours will be important and 
seeks comments on the potential benefits and costs of extending 
discount window operations.
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    \25\ See Section II.A. Proposal for the proposed operating hours 
on Saturday and Sunday.
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    Expanded operating hours could also potentially increase 
operational and financial risks to participants and the Reserve Banks 
by expanding the time during which cyber-attacks or other operational 
disruptions could take place. While these risks are not new to the 
financial sector, the Board is seeking to understand the industry's 
readiness to manage these types of risks on a near round-the-clock 
basis.
3. Other Policy Considerations
    The proposed expansion of operating hours to 22x7x365 would 
constitute major enhancements to the Fedwire Funds Service and NSS. 
Under longstanding Board policy, any potential new payment service or 
major enhancements to an existing service must meet the following 
criteria: (a) the Federal Reserve must expect to achieve full cost 
recovery of costs over the long run, (b) the Federal Reserve must 
expect that its providing the service will yield a clear public 
benefit, and (c) the service should be one that other providers alone 
cannot be expected to provide with reasonable effectiveness, scope, and 
equity.\26\ An analysis of these criteria is set forth below.
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    \26\ See Board of Governors of the Federal Reserve System, ``The 
Federal Reserve in the Payments System,'' (issued 1984; revised 
1990). Available at Federal Reserve Board--Policies: The Federal 
Reserve in the Payments System.
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a. Cost Recovery
    Section 11A of the Federal Reserve Act, as added by the Monetary 
Control Act of 1980, requires that fees for Federal Reserve Bank 
payment services be set in accordance with the principle that, over the 
long run, those fees recover the costs of providing the services.\27\ 
In addition, Board policy specifies that each major service category 
offered by the Federal Reserve must separately satisfy the cost 
recovery objective of the Monetary Control Act: in the long run, 
aggregate revenues should match costs.\28\
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    \27\ Specifically, section 11A provides that, ``[o]ver the long 
run, fees shall be established on the basis of all direct and 
indirect costs actually incurred in providing the Federal Reserve 
services priced, including interest on items credited prior to 
actual collection, overhead, and an allocation of imputed costs 
which takes into account the taxes that would have been paid and the 
return on capital that would have been provided had the services 
been furnished by a private business firm, except that the pricing 
principles shall give due regard to competitive factors and the 
provision of an adequate level of such services nationwide.'' 12 
U.S.C. 248a.
    \28\ See ``The Federal Reserve in the Payments System,'' supra 
note 28.
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    Initial analysis suggests that over the long run, the Reserve Banks 
would be able to recover the costs associated with the proposed 
22x7x365 expanded operating hours. Discussions with industry 
stakeholders about the need for expanded hours to support cross-border 
activity, innovative use cases, and additional settlement opportunities 
for systemically important and large-value transactions support the 
assumption that, over time, expanding Fedwire Funds Service and NSS 
hours would generate increases in volume and revenue. The Reserve Banks 
completed a cost estimate analysis that included

[[Page 39618]]

system changes and additional staffing during the weekends. The Reserve 
Banks expect these costs would be offset by increased revenue, subject 
to various factors such as the competitive and/or economic environment 
in future years, new product enhancement opportunities, and potential 
Fedwire Funds Service and NSS pricing changes. In addition, Reserve 
Bank operational costs may be lower for expanded hours due to 
efficiency gains that could arise from leveraging operations and 
customer support staff that are already in place for the FedNow 
Service. The Board will conduct a full analysis of long-term cost 
recovery impacts to the Fedwire Funds Service and NSS based on input 
received on the proposal.
b. Public Benefit
    The Board believes the expansion of operating hours for the Fedwire 
Funds Service and NSS could have several important safety and 
efficiency benefits. From a domestic perspective, expanded hours could 
reduce credit risk and improve safety in the financial system by 
narrowing the time gap between the creation of payment obligations and 
the discharge of those obligations in final funds, improve operational 
efficiency in FMUs and retail payment arrangements, and spur 
innovations in large-value payments such as weekend interbank lending 
markets. From an international perspective, expanded hours would 
increase overlap and reduce gaps between the operating hours of the 
Fedwire Funds Service and NSS and other key large-value real time gross 
settlement systems internationally and would support greater efficiency 
in cross-border payments. Please see previous section II.D.1. for a 
full discussion of potential benefits.
c. Other Providers
    Board policy also requires that for any new service or major 
service change, the service should be one that other providers alone 
cannot be expected to provide with reasonable effectiveness, scope, and 
equity.\29\ Today, to provide final settlement, the private-sector 
large-value payment service relies on the Fedwire Funds Service to 
support its settlement process. Thus, this service would likely not be 
able to effectively expand its operating hours without a similar 
expansion in the operating hours of the Fedwire Funds Service. In terms 
of scope and equity, today the Fedwire Funds Service and NSS are 
broadly accessible to eligible financial institutions across the 
country on equal terms.\30\ Thus, the Federal Reserve could offer 
financial institutions similarly broad access to expanded operating 
hours.
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    \29\ See ``The Federal Reserve in the Payments System,'' supra 
note 28.
    \30\ Depository institutions may access these services either 
directly (settling transactions in their Federal Reserve account) or 
indirectly (through another depository institution that acts as a 
correspondent bank for the institution).
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III. Implementation Considerations

    This section describes (A) the potential timeline for an expansion 
of the Fedwire Funds Service and NSS operating hours from 22x5 to 
22x7x365, and considerations that will inform the final timeline, (B) 
considerations for optional participation in a 22x7x365 operating 
environment, (C) other potential enhancements to the Fedwire Funds 
Service and NSS, and (D) the availability of the discount window.

A. Timeline for Proposal

    The implementation timeline for the expansion of operating hours to 
22x7x365 and potentially to 24x7x365 in the future will depend on many 
factors, including the operational and technical challenges to the 
Federal Reserve and participants of implementing and adopting potential 
operating hours expansions, industry preferences related to timing, 
demand for 22x7x365 and 24x7x365 operating hours among participants, 
and interdependencies with other developments in the payments 
landscape. Should the Board decide to proceed with the proposed 
expansion to 22x7x365, it will consider these and other factors before 
determining the final timeline.
    Based on initial industry outreach conducted after the 2022 Federal 
Register notice for the implementation of the ISO 20022 standard for 
the Fedwire Funds Service, there is broad consensus from stakeholders 
that expanding Fedwire Funds Service and NSS operating hours should not 
occur until after the implementation of the ISO 20022 standard for the 
Fedwire Funds Service scheduled for March 2025. Initial analysis 
suggests an expansion of Fedwire Funds Service and NSS operating hours 
to 22x7x365 could potentially be achieved no sooner than two years 
after the implementation of the ISO 20022 message format for the 
Fedwire Funds Service. As a result, if public comments in response to 
this notice indicate support for the proposed expansion to 22x7x365 
operating hours for the Fedwire Funds Service and NSS, the Federal 
Reserve would expand operating hours to 22x7x365 no sooner than 2027.
    In determining an implementation timeline for 22x7x365 operating 
hours, the Board will consider feedback received in response to this 
notice, including whether an interim step short of 22x7x365 would be 
desirable. Key feedback areas will include the extent to which 
participants would benefit from weekend operating hours for the Fedwire 
Funds Service and NSS being made available as soon as practicable, and 
the extent to which participants may need to adjust their staffing, 
internal systems, and processes to take advantage of weekend operating 
hours. Furthermore, the eventual timeline will also reflect 
interdependencies between the development and adoption of expanded 
operating hours for the Fedwire Funds Service and NSS and other 
initiatives.
    An expansion to full 24x7x365 operating hours for the Fedwire Funds 
Service and NSS is a possibility in the future. The Board is interested 
in collecting feedback from industry on constraints, preferences, and 
demand related to full 24x7x365 operating hours. If the Board does 
propose to expand operating hours further to 24x7x365, it would seek 
public comment in a separate proposal.

B. Considerations for Optional Participation in a 22x7x365 Operating 
Environment of the Fedwire Funds Service and NSS

    In alignment with current service terms and in response to industry 
feedback from smaller institutions, participation in proposed 22x7x365 
operating hours for the Fedwire Funds Service and NSS would be 
optional. Currently, a Fedwire Funds Service participant, for example, 
may decide not to be open to process payment orders sent to it over the 
Fedwire Funds Service during overnight hours. Similarly, an institution 
that participates in a private-sector clearing arrangement for which 
transactions are settled through NSS may be allowed under the rules of 
the clearing arrangement (i) not to send or receive transactions using 
the clearing arrangement during overnight hours (and thus not trigger 
any settlement obligations) or (ii) to instruct the agent for the NSS 
settlement arrangement not to include any debit or credit entries for 
the institution or other institutions for which it settles in any 
settlement files submitted to NSS during that time.\31\

[[Page 39619]]

The Board believes the optionality should be maintained during any 
expanded hours.
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    \31\ Only institutions that are settlers in an NSS settlement 
arrangement may settle debit or credit entries in an NSS settlement 
file. Settlers may settle debit or credit entries for their own 
account or on behalf of other institutions that participate in the 
private-sector clearing arrangement. Settlers must have their own 
master account.
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    If a participant chooses not to operate during some or all 
potential weekend and holiday operating hours of the Fedwire Funds 
Service, the participant might continue to receive payment orders 
through the Fedwire Funds Service, just as some participants today 
receive payment orders while they are not operating during overnight 
hours. If a participant chooses not to operate during the weekend or on 
a holiday, it would not be required to take action on any payment 
orders sent to it during those days if they are not funds-transfer 
business days for the participant. Alternatively, if a participant 
wishes to operate only during part of the weekend and holiday operating 
hours, it may set cutoff or closing times for its funds-transfer 
business day, after which it would not be required to take action on a 
payment order sent to it until its next funds-transfer business 
day.\32\ For NSS, if a participant does not settle transactions through 
the NSS settlement arrangement during weekend or holiday operating 
hours, it may be unable to send or receive transactions through the 
private-sector clearing arrangement during that time depending on the 
rules of the clearing arrangement.
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    \32\ See 12 CFR part 210, app. A, Sec.  4A-106, 4A-302(a)(1), 
4A-404.
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    Although optionality with respect to participation in a 22x7x365 
operating environment may allow some participants to avoid certain 
costs associated with an expansion in operating hours of the Fedwire 
Funds Service and NSS, it may also present certain challenges. For 
example, a participant that chooses not to operate (that is, send 
payments), but continues to receive payments in its master account 
during certain Fedwire Funds Service operating hours, could become a 
source of trapped liquidity, which could lead to the participant's 
counterparties implementing liquidity management measures such as 
restricting payments to the participant while they are offline.\33\ 
Further, such optionality could, over time, hinder broad adoption of 
expanded hours across the participant base, which could limit the full 
benefits of 22x7x365 Fedwire Funds Service and NSS. Notwithstanding 
these considerations, the Board is not contemplating a change to the 
participation model for Fedwire Funds Service and NSS.
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    \33\ However, participants face this same challenge in the 
current operating environment of the Fedwire Funds Service and NSS, 
which provides similar optionality in participation.
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C. Potential Other Enhancements to Fedwire Funds Service and NSS

    While this notice focuses on the proposal to expand operating hours 
to 22x7x365, the Board recognizes there may be other enhancements to 
the Fedwire Funds Service and NSS that could be considered in the 
context of or in addition to expanded hours. For example, the 
possibility of a new participant directory feature that potentially 
provides a listing of participants open for transactions and at which 
times has been raised by participants. Other potential service 
enhancements center around further access to information, such as the 
improved ability for institutions to track payments from sender to 
beneficiary, and application programming interfaces (APIs) to access 
payments-related data. In addition, some institutions have raised the 
possibility of improved fraud controls or screening capabilities. 
Finally, a significant undertaking could entail the addition of a 
liquidity savings mechanism for the Fedwire Funds Service.\34\ The 
Board is seeking to understand such functionality considerations and 
others, including the priority institutions place on their development, 
particularly in relation to expanding operating hours.
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    \34\ A liquidity savings mechanism can be defined as a queuing 
arrangement for payments, which conditions the release of queued 
payments on the receipt of offsetting or partially offsetting 
payments, and as a result economizes on the use of participants' 
cash balances.
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D. Availability of the Discount Window

    The Board recognizes banks' ability to access funding during 
expanded weekend and holiday hours will be important and seeks comments 
on the need for discount window operations to support expanded 
hours.\35\ The Board stated in its 2019 notice related to the 
development of the FedNow Service that the Federal Reserve would 
conduct analysis on extending discount window operations to make 
overnight credit available on weekends and holidays. Subsequently, in 
its 2020 notice announcing the details of the FedNow Service, the Board 
noted that the need for overnight credit on weekend and holidays was 
expected to be limited initially, and the hours during which discount 
window loans could be originated would remain unchanged.\36\ This 
perspective was influenced by the expected low volumes for a new 
service as well as by the lower dollar value of FedNow Service 
transactions.
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    \35\ Discount window office hours vary by district, but 
typically begin at 8:00 or 8:30 a.m. local time and end when the 
Fedwire Funds Service closes at 7:00 p.m. ET.
    \36\ See 85 FR 48522 (August 11, 2020) Liquidity management 
transfer functionality was included as a core part of the FedNow 
Service at the time of its launch.
---------------------------------------------------------------------------

    The Board recognizes that the combination of the FedNow Service 
maturing in the coming years and the Board's proposal to expand Fedwire 
Funds Service and NSS operating hours, with limits of one penny less 
than $10 billion per payment order and one penny less than $10 trillion 
per settlement file, respectively, will increase the importance of 
accessing liquidity on weekends and holidays. The Board is seeking 
comment on the potential demand for liquidity via the discount window 
during expanded hours for the Fedwire Funds Service and NSS and whether 
its availability during certain defined hours on weekends and holidays 
would affect industry views on expanded hours.

IV. Expanded Hours Impact on the Payment System Risk Policy (PSR 
Policy)

    Part II of the PSR policy governs the provision of intraday credit 
(also known as daylight overdrafts) to institutions with accounts at 
the Reserve Banks and outlines the methods that Reserve Banks use to 
control credit risk associated with providing intraday credit.\37\ 
Intraday credit supports the smooth functioning of the payment system 
by supplying temporary liquidity in order to cover shortages in 
institutions' account that can result when the timing of payment 
inflows and outflows are not balanced. To be eligible for intraday 
credit, the PSR policy requires that an institution be ``financially 
healthy'' and have regular access to the discount window. Reserve Banks 
monitor financial and supervisory developments to determine an 
institution's eligibility for intraday credit and have several tools to 
control credit risk to Reserve Banks, including caps on intraday 
credit, incentivizing or in some cases requiring collateral, and the 
ability to monitor the institution's account balance in real time and 
reject Fedwire Funds Service or NSS transactions.
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    \37\ The PSR policy is available at https://www.federalreserve.gov/paymentsystems/psr_about.htm.
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    The PSR policy allows for access to intraday credit up to 24x7x365. 
Therefore, if the Federal Reserve expands the operating hours of the 
Fedwire Funds Service and NSS, those institutions eligible to access 
intraday credit and electing to use the services would have access to 
intraday credit during the expanded hours. Reserve

[[Page 39620]]

Banks would continue to use the same general framework to monitor 
institutions and control credit risk as they use in the current 
operating environment. Further, if the Federal Reserve expands Fedwire 
Funds Service and NSS hours, the Board would continue to expect that 
institutions manage their master accounts in compliance with the 
Board's Payment System Risk Policy and other Federal Reserve policies, 
including to avoid overnight overdrafts.\38\
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    \38\ To minimize Reserve Bank exposure to overnight overdrafts, 
the Board charges a penalty fee to discourage institutions from 
incurring overnight overdrafts. See part III of the PSR policy. An 
institution would incur an overnight overdraft on each calendar day 
that its account balance is negative at 7:00 p.m. ET, which is the 
close of the business day. All institutions, regardless of the 
Reserve Bank payment services that they use, will incur an overnight 
overdraft penalty charge for each calendar day, including weekends 
and holidays, that an overnight overdraft is outstanding.
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    If the Board finalizes this proposal to expand operating hours for 
the Fedwire Funds Service and NSS, it would also make any necessary 
updates to existing policies as well, including the PSR policy.

V. Exclusion of the Fedwire Securities Service

    At this time, the Board is not considering expanding operating 
hours for the Fedwire Securities Service.\39\ The Board does not expect 
the proposed expansion of Fedwire Funds Service and NSS operating hours 
to create significant changes in secured lending, derivatives markets, 
or other market activity that would necessitate expanded operating 
hours for the Fedwire Securities Service in the near term. In part, 
this is because the aggregate value of transfers during current off-
hours for the large-value payment services will likely be relatively 
low at the outset and thus unlikely to result in increased demand for 
securities transfers during those hours. It is possible that expanded 
hours for the Fedwire Funds Service and NSS could influence markets in 
the longer-term, which could in turn increase demand for the Fedwire 
Securities Service during current off-hours.
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    \39\ The Fedwire Securities Service is currently open for 
transfers between participants from 8:30 a.m. ET until 3:30 p.m. ET 
Monday through Friday, excluding holidays observed by the Reserve 
Banks. In addition, Fedwire Securities Service participants may 
reposition securities between their own securities accounts from 
8:30 a.m. ET until 7:00 p.m. ET on those same weekdays.
---------------------------------------------------------------------------

    The Board understands that expanding operating hours for the 
Fedwire Securities Service will require greater study and coordination 
with other FMUs, services, and institutions that are typically open 
alongside the service, such as securities pricing services and 
repurchase agreement service providers. The Board will continue to 
monitor activity in securities markets and seek feedback from 
institutions to determine whether to pursue in the future an expansion 
of Fedwire Securities Service operating hours.

VI. Competitive Impact Analysis

    Board policy requires that the Board conduct a competitive impact 
analysis when considering changes to a service. The policy requires the 
Board to first determine whether there will be a direct and material 
adverse effect on the ability of other service providers to compete 
effectively with the Federal Reserve in providing similar services and 
then, if such an adverse effect is identified, to determine if that 
effect is due to differing legal powers or the Federal Reserve's 
dominant market position deriving from such legal differences. Next, if 
such legal differences exist, then the proposed change would be further 
evaluated to assess its benefits and the proposal could be 
modified.\40\
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    \40\ See The Federal Reserve in the Payments System (issued 
1984; revised 1990), Federal Reserve Regulatory Service 9-1558. The 
policy states, ``The Board will also conduct a competitive impact 
analysis when considering an operational or legal change, such as a 
change to a price or service, or a change to Regulation J, if that 
change would have a direct and material adverse effect on the 
ability of other service providers to compete effectively with the 
Federal Reserve in providing similar services due to differing legal 
powers or constraints or due to a dominant market position of the 
Federal Reserve deriving from such legal differences. All 
operational or legal changes having a substantial effect on 
payments-system participants will be subject to a competitive-impact 
analysis, even if competitive effects are not apparent on the face 
of the proposal. In conducting the competitive-impact analysis, the 
Board would first determine whether the proposal has a direct and 
material adverse effect on the ability of other service providers to 
compete effectively with the Federal Reserve in providing similar 
services. Second, if such an adverse effect on the ability to 
compete is identified, the Board would then ascertain whether the 
adverse effect was due to legal differences or due to a dominant 
market position deriving from such legal differences. Third, if it 
is determined that legal differences or a dominant market position 
deriving from such legal differences exist, then the proposed change 
would be further evaluated to assess its benefits, such as 
contributing to payments-system efficiency or integrity or other 
Board objectives, and to determine whether the proposal's objectives 
could be reasonably achieved with a lesser or no adverse competitive 
impact. Fourth, the Board would then either modify the proposal to 
lessen or eliminate the adverse impact on competitors' ability to 
compete or determine that the payments-system objectives may not be 
reasonably achieved if the proposal were modified. If reasonable 
modifications would not mitigate the adverse effect, the Board would 
then determine whether the anticipated benefits were significant 
enough to proceed with the change even though it may adversely 
affect the ability of other service providers to compete with the 
Federal Reserve in that service.''
---------------------------------------------------------------------------

    The Board believes that an expansion of Fedwire Funds Service and 
NSS operating hours would not have a direct and material adverse effect 
on the ability of other service providers to compete effectively with 
the Federal Reserve. In particular, the Federal Reserve provides the 
only large-value payment services in the United States that allow 
settlement in central bank money. The main private-sector provider of 
large-value payment services and a number of depository institutions 
offered comments on a previous Federal Register notice noting that they 
would benefit from an expansion of Fedwire Funds Service operating 
hours.\41\ These organizations indicated that an expansion of Fedwire 
Funds Service operating hours would improve efficiency and reduce risk 
in conducting U.S. dollar payments and settlements and would support 
private-sector payments efforts in the United States. For instance, 
expanding Fedwire Funds Service operating hours could improve liquidity 
risk management for payment systems that rely on the Fedwire Funds 
Service for prefunding (for example, a private-sector instant payment 
service, a large-value payment service, and a foreign exchange 
settlement system). Accordingly, an expansion of Fedwire Funds Service 
and NSS operating hours is not expected to adversely impact any other 
service provider that competes with Federal Reserve payment services 
and could instead support their efficiency and resilience.
---------------------------------------------------------------------------

    \41\ See comment letters submitted to the ``Potential Federal 
Reserve Actions to Support Interbank Settlement of Faster Payments, 
Request for Comment,'' 83 FR 57351.
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VII. Request for Comment

    The Board requests public comment on the entire proposal, and 
specifically on the following questions:
    1. What are the primary benefits to the banking industry, financial 
markets, and broader economy from an expansion to 22x7x365 Fedwire 
Funds Service and NSS operating hours? What are the primary benefits to 
your institution?
    2. What will be the primary sources of demand for expanded hours 
for the Fedwire Funds Service and NSS, from 22x5 to 22x7x365? What 
types of transactions or institutions are most likely to generate 
demand for the ability to make payments during weekend hours? What 
additional use cases could be satisfied with the expansion to full 
24x7x365 operating hours? Would they represent sources of new and 
additional volume that could flow over the Fedwire Funds Service, a 
shift of

[[Page 39621]]

existing volume over the service, or both?
    3. How might expanded operating hours of the Fedwire Funds Service 
and NSS support private-sector innovation?
    4. How does the existence of the FedNow Service affect your views 
of the benefits of expanded hours for the Fedwire Funds Service and 
NSS? How do you anticipate using these services in the future?
    5. Do you prefer an interim expansion of operating hours before 
moving to 22x7x365? If so, what operating hours for the Fedwire Funds 
Service and NSS would be most useful for your institution? What 
considerations factor into your preference?
    6. What is your preferred timeline for a potential expansion of 
Fedwire Funds Service and NSS operating hours to 22x7x365? What 
considerations factor into your preference (for example, demand, time 
to implement changes, adjustments to staffing and internal systems, 
other major industry milestones or payment system improvements)?
    7. Are you interested in full 24x7x365 operating hours for Fedwire 
Funds Service and NSS? If so, what is your preferred time frame for 
such an expansion of operating hours? What considerations factor into 
your preference?
    8. What costs and risks would arise for the banking industry, 
financial markets, and broader economy from an expansion to 22x7x365 of 
Fedwire Funds Service and NSS operating hours? What are the costs and 
risks to your institution? What is the estimated incremental cost on a 
percentage basis to support 22x7x365 operating hours for the Fedwire 
Funds Service and NSS? What are the implications for competitiveness?
    9. What are the ways in which benefits, costs, or risks of 22x7x365 
Fedwire Funds Service and NSS could vary for different types of market 
participants (for example, for smaller institutions, non-traditional 
participants, or participants in particular time zones)?
    10. Are there infrastructure-related market conditions or barriers 
(for example, the availability of short-term funding markets over the 
weekend) that may prevent or reduce your firm's ability to fully 
achieve the potential benefits of 22x7x365 operating hours for the 
Fedwire Funds Service and NSS? If so, what are they? What steps might 
the industry and/or Federal Reserve take to remove such barriers?
    11. The Federal Reserve plans to maintain the ability to opt out of 
expanded hours. How would the optionality with respect to participating 
in a 22x7x365 operating hours environment of the Fedwire Funds Service 
and NSS, as described in this notice, benefit or challenge your 
institution or the broader industry? What steps might the Federal 
Reserve take to augment potential benefits? What steps might the 
Federal Reserve take to mitigate potential costs and risks?
    12. How does your institution anticipate managing liquidity needs 
in an expanded hours environment? Is the availability of discount 
window loan originations on weekends and holidays a prerequisite for 
expanded operating hours for the Fedwire Funds Service and NSS? If so, 
should the discount window be available 22x7x365, or alternatively, 
during certain defined hours on weekends and holidays? During what 
hours should discount window loan originations be available?
    13. What effects, if any, on funding market activity should be 
taken into account when considering the expansion of operating hours 
for the Fedwire Funds Service and NSS? Would the expansion of operating 
hours for the Fedwire Funds Service and NSS affect existing wholesale 
funding markets, including the repurchase market? Do you expect 
wholesale funding market activity to occur on weekends and holidays?
    14. Describe any other enhancements or initiatives that the Reserve 
Banks should consider in addition to, or in the context of, expanded 
hours for the Fedwire Funds Service and NSS. How would such potential 
enhancements be used in the context of expanded hours? Are there any 
potential service enhancements that should be prioritized ahead of 
expanded hours?
    15. Please describe any other consideration that you believe should 
be taken into account as the Board contemplates expansion of operating 
hours for the Fedwire Funds Service and NSS.

    By order of the Board of Governors of the Federal Reserve 
System.
Ann E. Misback,
Secretary of the Board.
[FR Doc. 2024-10117 Filed 5-8-24; 8:45 am]
BILLING CODE 6210-01-P