The Reserve Bank has determined that the policy needed several changes to provide more information about eligibility requirements and the application process that applicants needed to meet.

The changes are to ensure that the policy continues to promote competition in the payment services market by providing access for non-ADI entities whose applications are successful.

These changes have been spurned on by developments in technology that have allowed a wider range of fintech entities to compete directly with incumbents in the payments system.

The last revision to the policy was over 20 years ago in 1999 when it was liberalised to allow non-ADI providers of third-party payment services to apply for an ESA to settle clearing obligations.

The updated policy now requires any Australian securities settlement facility deemed to be systemically important in Australia to use an ESA.

Securities settlement facilities that face Australian dollar liquidity risk from their settlement-related activities must also use an ESA.

This was already a requirement for systemically important central counterparties and the purpose of the change is to address risks that could be transmitted to the financial system from the operation of these facilities.

Australian-licensed clearing and settlement facilities may apply for an exemption from the requirement to maintain management and resources in Australia to be able to manage their ESA from an approved offshore location.

This eligibility will be determined on a case-by-case basis.