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The Federal Reserve Board on Monday requested comment on a proposal to expand the operating hours for the on-line Fedwire® Funds Service.
Under the proposal, the Fedwire Funds Service would open three and one-half hours earlier than the current opening time of 12:30 a.m. eastern time (ET). The closing time for the service would remain unchanged at 6:30 p.m. ET. The earlier opening time is expected to further the smooth functioning and continued development of the payments system, as well as to improve efficiency and reduce risk in making payments and settlements. The Fedwire Funds Service is a real-time, large-value electronic funds transfer service, which is provided by the Federal Reserve Banks. Depository institutions and other authorized participants use this service to send and receive large-value, time-critical payments. Each payment transaction is settled individually in central bank money and is final and irrevocable once processed. Depository institutions and other Fedwire users would participate in the expanded operating hours on a voluntary basis. However, Fedwire users that choose not to participate in the earlier hours would still receive any incoming payment transactions sent from participating institutions during the expanded hours. If the proposal is adopted, the suggested timeframe for full implementation of the expanded operating hours is the second quarter of 2004. The Board invites commenters' views on the proposed opening time of 9:00 p.m. ET and on the business, market, risk management, and operational issues that should be considered in evaluating the benefits and drawbacks of a longer Fedwire day. Comment on the proposal is requested within seventy-five days of publication in the Federal Register, which is expected shortly.
The Board's notice is attached.
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