FRB Approves Amendments Governing the FedNow℠ Interbank Settlement Service
The Federal Reserve Board approved rule amendments governing funds transfers through FRB's new FedNow℠ interbank settlement service.
The amendments to Regulation J ("Collection of Checks and Other Items by Federal Reserve Banks and Funds Transfers through Fedwire") include:
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establishing the new 24x7x365 real-time gross FedNow℠ settlement service regulations in a new Subpart C;
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specifying changes to Subpart B which allow a second funds transfer option in addition to the Fedwire Funds Service; and
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making technical corrections to Subpart A governing the FRB check service.
The FRB adopted the final rule to provide legal certainty around rights and obligations to parties to a transfer through FedNow℠.
The FedNow℠ Service is expected to be available in 2023. The final rule will apply to all depository institutions choosing to participate in FedNow℠ regardless of their size. The rule will become effective on the first calendar quarter following publication in the Federal Register.