June 24, 1997

NET SETTLEMENT PAYMENT SERVICES:
PROPOSED SERVICE ENHANCEMENT

To All Depository Institutions
in the Twelfth Federal Reserve District

Request for Comment on Proposed Service Enhancement (Docket R-0974)

The Federal Reserve Board has requested comment on a proposal that the Federal Reserve Banks offer an enhanced net settlement service to depository institutions. The proposed service would combine and improve selected features from the Reserve Banks' existing net settlement services.

Comment is requested by August 11, l997.

The proposed enhancement would create a fully automated Federal Reserve Bank net settlement service through which participants in clearing arrangements would receive same-day finality of settlement intraday.

The service would facilitate improvements in the operational efficiency of clearing arrangements by providing the settling participants in such arrangements with an on-line mechanism to submit an electronic file of settlement information to the Federal Reserve.

Besides providing operational improvements, the enhanced service is intended to facilitate a reduction in the duration of settlement risk for private-sector clearing arrangements.

Copies

Copies of the Board's notice (Docket R-0974) are available from our Corporate Services Department. To request copies to be sent via mail, please call (415) 974-2748. To request copies to be sent via fax, please call (415) 974-3333, and specify document number 4161.

Additional Information

For additional information regarding the Federal Reserve Net Settlement Payment Services, please contact our Credit and Risk Management Department, at (415) 974-3021.

FEDERAL RESERVE BANK OF SAN FRANCISCO