The International Monetary Fund (IMF) released the findings of its assessment on Morocco's payment systems in a 2003 report, in which it indicates that in 2002, at the time of the assessment, there were no payment systems in Morocco that met the Committee on Payment and Settlement Systems definition for systemically important payment systems (SIPS). However, the IMF did assess the overall legal environment for payment systems in Morocco, and the functioning of the Moroccan Interbank Remote Clearing System (SIMT), which became operational in June 2002. The IMF's 2003 report concludes that there were significant deficiencies in terms of the technical and legal aspects of the payment system structure; risks were not clearly defined to participants; and the Central Bank of Morocco's (Bank Al-Maghrib, or BAM) roles and responsibilities over the payment systems were not clearly identifiable. However, a later report by the World Bank in 2005 mentions Morocco's reform process and its goal to reform the institutional and legal framework governing electronic payment instruments and clearing and settlement systems. Another report, by A. Tahari et al. in 2007 mentions that the new real-time gross settlement system, called the Système des Règlements Bruts du Maroc (Moroccan Gross Settlement System, or SRBM),was launched in 2006 and reduces the risk and time on settlements, thus ensuring the security of transactions. Nonetheless, there is insufficient information publicly available as to Morocco's actual compliance with the Core Principles for Systemically Important Payment Systems.

General Overview

According to the International Monetary Fund's (IMF) 2003 Financial Systems Stability Assessment, Morocco did not have any program in place that met the definition of a systemically important payment system (SIPS). The report identified significant deficiencies in terms of the technical and legal aspects of the existing payment system structure, noting that risks were not clearly defined to participants. Moreover, according to the 2003 IMF report, the Central Bank of Morocco's (Bank Al-Maghrib, or BAM) roles and responsibilities over payment systems were not clearly identifiable.

The IMF's 2003 assessment reviewed the Moroccan Interbank Remote Clearing System (Systeme Interbancaire Marocain de Telecompensation, or SIMT), which wasn't operational as of May 2002 (it became operational only in February 2003). The report also mentioned the Interbank Electronic Payments Center (CMI), which was scheduled to become operational during the first half of 2003. However, the IMF assessors did not consider either of these systems to qualify as SIPS.

The World Bank's 2005 report mentions that it is funding a project in Morocco to develop the country's financial sector. The report notes that the BAM is taking steps to improve the payment systems namely: "upgrading the institutional and legal framework governing electronic payment instruments, and clearing and settlement systems; improving the functioning of payment clearing systems and card operations regarding low value payments; widening access of payment services to banks and financial institutions' clients; and mitigating systemic risks regarding settlement of large-value financial transactions" (pp. 7-8). The World Bank report also indicates that, in 2005, the Moroccan authorities were in the process of implementing these measures through the development of a real-time gross settlement (RTGS) system that was expected to become operational in 2006. According to a 2007 report by the BAM, a RTGS system called the Système des Règlements Bruts du Maroc (Moroccan Gross Settlement System, or SRBM) was launched in 2006. According to a 2007 paper by A. Tahari et al., the SRBM is expected to "reduce the settlement risk on transactions, ensure their security, shorten the lag time for fund transfers, and facilitate the implementation of monetary policy" (pp. 23-24).

The Principles

I. The system should have a well-founded legal basis under all relevant jurisdictions.

II

According to the IMF's 2003 assessment, there were significant deficiencies in terms of the technical and legal aspects of Morocco's payment system structure as of 2002. Furthermore, the report indicated that, at the time, the BAM's roles and responsibilities in payment systems were not clearly identifiable. Subsequently, Morocco received funding from the World Bank to initiate a Financial Sector Development program by which, with World Bank assistance, Morocco would upgrade the institutional and legal framework that applied to electronic payment instruments, and clearing and settlement systems. Moreover, according to a 2007 report by the BAM, a RTGS system called the Système des Règlements Bruts du Maroc (SRBM) was launched in 2006. However, there is currently insufficient information publicly available as to this systems compliance with this Principle.

II. The system's rules and procedures should enable participants to have a clear understanding of the system’s impact on each of the financial risks they incur through participation in it.

II

According to the International Monetary Fund's (IMF) 2003 assessment of the payments system in Morocco as of 2002, risks were not clearly defined to participants. Furthermore, the report indicated that the BAM's roles and responsibilities in payment systems were not clearly identifiable. However, over recent years Morocco has undertaken significant financial sector reforms with the help of funding from the World Bank and a 2007 BAM report announced that, in 2006, Moroccan Gross Settlement System or SRBM was launched. Nonetheless, there is insufficient information publicly available as to this systems compliance with this Principle.

III. The system should have clearly defined procedures for the management of credit risks and liquidity risks, which specify the respective responsibilities of the system operator and the participants and which provide appropriate incentives to manage and contain those risks.

II

Refer to Principle II.

IV. The system should provide prompt final settlement on the day of value, preferably during the day and at a minimum at the end of the day. (Systems should seek to exceed the minima included in this Core Principle.)

II

According to a 2007 report by the BAM, a RTGS system, the SRBM, was launched in 2006. However, there is insufficient information publicly available as to this systems compliance with this Principle.

V. A system in which multilateral netting takes place should, at a minimum, be capable of ensuring the timely completion of daily settlements in the event of an inability to settle by the participant with the largest single settlement obligation. (Systems should seek to exceed the minima included in this Core Principle.)

II

The IMF's 2003 assessment found that the conditions of some Moroccan banks warranted further protection, in light of the risks involved. The IMF recommended that Morocco implement proper protection mechanisms. However, as of 2006, the Moroccan RTGS system, SRBM, was put in place. Furthermore according a 2007 paper by A. Tahari, et al., the SRBM is expected to "reduce the settlement risk on transactions, ensure their security, shorten the lag time for fund transfers and facilitate the implementation of monetary policy" (pp. 23-24). However, there is little information publicly available regarding this new system's compliance with this Principle.

VI. Assets used for settlement should preferably be a claim on the central bank; where other assets are used, they should carry little or no credit risk and little or no liquidity risk.

II

There is insufficient information publicly available as to Morocco's compliance with this principle.

VII. The system should ensure a high degree of security and operational reliability and should have contingency arrangements for timely completion of daily processing.

II

The BAM's 2007 Annual Report indicates that a RTGS system called the SRBM was launched in 2006 and, according to a 2007 paper by A. Tahari et al., the SRBM is expected to "reduce the settlement risk on transactions, ensure their security, shorten the lag time for fund transfers and facilitate the implementation of monetary policy" (pp. 23-24). Nonetheless there is insufficient information publicly available as to Morocco's compliance with this principle.

VIII. The system should provide a means of making payments which is practical for its users and efficient for the economy.

II

There is insufficient information publicly available as to Morocco's compliance with this principle.

IX. The system should have objective and publicly disclosed criteria for participation, which permit fair and open access.

II

There is insufficient information publicly available as to Morocco's compliance with this principle.

X. The system's governance arrangements should be effective, accountable and transparent.

II

There is insufficient information publicly available as to Morocco's compliance with this principle.

A. The central bank should define clearly its payment system objectives and should disclose publicly its role and major policies with respect to systemically important payment systems.

II

According to the IMF's 2003 report "there is no explicit mention of overall surveillance of payment systems, and in practice the BAM performs only operational functions (functioning of the clearing houses and settlement system)" (p. 58). However, the Moroccan authorities, with funding from the World Bank, have taken steps to improve the payment systems' structure in Morocco. The goal, according to the World Bank report of 2005, is to upgrade the institutional and legal framework governing electronic payment instruments, and clearing and settlement systems. Nonetheless, there is insufficient information publicly available as to Morocco's compliance with this principle.

B. The central bank should ensure that the systems it operates comply with the Core Principles.

II

There is insufficient information publicly available as to Morocco's compliance with this principle.

C. The central bank should oversee compliance with the Core Principles by systems it does not operate and it should have the ability to carry out this oversight.

II

There is insufficient information publicly available as to Morocco's compliance with this principle.

D. The central bank, in promoting payment system safety and efficiency through the Core Principles, should cooperate with other central banks and with any other relevant domestic or foreign authorities.

II

The IMF, in its 2003 assessment, recommends that there be "greater consultation and coordination between the BAM and financial institutions on the modernization of the payment systems as a whole" (p. 61). The IMF also recommends the establishment of a National Payment Council with strategic guidelines. However, there is insufficient information publicly available as to Morocco's compliance with this principle.