National Settlement Service Business Continuity Guide
Difficulty Accessing or Using the National Settlement Service
The National Settlement Service (NSS) is a multilateral settlement service owned and operated by the Federal Reserve Banks. NSS is offered to depository institutions with Federal Reserve Bank master accounts that settle for themselves and/or for other participants in clearinghouses, financial exchanges and other clearing and settlement arrangements. A settlement agent, acting on behalf of the depository institutions that settle for themselves and/or for other participants in a settlement arrangement, submits to the processing Federal Reserve Bank settlement files that list debit and credit entries to be made to the depository institutions’ master accounts. The processing Federal Reserve Bank processes timely settlement files that meet Federal Reserve Bank requirements. Settlers benefit because the credits to their master accounts are final and irrevocable.
The Federal Reserve Banks have a number of procedures in place to ensure the resilience of NSS, including out-of-region backup facilities for the applications and all integral support and related functions. The Federal Reserve Banks routinely test NSS business continuity procedures across a variety of contingency situations, including unavailability of facilities, hardware, network, or staff, to ensure timely resumption of NSS operations in the event of a local, regional, or widespread disruption. Furthermore, the NSS applications and associated recovery procedures are regularly enhanced and tested to address emerging risk scenarios, such as those that might occur during a pandemic.
This guide is intended to help settlement agents prepare for and respond to NSS service disruptions and regional/local disruptions to their operations.
How You Should Prepare
- Bookmark the Service Status page and refer to it regularly for current operational status and instructions from the Federal Reserve Banks.
- Practice your business continuity plans and reconciliation procedures in the Depository Institution Testing (DIT) environment.
- Discuss with the Central Services Support Staff (CSSS) potential use of the NSS offline service should you need to leverage the offline service as a contingency option of last resort.
- Maintain a current NSS 04 Agent Contact Information Form, which lists the contact information (primary telephone number, fax number, and email address) for a settlement agent’s authorized individuals, on file with the Central Services Support Staff (CSSS). The individuals listed on this form are authorized as contacts for the settlement agent for all NSS-related operational matters relating to the settlement agent and its settlement arrangements.
- Ensure your End User Authorization Contacts (EUACs) have the ability to use the FedLine® Home My Messages secure inbox to receive emails from the Federal Reserve Banks.
- Coordinate with an EUAC from your institution to access the FedLine Advantage® Contingency Guide for Wholesale Services, which is available in the EUAC Center.
- Settlement agents using the FedLine Direct® Solution should:
- Participate in contingency tests to assess your ability to resume processing following a National Settlement Service recovery simulation.
- Establish a FedLine Advantage connection as a backup to enable and test the FedPayments® Manager – NSS application.
What You Should Do During the Disruption
If your institution is experiencing any issues with the National Settlement Service, including difficulty accessing the Service or sending settlement files:
- Review your internal systems for anything that may be causing these issues.
- Check for any operational status updates and information regarding service disruptions distributed by the Federal Reserve Banks:
- Refer to the Service Status page for current operational status updates and other instructions. Status updates posted to the Service Status page may contain advice regarding actions to take during a service disruption.
- The Federal Reserve Banks may also distribute service status updates and advice on actions to take during a service disruption via posts on FedLine® Home and emails sent to EUACs.
- Any issues or questions that are not addressed by these updates should be directed to the Customer Contact Center or the Central Services Support Staff (CSSS).
- Notify all pertinent personnel at your institution about the issues you are experiencing and any service disruption, according to your specific crisis communication escalation procedures.
- You may want to consider using alternative arrangements to submit settlement files. It is critical that you reconcile files you believe you had sent to the point of disruption before you submit additional files to NSS.
- Settlement agents with FedLine Direct® access to NSS that also have online access through the FedLine Advantage® Solution may be able to use FedLine Advantage to submit settlement files.
- Depending on the nature of the disruption, the NSS offline service may be available to process settlement files. Note that the Federal Reserve Banks have limited capacity to process offline settlement files, and the NSS offline service is not designed or intended to support a broad-based service disruption. As a result, while the Federal Reserve Banks use best efforts to process offline settlement file submissions, there is no guarantee that an offline settlement file, in particular one that is submitted late in the operating day or that contains a large number of entries, will be accepted for processing. Only those persons identified as authorized individuals on your institution’s NSS 04 Agent Contact Information Form may submit offline settlement files on your institution’s behalf.
- If you require an extension to the normal National Settlement Service operating hours and you meet the criteria set forth in the Fedwire Services and National Settlement Service Extension Guidelines, please contact the extension request line as noted in the guidelines. The Federal Reserve Banks will communicate any extensions via the Service Status page.
- General questions regarding a service disruption may be directed to the Customer Contact Center. For specific questions about NSS, please contact the Central Services Support Staff (CSSS).
Other Contingency Events Impacting Your Business Operations
Many NSS settlement agents and financial institutions have survived severe regional weather events with minimal to no impact on their day-to-day operations thanks to careful business continuity planning. NSS settlement agents and financial institutions should develop, test, and execute their own contingency and recovery plans to ensure the resilience of their operations in a crisis situation. Whether your plan is as complex as establishing a geographically diverse data center, or as simple as having an evacuation packet with essential items your staff may need to reconstitute operations at an alternate site, planning and preparedness will help reduce the operational impact from unexpected weather or processing challenges.
What You Should Do During the Contingency Event
- Take Your Evacuation Package: If relocation is necessary, this packet should contain valuable materials to help you quickly re-establish NSS operations from an alternate site.
- Implement Your Contingency Procedures: Determine which contingency arrangement applies to the specific event and implement it. For example:
- Transition to your out-of-region data center and/or your contingency connection (e.g., FedLine Advantage Solution).
- Authorized individuals may be able to use the NSS offline service to manually process a small number of NSS entries in the event other alternate access channels are inaccessible.
- Contact Your Wholesale Operations Site: Alert the Central Services Support Staff (CSSS) that you are in a contingency situation. The Wholesale Operations Site can help you work through your NSS processing options.
- Review NSS Extension Guidelines: Ensure authorized individuals are aware of the NSS operating hours and extension guidelines.