## Financial and Payments Systems Task Team (FITT) — Inaugural Meeting (June 10, 2020)

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**Canonical URL:** [Financial and Payments Systems Task Team (FITT) — Inaugural Meeting (June 10, 2020)](https://www.imf.org/-/media/files/data/statistics/bpm6/fitt/fitt-inaugural-meeting-presentaion-imf-cochair.pdf)

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### Overview
- The event was held on June 10, 2020.
- FITT is a joint Task Team established by the IMF’s Committee on Balance of Payments Statistics (the Committee) and the Intersecretariat Working Group on National Accounts (ISWGNA).
- FITT’s mandate is to contribute to the revision of the IMF’s Balance of Payments and International Investment Position Manual, sixth edition (BPM6) and the System of National Accounts 2008 (SNA2008) by preparing Guidance Notes (GNs) on financial and payment systems issues.

### The Role of FITT
- To provide technical inputs and make recommendations on methodology of financial and payment systems issues within the revision framework.
- To work and coordinate closely with the Balance of Payments Task Team (BPTT) and with the Advisory Expert Group on National Accounts (AEG).
- FITT’s Guidance Notes are to be sent to the Committee and to the ISWGNA for final endorsement, following review by BPTT and AEG.
- To coordinate with ongoing work in other statistical domains, most notably National Accounts.

### Organization, Co-chairing, and Interaction with Other Task Teams
- Co-chairs: IMF & ECB (ECB co-chair membership representing BP and SNA communities).
- Secretariat: IMF.
- Interaction roles:
  - ECB co-chair: review of guidance notes by BPTT and AEG; coordination of work on cross-cutting issues.
  - FITT coordinates with other Task Forces and Working Groups on cross-cutting issues and with task teams such as DITT, DZTT/CA TT where links exist.

### Organization and Communication within FITT
- A public webpage related to the FITT work program is planned.
  - Key features: Terms of Reference and CRI to be available; link for a separate Guidance Note page; link to provide feedback on GNs; link to a restricted collaboration site for comments (FITT members provided login/password).

### Working Procedures with the BPTT
- BPTT has an oversight/coordinating role for the BPM6 update.
- FITT will also send the GNs to AEG, as it is a joint Task Team.
- Working procedure highlights:
  - Take into account current or completed work on topics on financial and payments systems.
  - Coordinate with other Task Forces or Working Groups on cross-cutting issues.
- Reporting:
  - Periodic reports to the Committee and ISWGNA.
  - Key report: Committee’s annual meeting progress reports will include outcomes and recommendations on issues considered through the Guidance Notes.
  - The Committee makes the final decisions for the BPM6 update and ISWGNA for the SNA update.

### Life Cycle & Governance of TT Guidance Notes
- Review and endorsement steps:
  1. BPTT reviews draft GNs to ensure overall consistency of proposals. Only GNs that impact SNA will be asked of AEG to review.
  2. After a second round review by BPTT (if major changes result from public consultation), FITT will send GNs to the Committee; for issues impacting SNA, FITT will send to both the Committee and ISWGNA.
  3. For cross-cutting SNA and BP issues:
     - In case of joint endorsement, the Committee will decide.
     - If divergent views emerge, Committee and ISWGNA Chairs request SNA/BPM editors’ views.
     - If editors’ views diverge, the Committee and the ISWGNA may adopt their respective positions with transparent documentation of points of departure.
  4. Final endorsement of recommendations on the BPM6 Update resides with the Committee; the Committee should consider editors’ views and may also retain the status quo and place the issue on a future research agenda.

### Standard Framework of Guidance Notes
- SECTION 1: THE ISSUE
  - Background (up to two pages)
    - What is the issue
    - Current international standards to treat the issue
    - Concerns/shortcomings in the current standards
  - Issues for discussion (up to two pages)
    - Possible alternatives
    - Points for discussion
- SECTION 2: OUTCOMES (up to two pages)
  - Recommendation
    - To revise: proposed revision and its rationale
    - Not to revise: reasons
  - Rejected alternatives with reasons
  - Required changes in the current standards

### Approval Process for Guidance Notes
- Step 1: First draft of the GN by authors, including summary of recommendations
- Step 2: Review by Secretariat and Co-chairs
- Step 3: Written consultations within FITT (via VC, if necessary)
- Step 4: Finalize GN based on consultation
- Step 5: Submit for review to BPTT and AEG
- Step 6: Incorporate comments and circulate within FITT
- Step 7: Release of draft Guidance Note for wider public consultation
- Step 8: Second review by BPTT and AEG only if there are significant changes (AEG second review for issues that impact SNA)
- Step 9: Presentation to the Committee and to the ISWGNA for endorsement

### Timeline and Key Targets
- Key Committee meetings:
  - June 2020 Committee Meeting
  - October 27-29, 2020 Committee Meeting
  - October 2021 Committee Meeting
- Timeline for preparing a GN (Number of Weeks total: 17)
  - Drafting of the GN: 3
  - Consultation within the TT members: 2
  - Draft Finalized: 1
  - Draft GN submitted for review to BPTT (and AEG/WGIIS) by TT Chairs: 1
  - Incorporate comments and circulate within TT: 1
  - Posting for public consultation: 4
  - Incorporation of comments, discussion within TT and finalization by co-chairs: 1
  - If significant changes, only, second round of review to BPTT/AEG/other stakeholders: 1
  - GN final version including recommendations completed and sent to BOPCOM (via BPTT): 1
  - BOPCOM Discussion/Decision*: 2
- Note: GNs to be discussed at BOPCOM meetings should be sent at least 2 weeks in advance of meeting date; for written consultations, two weeks timeline suggested.

### FITT Research Topics: High-priority items
- F.1 More disaggregated definition of the financial sector and financial instruments
- F.2 Asymmetric treatment of retained earnings between direct and portfolio investment and potential extension to domestic relationships (link: DITT)
- F.3 Reverse transactions
- F.4 Financial derivatives by type
- F.5 Treatment of credit default swaps
- F.6 Non-bank Financial Intermediation
- F.7 Impact of FINTECH and other financial innovations (link: DZTT/CA TT)
- F.8 Valuation of debt securities at both market and nominal value
- F.9 Valuation of loans (fair value)

### FITT Research Topics: Medium-priority items
- F.10 Treatment of cash collateral
- F.11 Treatment of electricity forwards
- F.12 Covering hybrid insurance and pension products
- F.13 Measurement of margins on buying and selling of financial instruments
- F.14 Treatment of factoring transactions

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_Source: https://www.imf.org/-/media/files/data/statistics/bpm6/fitt/fitt-inaugural-meeting-presentaion-imf-cochair.pdf_