The Committee on Federal Reserve Bank Affairs (Committee) has considered guidelines that could be used by Board staff and the Committee as input to their assessment of whether a proposal related to Federal Reserve priced services should be subject to public comment before adoption. These guidelines help ensure greater consistency in interpreting the Board's pricing principle requiring public comment "when changes in fees and service arrangements are proposed that would have significant longer-run effects on the nation's payments systems."

Public comment on matters related to Reserve Bank priced service should be requested in the following circumstances:

1. The Board proposes changes to its pricing principles.
2. A Federal Reserve Bank plans to enter a new priced service line or significantly expand or modify an existing service line.
3. All Federal Reserve Banks plan to withdraw from a current service line.
4. The Federal Reserve Banks plan to recover less than the short-run average variable cost for a service line over an extended period.
5. The Reserve Bank's planned action is likely to have direct and material adverse effect on the ability of other service providers to compete effectively in providing similar services due to differing legal powers or constraints or due to a dominant market position of the Federal Reserve deriving from such legal differences.
6. The Federal Reserve proposes a significant modification to the methodology for calculating imputed priced services costs or revenue.
7. The contemplated action would (or is intended to) result in a significant long-term structural change in the payments system.

These guidelines will not be rigidly applied, but rather used at the Board's discretion based on the particular circumstances surrounding a given proposal. The guidelines are subject to interpretation, and it may be expedient in certain cases to issue a proposal for public comment even if it does not fall within one of the categories listed above. These guidelines, however, will provide greater consistency in determining which priced services proposals should be issued for public comment.

Irrespective of whether proposals are subject to public comment, it is essential that decisions regarding Federal Reserve priced services be based on sound analysis and a clear understanding of customer requirements. Limiting the types of proposals subject to public comment places an additional responsibility on Reserve Bank and Board staff to ensure that all proposals are subjected to rigorous analysis and, where appropriate, market research before their approval.