M-PEDD Technical Working Group EBA Clearing STEP2 M-PEDD Technical Working Group 18th May 2006

Project timing Progress is good – despite EPC, SWIFT, BWG and TWG working in parallel – work is converging. Interface version 2 to be sent end May. Written comments required by 16th June Next meeting Tuesday 20 June Finalise Interface Specification ready for presenting to Steering Group. Steering group 30th June. Considerations of non-core work

BWG Follow up ISO Data Formats Feedback on Interface Specifications MPEDD Participant System AOB

DD Service Information Flow IDF Traffic originated by the Bank DVF Traffic originated by counterparties DNF BANK RSF Settlement specific files STEP2 SDF Settlement files for R messages CDF

BWG Update Debit message fields Validation Rules Mandates, Creditors and Interbank Limits Settlement

Alternate Mandate Flow Agreement between creditor and debtor Delivery of Mandate: New Amendments Cancellations Debtor Bank stores mandate

Settlement Currently supported: Single settlement cycle per day Only EURO1/STEP1 supported Bilateral Gross Settlement Future enhancements: Multiple settlement cycles per day Other settlement mechanisms supported Multilateral Net Settlement

Settlement: R-Messages Post-settlement R-Messages can be received up to 42 calendar days after Inter-Bank Settlement Date. After this a flow occurs outside of the scope of the STEP2 Debit Service. R-messages are settled in the next cycle. Bank must put the correct interbank settlement date.

Settlement: Daily Reconciliation Report For each Interbank Settlement Date, report lists: Debits Sent Debits Received Debits Rejected Debits Requested for Cancellation Debits Refused Debits Reversed Debits Settled for that date Reported as both Creditor Bank and Debtor Bank Can report Direct participant and Indirect participants separately

BWG Follow up ISO Data Formats Feedback on Interface Specifications MPEDD Participant System AOB

XML Schemas One XSD Schema for each message type Blueprints for building XML files Diagram representation of a set of data The XML Schema data model includes: the vocabulary (element and attribute names) the content model (relationships, order and structure) the data types.

XML ISO20022 Schemas FItoFICustomerDirectDebit pacs.003.001.01 Direct Debit PaymentCancellationRequest pacs.006.001.01 Req. for Cancellation PaymentReturn pacs.004.001.01 Refund PaymentReversal pacs.007.001.01 Reversal PaymentStatusReport pacs.005.001.01 Reject

EBA XML Schemas Part of the deliverables of the TWG Based on ISO 20022 Standards XSD schemas Some XML fields have been removed XML status (Mandatory/Optional) may be different between ISO and EBA schemas Data formats (ex. Number of characters) can be specific to STEP2

BWG Follow up ISO Data Formats Feedback on Interface Specifications MPEDD Participant System AOB

Feedback on Interface Specifications Is XML the only supported standard for both outgoing and incoming messages or is the use standard swift messages such as MT104 an option? Will Step2 be sending out a report containing the mandates that have been setup?  (page 15, chapter 4.2.1 number 3): The duplicate checking should be done on bulk level or on file level? With or without content-check? (page 19, chapter A.1.1, right column, first row, 3rd line): It ought to be IDF IDENTIFICATION. Checking integrity of the filename  (page 22, chapter B.2; field Original Reference): The Original IDF Reference should be Mandatory

Feedback on Interface Specifications (page 24 etc. Appendix C): include a numbering for the XML fields Daily timetable discussion should be considered as ongoing or final? What does RBAC stand for? Proposal for number of erroneous transactions required for full file rejection : Fixed percentage of errors (e.g. 5%) and simple total amount of errors. Will it be possible to include different bulks with identical Interbank Settlement Date in the same file?  

BWG Follow up XML Schemas ISO Data Formats Feedback on Interface Specifications MPEDD Participant System AOB

BWG Follow up ISO Data Formats Feedback on Interface Specifications MPEDD Participant System AOB

MPEDD Participant System First draft of the Specifications document describes a proposed software architecture Not clear yet if the PS is intended as platform-independent solution or a complete product (eg. MPS) Feedback from banks will narrow the feature list and help produce a real Specifications document This document will then be used for the Vendor program process

Question Development of a new type of STEP2 Participant System could integrate existing Credit Transfer service and provide new features not available in MPS 

MPEDD Participant System

MPEDD Participant System

MPEDD Participant System Questions to Banks SWIFTNet connectivity SAG only or SNL? Reliability, throughput, disaster recovery? Longevity? (short term solution or longer term) Supported platforms? Supported Back office systems? Need to co-exist with other XML services? Need to match validation messages with outgoing originals? Need to perform reconciliation within the interface? Need to perform message queries within the interface? Need to accept settlement message inputs from EURO1/STEP1?

BWG Follow up ISO Data Formats Feedback on Interface Specifications MPEDD Participant System AOB

SWIFTNet 6.0 and STEP2 services SWIFTNet 6.0 will be available starting January 2007 Deadline for migration is December 2008 New software versions for SAG and SNL Changes impacting STEP2 services are : SwCompression information in FileInfo field will be mandatory and follow a single format A new format for request types is mandated. Development of STEP2 MPEDD service will aim for SWIFTNet 6.0 compliance Credit Transfer System migration will share the same planning as for DD

Alternate Mandate Flow Agreement between creditor and debtor Delivery of Mandate: New Amendments Cancellations Debtor Bank stores mandate

Alternate Mandate Flow Proposal Creation of the mandate by the creditor Reception of the mandate by the debtor Delivery of the mandate to the debtor bank Signing of the mandate by the debtor Delivery of the mandate information to the creditor bank Delivery of the mandate information to the creditor by the creditor’s bank Acceptance of the mandate information by the creditor Initiation of collections by the creditor

Pre-settlement report Informing the bank settlement of obligations before settlement occurs. Debit collections to counterparty banks Debit collections from counterparty banks Returns to counterparty banks Reversals to counterparty banks Total EURO1 Credits Total EURO1 Debits Total Net position

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