Global Euro Solutions Toolkit Cash Management Solutions for the SEPA Zone and Beyond

Transcription

1 TREASURY SERVICES Global Euro Solutions Toolkit Cash Management Solutions for the SEPA Zone and Beyond

2 J.P. Morgan Treasury Services SEPA The Single Euro Payments Area. A clear, compulsory migration lies ahead From February 2014, Europe s users and providers of payment services must be in a position to operate fully SEPA-compliant payment processes. From this date, all domestic, euro-denominated ACH systems will become obsolete. SEPA Credit Transfers and s will become the only high volume electronic options for the settlement of salary, supplier, tax and other payment obligations in euro. The deadline for a pan-regional migration to SEPA standards is set firm. How can J.P. Morgan help your organisation take full advantage? A New Standard for Payables and Receivables in Euro SEPA sets out to create a standard, end-to-end experience for payment practitioners in the Eurozone. It will replace the region s fragmented payment infrastructures with a single model, offering: High performance payables and receivables founded on XML format Automated processes which minimise manual intervention Common processes to promote a single end-user experience SEPA and My Organisation You may regard SEPA as a springboard to the centralisation of payment processes in your organisation. On the other hand, you may seek a SEPA solution which completely insulates your organisation from the technical changes required of you, rendering your operation compliant from Day 1. Whatever your approach, let J.P. Morgan help you maximise the value of SEPA. Why J.P. Morgan? Since the implementation of SEPA, J.P. Morgan has established a brand new payment platform offering modern, scalable technology to support a high volume SEPA environment. Our platform will help clients leverage the scheme s benefits in the way that the architects of SEPA had originally intended. The investment in this infrastructure reflects the firm s steadfast commitment to the payments industry and market initiatives like SEPA. We have experts ready to help steer your migration efforts to a new era of payments efficiency and performance. This is our business.

3 This Toolkit is designed to help your organisation plan and execute its SEPA strategy. Use it to: Identify the key milestones of a SEPA migration project Evaluate J.P. Morgan s SEPA solution Understand the impact of the regulations coming into force before 2017 Identify some of the key inconsistencies, country by country, of the new SEPA standards

4 global euro solutions A Precedent for Regional Services The euro has matured into the world s second most important currency behind the US dollar. Rarely is the euro out of the news as Eurozone member states wrestle with reform and austerity measures. And amongst treasury communities too, the euro is a focal point for payment practitioners as the region prepares to drop legacy euro ACH schemes in favour of SEPA. In spite of recent turmoil, the euro remains a vital trading, investment and reserve currency for J.P. Morgan clients all over the world. We have made it a priority to build a robust portfolio of euro-denominated cash management services which are detailed in this global euro solutions toolkit. One of the greatest opportunities facing corporate treasury is the switch from a fragmented payments landscape to SEPA s pan-regional model a world first, and a very exciting prospect. This toolkit offers guidance on migration to SEPA instruments. It also explains a plethora of new SEPA rules and standards, and it articulates a J.P. Morgan solution for corporate treasurers which I believe will lead the market. There may be more uncertain times ahead, but let me assure you my team is ready to help you take full advantage of all the opportunities the euro has to offer. John Gibbons J.P. Morgan Treasury Services Europe, Middle East and Africa Regional Executive

5 global euro solutions Global Euro Solutions for Corporate Treasuries J.P. Morgan offers a full range of euro services to help your corporation leverage the currency s strategic importance as a trading and investment currency. Whether you are running, or planning to establish a centralised treasury in Europe, our SEPA solution can help you centralise your euro payment and liquidity activities in a choice of locations. But if you run a decentralised treasury in Europe, our extensive branch coverage in the region can support local account structure, payments and liquidity solutions in all of Europe s principal financial centres including London and Frankfurt. Multiple Account Domiciles: Choose to operate your euro-denominated resident and non-resident accounts in Amsterdam, Brussels, Dublin, Frankfurt, London, Madrid, Milan, Paris, and Zurich. Use a London-based multi-currency account to manage payables and receivables, convertible into 135 currencies Commercial Payments and Receipts: If you manage vendor, tax or payroll payments across the Eurozone, take advantage of our SEPA Credit Transfer cut-off times, some of the most competitive available anywhere. Collect commercial receipts conveniently and easily via or incoming SEPA credits. Treasury Payment Activity: Urgent payment requirements served by J.P. Morgan s direct links to TARGET2 in Frankfurt where the firm enjoys third largest status by value Escrow Accounts: If you are involved in acquisition or merger activity and need to mitigate transaction risk, we can help you establish euro-denominated escrow accounts in multiple countries. Liquidity Structures: Consolidate your residual end-of-day euro balances domiciled across Europe with either automated physical sweeps or notionally pooled balances in-country. Maximise the value of a consolidated euro balance by notionally offsetting it against multi-currency positions Administer your sweep activity real-time, online and automatically calculate intercompany interest accruals between euro accounts. Did you know J.P. Morgan has the largest number of bilateral agreements with third-party banks to automatically collect balances for consolidation? We can help your company further optimise consolidated euro balances with our Multibank Sweep service. Investments: Choose from a full range of on- and off-balance sheet investment alternatives to help you maximise yield on consolidated euro balances. We offer interest-bearing Liquidity Management Accounts, Time Deposits and Money Market Funds. Please note that all investments are dependent on underlying market conditions. Treasurer s Perspective Receivables Commercial Receipts SEPA Credit Transfer Wires Euro Cross Border Auto-Sweep J.P. Morgan EUR Acc London J.P. Morgan EUR Acc Dublin J.P. Morgan EUR Acc Milan J.P. Morgan EUR Acc Paris Euro Notional Pool J.P. Morgan EUR payables Acc Frankfurt J.P. Morgan EUR principal Acc Frankfurt J.P. Morgan EUR receivables Acc Frankfurt 3rd Party Bank EUR Acc Lisbon Payments Commercial Payments Tax, vendor, payroll payments via SEPA Credit Transfer Treasury Payments via TARGET2 Investments in euro via Time Deposits and Money Market Funds Automated Multibank Euro Sweep

6 global euro solutions SEPA A Solution for the Payment Factory In 2008, SEPA introduced the world to a true pan-regional ACH solution for Europe. Supported by new terms laid out in the Payments Services Directive of 2009, SEPA would homogenise and improve the experience of the payment end-user, through; Transparency of charges Elimination of interchange fees (on direct debits) and float Maximum delivery timeframe of D+1 Enhanced payment narrative Use of a standard data set By leveraging the SEPA framework, corporate treasury will drive efficiency gains, mitigate risk and enhance performance. This is how: Corporate Goal SEPA Advantage Efficiency Risk Mitigation Performance Enhancement A SEPA solution integrates seamlessly with J.P. Morgan s broader euro cash management offering for treasury and commercial payments, liquidity management and investments SEPA consolidates multiple, disparate, national ACH schemes into a single, standard, pan-european alternative SEPA standardises message formats, delivery timeframes and usage rules for a common end-user experience The end-to-end payment process is streamlined thanks to structured and complete data contained in key reference fields SEPA supports a more centralised and consolidated management of euro liquidity As a standard solution for multiple markets, SEPA reduces dependency on multiple systems, operational processes and connection points SEPA encourages the rationalisation of bank relationships and operational accounts across multiple Eurozone markets Adoption of the affords better control over collections and can improve forecasting Elimination of interchange fees charged by the debtor s bank can reduce the overall cost of collection for the creditor (in certain countries) Rich XML formats featuring 140 characters of payment narrative as well as a data field for Ultimate Debtor Party combine to enable more automated reconciliation. You and your counterparties can agree to use structured formats within these fields to automate processes even further Standardisation of direct debit reversal timeframes across Europe simplifies administration The blocking of unwanted direct debits on the basis of amount or frequency of debits is possible Whether you regard SEPA as an opportunity for a wholesale European treasury evolution, or whether you simply need a bank that can take your transaction processing, lock stock and barrel and render it SEPA-compliant from Day 1, we are ready to accompany you on that journey.

7 global euro solutions The J.P. Morgan SEPA Solution J.P. Morgan identified SEPA as a strategic priority in Since then we have worked tirelessly to present corporate and government institutions with an unparalleled SEPA solution set that will insulate treasurers from the burden of change but also exploit every benefit of this breakthrough initiative. Practice Feature SEPA Advantage Accounts Location Choice of nine J.P. Morgan country locations across Western Europe; Amsterdam, Brussels, Dublin, Frankfurt, London, Madrid, Milan, Paris, Zurich Currency All Western European branches can accommodate accounts in euro. Clients that wish to operate SEPA payables or receivables services using an alternative currency may do so from a London account. (Over 40 options available) Payments Reach Make payments across the 32-country SEPA Zone Integrates seamlessly with J.P. Morgan s TARGET2 euro wire service Value-dating Get ahead of the D+1 maximum delivery timeframe and send / receive payments intra-day J.P. Morgan will honour your payment instructions on the value date until 12:00CET* for SEPA KEY FEATURE SEPA SWITCH If your systems cannot produce payment instructions in XML format, continue sending to J.P. Morgan in whichever legacy format you choose. Let our unique SEPA SWITCH feature shoulder the burden of rendering your instructions SEPAcompliant. WHAT IT DOES: Validates the BBAN data of your payment beneficiary Converts beneficiary BBAN data to IBAN where required Enriches any payment instructions where crucial data is omitted Sorts and processes EUR files containing multiple payment types, always choosing the most expeditious and cost-efficient routing Selects alternative payment routing in order to achieve required value date if, for example, cut-off times have been missed** * subject to market and operating conditions **charges for alternative payment routing may apply

8 global euro solutions Practice Feature SEPA Advantage Collections Scope Receive incoming SEPA Credit Transfers from anywhere in the 32-country SEPA Zone or initiate via the Core or Business to Business schemes KEY FEATURE Mandate Management New Regulation requires that the creditor [collecting party] retains de-materialised, -compliant mandates on file. J.P. Morgan s Mandate Management service can host these documents for you and provide an online interface which places you in control of changes and updates WHAT IT DOES: De-materialises legacy mandates, converting the data to be SEPA ready, appending unique identifiers required by SEPA regulation Enables online set-up of new mandates, alterations and cancellations Provides access to a suite of mandate status reports detailing returned or rejected transactions Full transaction audit trail Administration File Submission SEPA instructions can be submitted via J.P. Morgan ACCESS online, MultiCash, SWIFT FIN and Host-to-Host channels. Reporting SEPA instructions may be submitted within files of mixed transaction types. Reconciliation Transaction reports detailing SEPA debits and credits are accessible on an intraday basis, online, via J.P. Morgan ACCESS and J.P. Morgan ACCESS Mobile Leverage J.P. Morgan s award-winning online reconciliation tool Receivables Edge, to reconcile SEPA receivables amongst other transaction types JPMorgan Chase & Co. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC. All services are subject to applicable laws and regulations and service terms. Not all products and services are available in all geographic areas. Eligibility for particular products and services is subject to final determination by J.P. Morgan and/or its affiliates/subsidiaries. Produced by Treasury Services Global Marketing.

9 global euro solutions SEPA Migration Project Key Components of a Migration to SEPA Your migration to SEPA instruments may well involve stakeholders in Human Resources, Payroll & Pensions, Technology, Finance and Legal as well as Accounts Payable. A robust plan of action is critical. This stage by stage guide illustrates the key undertakings of a migration project. PAYABLES PROCESS Key: Tick as appropriate Complete Underway To Start N/A Short Term Long Term Counterparty Data Locate systems holding counterparty records Review records and assess proportion of BBAN (legacy) versus IBAN (SEPA) records Decision Point Manually collect IBAN records or auto-convert BBAN? Contact counterparties as necessary to update IBAN records, or Engage J.P. Morgan to convert BBAN to IBAN Employ J.P. Morgan conversion services during processing Bank Audit Evaluate your bank s ability to process SEPAcompliant payables and receivables across the 32-country SEPA Zone Agree your euro bank partner strategy with internal stakeholders and implement Confirm your bank s global euro capabilities Counterparty Liaison Advise suppliers and clients of your intention to leverage SEPA instruments and provide/ request IBAN data on invoices to automate reconciliation Agree which structured references to adopt with trading partners and any other means of leveraging XML technology Benefit Analysis Create a SEPA benefits statement detailing cost savings, efficiencies and process improvements Implement a sustainable framework to identify and measure SEPA benefits

10 global euro solutions RECEIVABLES PROCESS Key: Tick as appropriate Complete Underway To Start N/A Short Term Long Term Counterparty Liaison Agree with customers what narrative to use to assist with automated reconciliation (e.g. invoice numbers, code words) Reconciliation Engage Technology to prime receivables systems to recognise and reconcile agreed transaction codes Implement advanced receivables reconciliation to maximise automation, and minimise the risks and cost of manual intervention Run reconciliation test Direct Debit Mandate Management Locate existing euro Direct Debit mandates Liaise with collecting bank to procure unique SDD reference for annotation on mandates Decision Point Manually reproduce mandates in SEPA format or auto-convert? Select mandate management solution provider, evaluate external vs. in-house hosting options and dematerialise mandates Run test with bank to verify cross-reference of DD request against mandate Establish a process for Returns J.P. Morgan s SEPA Solution affords corporate treasuries the freedom to decide when they want to leverage the benefits of SEPA, regardless of mandatory timeframes. Whether you regard SEPA as an opportunity for a wholesale treasury evolution, or whether you simply need a bank that can take your transaction processing, lock stock and barrel and render it SEPA-compliant from Day 1, we re ready to help you take that journey JPMorgan Chase & Co. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC. All services are subject to applicable laws and regulations and service terms. Not all products and services are available in all geographic areas. Eligibility for particular products and services is subject to final determination by J.P. Morgan and/or its affiliates/subsidiaries. Produced by Treasury Services Global Marketing.

11 global euro solutions SEPA Regulation What Lies Ahead and How It Will Affect Your Organisation Several regulatory changes will impact the processes used by corporate treasuries effecting payments over the coming years. Many of the changes will streamline payment processes even further, adding transparency, promoting efficiency and improving performance. Key Date Impact Regulation What It Means 1 Nov 12 Elimination of interchange fee on cross-border direct debits 1 Feb 14 End date for euro-denominated ACH schemes 1 Feb 14 Provision of BIC no longer compulsory within a domestic payment instruction By removing this tranche of cost, users of cross-border s can request a more competitive fee structure from their service provider Planning and execution required. Supports a wider centralisation of AP/AR processes. J.P. Morgan can insulate clients from these changes if required ERP counterparty bank account data fields need only carry the counterparty IBAN 1 Feb 14 (later if country decrees) Provision of BIC no longer compulsory within a cross-border payment instruction ERP counterparty bank account data fields need only carry the counterparty IBAN 1 Feb 16 User must send Provider payment instructions in XML format 1 Feb 16 Service Provider absolved of Central Bank Reporting responsibilities Payment interface with bank must be reviewed and adapted. J.P. Morgan can insulate clients from these changes if required Typically a process undertaken by payment provider, but in any case, no longer a requirement 1 Feb 17 Elimination of interchange fee on domestic direct debits By removing this tranche of cost, users of domestic s can request a more competitive fee structure from their service provider 1 November 2012: Interchange fee on cross-border SDDs eliminated 1 February 2014: SEPA Migration Deadline Domestic payment instructions no longer need to quote BIC 1 February 2016: Central Bank Reporting ceases Instructions (User to Provider) in XML Cross-border payment instructions no longer need to quote BIC 1 February 2017: Interchange fee on domestic SDDs eliminated

12 global euro solutions SEPA Country Fact Sheet: Belgium Use this Country Fact Sheet to compare domestic legacy processes with the Credit Transfer and Direct Debit instruments of SEPA Domestic Credit Transfer vs SEPA Credit Transfer Domestic Credit Transfer SEPA Credit Transfer Account Structure Account number (only) IBAN/BIC It is recommended that corporates convert BBAN to IBAN. Alternatively J.P. Morgan can convert the BBAN to a SEPA-compliant IBAN. Remittance parameters 86 characters 140 characters structured and unstructured This will offer enhanced opportunities to automate internal reporting and revisit opportunities to automate reconciliation with counterparties. For and on behalf of payments supported CIRI XML ISO No need to modify current format; J.P. Morgan offers file format conversion services. However, XML offers richer data format. No Yes Examine opportunity for payment factory supporting AP/AR on behalf of a group of companies. Payroll payments Yes - currently most payroll files are sent via a bureau Yes, recommend use of descriptor SALA Send payroll files directly to J.P. Morgan or via J.P. Morgan s supported bureaux. Tax payments Yes Yes Send tax payments directly to J.P. Morgan to be processed as CTs. s (Core and B2B) is the Pan European direct debit scheme that will replace national/legacy direct debit schemes progressively. There are two types of s: Core and B2B; currently most countries only have one legacy direct debit scheme, which covers both B2C and B2B transactions. Creditor Identifier as well as a unique mandate reference is required to carry out collections via the SEPA DD scheme, the ID is provided by a sponsoring bank. Domestic Direct Debit vs (Core) Reach Domestic only Domestic and cross-border Account Structure Account number (only) BIC and IBAN It is recommended that corporates convert BBAN to IBAN. Alternatively J.P. Morgan can convert the BBAN to a SEPA-compliant IBAN. CIRI XML ISO No need to modify current format; J.P. Morgan will offer file format conversion services for Host-to-Host channels.

13 SEPA Country Fact Sheet: Belgium Domestic Direct Debit vs (Core) - continued Creditor Identifier (CI) Yes (direct debit identification number) New SEPA creditor identifier must be used - this will be supplied by the creditor s bank Mandate Process Debtor bank holds the mandate Creditor holds the mandate unique mandate reference is a mandatory field in each collection Identify where your systems and processes need a CI for client mandates and origination files. J.P. Morgan provides SEPA CIs. SEPA CIs are universal within the Euro-zone and do not need to be country specific. Identify whether your system can store a mandate record and allow a unique reference number to be issued. J.P. Morgan s Mandate Management service de-materialises legacy scheme mandates and renders them SEPA-compliant by assigning them with a unique creditor ID and mandate reference. Mandate Migration Maximum Number of Characters for Remittance Information Existing legacy mandates may be used for collections via SDD Core. The first collection under SDD Core must be coded FRST 45 characters 140 characters structured and unstructured Identify how the existing mandate will be stored to be able to be used in a SEPA format. J.P. Morgan offers a Mandate Management Service to the creditor of the direct debit simplifying storage, maintenance and processing of the mandate. This will offer enhanced opportunities to automate internal reporting and revisit opportunities to automate reconciliation with counterparties. J.P. Morgan supports structured remittance as well as the standard unstructured, plus all the additional reference fields supported within a XML message. Pre-notification (creditor advice to debtor of amount(s) and date(s) of collection(s) No later than 5 calendar days prior to due/debit date No later than 14 calendar days prior to due/debit date (may be less if agreed between debtor and creditor) Identify impact on business processes which may need to be updated to ensure notification is made in defined timelines. Execution Times D-1 D-5 for first and one-off collections D-2 for subsequent collections (D = due/debit date) Identify impact on operational and technical processes, which will need to be changed to cater for the longer collection timeframe. Returns Not later than D+4 Not later than D+5 Identify processes that are impacted by Returns and update these with the changed timeframe. J.P.Morgan offers automatic representment service. Reversals Not available Available According to SEPA clearing guidelines.

14 Further Information about country migration to SEPA can be found at Domestic Direct Debit vs (Core) - continued Refunds/Revocation Up to 8 weeks after due/debit date for authorised transactions (where debtor has signed a mandate) Up to 13 months after due/ date for unauthorised transactions (where debtor has not signed a mandate) Up to 8 weeks after due/debit date for authorised transactions (where debtor has signed a mandate) Up to 13 months after due/date for unauthorised transactions (where debtor has not signed a mandate) Identify any system or operational processes that will be affected by SEPA s refund period, if different from legacy. Mandate Expiry Open for domestic DD until revocation by the user Mandates expire 36 months after last initiated SDD Identify any situations that may result in collections being greater than 36 months apart. Additional Some banks may require debtor authorization to perform a SDD; therefore we recommend that creditors advise their debtors to notify their banks prior to the first collection. The National Belgian Bank (NBB), acts as the central repository of mandate ; it uses an agreed process to enable corporates to migrate to SEPA. Domestic Direct Debit vs (B2B) [no specific B2B service] (SDD) Business to Business (B2B) Reach Domestic only Domestic and cross-border Account Structure Account number (only) BIC and IBAN It is recommended that corporates convert BBAN to IBAN. Alternatively J.P. Morgan can convert the BBAN to a SEPA-compliant IBAN. CIRI XML ISO No need to modify current format; J.P. Morgan will offer file format conversion services for Host-to-Host channels. Creditor Identifier (CI) Yes (direct debit identification number) New SEPA creditor identifier must be used - this will be supplied by the creditor s bank Identify where your systems and processes need a CI for client mandates and origination files. J.P. Morgan provides SEPA CIs. SEPA CIs are universal within the Euro-zone and do not need to be country specific. Mandate Process Debtor bank holds the mandate Creditor holds the mandate - unique mandate reference is a mandatory field in each collection Debtor bank must be in possession of a wet ink debit authority from the debtor prior to debiting the debtor s account Identify whether your system can store a mandate record and allow a unique reference number to be issued. J.P. Morgan s Mandate Management service de-materialises legacy scheme mandates and renders them SEPA-compliant by assigning them with a unique creditor ID and mandate reference.

15 Domestic Direct Debit vs (B2B) - continued [no specific B2B service] (SDD) Business to Business (B2B) Mandate Migration Mandates must be re-issued - existing legacy mandates cannot be used for collections via SDD B2B Identify how the existing data will be stored to be able to be used in a SEPA format. J.P. Morgan offers a Mandate Management Service to the creditor of the direct debit simplifying storage, maintenance and processing of the mandate. Pre-notification (creditor advice to debtor of amount(s) and date(s) of collection(s) No later than 5 calendar days prior to due/debit date No later than 14 calendar days prior to due/debit date (may be less if agreed between debtor and creditor) Identify impact on business processes which may need to be updated to ensure notification is made in defined timelines. Execution Time D-1 D-1 for first, subsequent and one-off collections Identify impact on operational and technical processes, which will need to be changed to cater for SEPA s collection timeframe. Returns No later than D+4 Not later than D+2 Identify processes that are impacted by Returns and update these with the changed timeframe. J.P. Morgan offers automatic representment service. Reversals Not available Available According to SEPA clearing guidelines. Refunds/Revocation Up to 8 weeks after due/ debit date for authorised transactions (where debtor has signed a mandate) No right of refund for authorised transactions (where debtor has signed a mandate) Identify any system or operational processes that will be affected by SEPA s refund period, if different from legacy. Up to 13 months after due/ debit date for unauthorised transactions (where debtor has not signed a mandate) Up to 13 months after due/date for unauthorised transactions (where debtor has not signed a mandate) Mandate Expiry Additional Open for domestic DD until revocation by the user Mandates expire 36 months after last initiated SDD Debtors must provide an authority to their banks prior to a first SDD collection. Identify any situations that may result in collections being greater than 36 months apart JPMorgan Chase & Co. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC. All services are subject to applicable laws and regulations and service terms. Not all products and services are available in all geographic areas. Eligibility for particular products and services is subject to final determination by J.P. Morgan and/or its affiliates/subsidiaries. Produced by Treasury Services Global Marketing.

16 global euro solutions SEPA Country Fact Sheet: France Use this Country Fact Sheet to compare domestic legacy processes with the Credit Transfer and Direct Debit instruments of SEPA Domestic Credit Transfer vs SEPA Credit Transfer Domestic Credit Transfer SEPA Credit Transfer Account Structure BBAN (Bank sort code/branch code/account number) IBAN/BIC It is recommended that corporates convert BBAN to IBAN. J.P. Morgan will convert the BBAN to a SEPA-compliant IBAN. Remittance parameters 64 characters 140 characters structured and unstructured This will offer enhanced opportunities to automate internal reporting and revisit opportunities to automate reconciliation with counterparties. J.P. Morgan supports structured remittance as well as the standard unstructured, plus all the additional reference fields supported within a XML message. For and on behalf of payments supported AFB160 XML ISO No need to modify current format; J.P. Morgan offers file format conversion services. However, XML offers richer data format. No Yes Examine opportunity for payment factory supporting AP/AR on behalf of a group of companies. Payroll payments Yes Yes, recommend use of descriptor SALA Send payroll files directly to J.P. Morgan or via J.P. Morgan s supported bureaux. Tax payments Yes - Currently most tax payments are performed via DDs. Yes We understand that it will be standard practice for tax payments to be conducted via SEPA DDs. Additionally, send tax payments directly to J.P. Morgan to be processed as CTs. s (Core and B2B) is the Pan European direct debit scheme that will replace national/legacy direct debit schemes progressively. There are two types of s: Core and B2B; currently most countries only have one legacy direct debit scheme, which covers both B2C and B2B transactions. Creditor Identifier as well as a unique mandate reference is required to carry out collections via the SEPA DD scheme, the ID is provided by a sponsoring bank. Domestic Direct Debit vs (Core) Reach Domestic only Domestic and cross-border Account Structure BBAN (Bank sort code/branch code/account number) BIC and IBAN It is recommended that corporates convert BBAN to IBAN. Alternatively J.P. Morgan can convert the BBAN to a SEPA-compliant IBAN. AFB160 XML ISO No need to modify current format; J.P. Morgan will offer file format conversion services for Host-to-Host channels.

17 SEPA Country Fact Sheet: France Domestic Direct Debit vs (Core) - continued Creditor Identifier (CI) Originators of Direct Debits require an ID, which is the NNE (Numéro Nationale D Émetteur) assigned by the Banque de France New SEPA creditor identifier must be used - this will be supplied by the creditor s bank Identify where your systems and processes need a CI for client mandates and origination files. J.P. Morgan provides SEPA CIs. SEPA CIs are universal within the Euro-zone and do not need to be country specific. Mandate Process Debtor bank holds the mandate Creditor holds the mandate A unique mandate reference is a mandatory field in each collection Identify whether your system can store a mandate record and allow a unique reference number to be issued. J.P. Morgan s Mandate Management service de-materialises legacy scheme mandates and renders them SEPA-compliant by assigning them with a unique creditor ID and mandate reference. Mandate Migration Maximum Number of Characters for Remittance Information Existing legacy mandates may be used for collections via SDD Core. The first collection under SDD Core must be coded FRST 45 characters 140 characters structured and unstructured Identify how the existing mandate will be stored to be able to be used in a SEPA format. Identify how the existing data will be stored to be able to be used in a SEPA format. J.P. Morgan offers a Mandate Management Service to the creditor of the direct debit simplifying storage, maintenance and processing of the mandate. Clients have to review what transactions use reference text > 140 characters and decide on how to execute transactions in the future. J.P. Morgan supports structured remittance as well as the standard unstructured, plus all the additional reference fields supported within a XML message. Pre-notification (creditor advice to debtor of amount(s) and date(s) of collection(s) Execution Times Consumer must be notified 15 days prior to debit if amount or date is changed D-2 (accéléré) D-4 (standard) No later than 14 calendar days prior to due/debit date (may be less if agreed between debtor and creditor) D-5 for first and one-off collections D-2 for subsequent collections (D = due/debit date) Identify impact on business processes which may need to be updated to ensure notification is made in defined timelines. Identify impact on operational and technical processes, which will need to be changed to cater for the longer collection timeframe. Returns Not later than D+6 Not later than D+5 Identify processes that are impacted by Returns and update these with the changed timeframe. J.P.Morgan offers automatic representment service. Reversals Not available Available According to SEPA clearing guidelines.

18 Further Information about country migration to SEPA can be found at Domestic Direct Debit vs (Core) - continued Refunds/Revocation Up to 8 weeks after due/ debit date for authorised transactions (where debtor has signed a mandate) Up to 13 months after due/ date for unauthorised transactions (where debtor has not signed a mandate) Up to 8 weeks after due/debit date for authorised transactions (where debtor has signed a mandate) Up to 13 months after due/date for unauthorised transactions (where debtor has not signed a mandate) Identify any system or operational processes that will be affected by SEPA s refund period, if different from legacy. Mandate Expiry Open for domestic DD until revocation by the user Mandates expire 36 months after last initiated SDD Identify any situations that may result in collections being greater than 36 months apart. Interchange Charges apply Prohibited for crossborder SDDs from November 2012 and for domestic SDDs from February 2017 Certain countries agreed to remove interchange fees for domestic transactions starting Additional Some banks may require debtor authorization to perform a SDD; therefore we recommend that creditors advise their debtors to notify their banks prior to the first collection. JPMorgan provides guidance on mandate migration best practice within France. Domestic Direct Debit vs (B2B) [no specific B2B service] (SDD) Business to Business (B2B) Reach Domestic only Domestic and cross-border Account Structure Creditor Identifier (CI) BBAN (Bank sort code/branch code/account number) BIC and IBAN It is recommended that corporates convert BBAN to IBAN. Alternatively J.P. Morgan can convert the BBAN to a SEPA-compliant IBAN. AFB160 XML ISO No need to modify current format; J.P. Morgan will offer file format conversion services for Host-to-Host channels. Originators of Direct Debits require an ID, which is the NNE (Numéro Nationale D Émetteur) assigned by the Banque de France New SEPA creditor identifier must be used - this will be supplied by the creditor s bank Identify where your systems and processes need a CI for client mandates and origination files. J.P. Morgan provides SEPA CIs. SEPA CIs are universal within the Euro-zone and do not need to be country specific.

19 Domestic Direct Debit vs (B2B) - continued Legacy Business to Consumer [no specific B2B service] (SDD) Business to Business (B2B) Mandate Process Debtor bank holds the mandate Creditor holds the mandate - unique mandate reference is a mandatory field in each collection Debtor bank must be in possession of a wet ink debit authority from the debtor prior to debiting the debtor s account Identify whether your system can store a mandate record and allow a unique reference number to be issued. J.P. Morgan s Mandate Management service de-materialises legacy scheme mandates and renders them SEPAcompliant by assigning them with a unique creditor ID and mandate reference. Mandate Migration Mandates must be re-issued - existing legacy mandates cannot be used for collections via SDD B2B Identify how the existing data will be stored to be able to be used in a SEPA format. J.P. Morgan offers a Mandate Management Service to the creditor of the direct debit simplifying storage, maintenance and processing of the mandate. Pre-notification (creditor advice to debtor of amount(s) and date(s) of collection(s) Consumer must be notified 15 prior to debit if amount or date is changed No later than 14 calendar days prior to due/debit date (may be less if agreed between debtor and creditor) Identify impact on business processes which may need to be updated to ensure notification is made in defined timelines. Execution Time D-2 (accéléré) D-4 (standard) D-1 for first, subsequent and one-off collections Identify impact on operational and technical processes, which will need to be changed to cater for the shorter collection timeframe. Returns Not later than D+6 Not later than D+2 Identify processes that are impacted by Returns and update these with the changed timeframe. J.P. Morgan offers automatic representment service. Reversals Not available Available According to SEPA clearing guidelines. Refunds Mandate Expiry Up to 8 weeks after due/ debit date for authorised transactions (where debtor has signed a mandate) Up to 13 months after due/ debit date for unauthorised transactions (where debtor has not signed a mandate) Open for domestic DD until revocation by the user No right of refund for authorised transactions (where debtor has signed a mandate) Up to 13 months after due/ date for unauthorised transactions (where debtor has not signed a mandate) Mandates expire 36 months after last initiated SDD Interchange Charges apply Prohibited for cross-border SDDs from November 2012 and for domestic SDDs from February 2017 Identify any system or operational processes that will be affected by SEPA s refund period, if different from legacy. Identify any situations that may result in collections being greater than 36 months apart. Certain countries agreed to remove interchange fees for domestic transactions starting Additional Debtors must provide an authority to their banks prior to a first SDD collection JPMorgan Chase & Co. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC. All services are subject to applicable laws and regulations and service terms. Not all products and services are available in all geographic areas. Eligibility for particular products and services is subject to final determination by J.P. Morgan and/or its affiliates/subsidiaries. Produced by Treasury Services Global Marketing.

20 global euro solutions SEPA Country Fact Sheet: Germany Use this Country Fact Sheet to compare domestic legacy processes with the Credit Transfer and Direct Debit instruments of SEPA Domestic Credit Transfer vs SEPA Credit Transfer Domestic Credit Transfer SEPA Credit Transfer Account Structure BBAN (Bank sort code/ branch code/account number) IBAN/BIC It is recommended that corporates convert BBAN to IBAN. Alternatively J.P. Morgan can convert the BBAN to a SEPA-compliant IBAN. Remittance parameters 378 characters 140 characters structured and unstructured Clients have to review what transactions use reference text > 140 characters and decide on how to execute transactions in the future. J.P. Morgan supports structured remittance as well as the standard unstructured, plus all the additional reference fields supported within a XML message. For and on behalf of payments supported DTAUS XML ISO No need to modify current format; J.P. Morgan offers file format conversion services. However, XML offers richer data format. No Yes Examine opportunity for payment factory supporting AP/AR on behalf of a group of companies. Payroll payments Yes Yes, recommend use of descriptor SALA Send payroll files directly to J.P. Morgan or via J.P. Morgan s supported bureaux. Tax payments Yes Yes Send tax payments directly to J.P. Morgan to be processed as CTs. s (Core and B2B) is the Pan European direct debit scheme that will replace national/legacy direct debit schemes progressively. There are two types of s: Core and B2B; currently most countries only have one legacy direct debit scheme, which covers both B2C and B2B transactions. Creditor Identifier as well as a unique mandate reference is required to carry out collections via the SEPA DD scheme, the ID is provided by a sponsoring bank. Domestic Direct Debit vs (Core) Reach Domestic only Domestic and cross-border Account Structure BBAN (bank sort code and account number) BIC and IBAN It is recommended that corporates convert BBAN to IBAN. Alternatively J.P. Morgan can convert the BBAN to a SEPA-compliant IBAN. DTAUS XML ISO No need to modify current format; J.P. Morgan will offer file format conversion services for Host-to-Host channels.

21 SEPA Country Fact Sheet: Germany Domestic Direct Debit vs (Core) - continued Creditor Identifier (CI) None New SEPA creditor identifier must be used - this will be supplied by the creditor s bank Mandate Process Creditor holds the mandate Creditor holds the mandate Mandate Migration A unique mandate reference is a mandatory field in each collection Existing legacy mandates may be used for collections via SDD Core. The first collection under SDD Core must be coded FRST Identify where your systems and processes need a CI for client mandates and origination files. J.P. Morgan provides SEPA CIs. SEPA CIs are universal within the Euro-zone and do not need to be country specific. Identify whether your system can store a mandate record and allow a unique reference number to be issued. J.P. Morgan s Mandate Management service de-materialises legacy scheme mandates and renders them SEPA-compliant by assigning them with a unique creditor ID and mandate reference. Identify how the existing mandate will be stored to be able to be used in a SEPA format. J.P. Morgan offers a Mandate Management Service to the creditor of the direct debit simplifying storage, maintenance and processing of the mandate. Maximum Number of Characters for Remittance Information 378 characters 140 characters structured and unstructured Clients have to review which transactions use reference text > 140 characters and decide on how to execute transactions in the future. J.P. Morgan supports structured remittance as well as the standard unstructured, plus all the additional reference fields supported within a XML message. Pre-notification (creditor advice to debtor of amount(s) and date(s) of collection(s) There is no rule on advance notification. In practice, a notification is usually sent 1 to 2 weeks in advance of a direct debit No later than 14 calendar days prior to due/debit date (may be less if agreed between debtor and creditor) Execution Times D-1 D-5 for first and one-off collections D-2 for subsequent collections (D = due/debit date) Identify impact on business processes which may need to be updated to ensure notification is made in defined timelines. Identify impact on operational and technical processes, which will need to be changed to cater for the longer collection timeframe. Returns Not later than D+3 Not later than D+5 Identify processes that are impacted by Returns and update these with the changed timeframe. J.P. Morgan offers automatic representment service. Reversals Not available Available According to SEPA clearing guidelines.

22 Further Information about country migration to SEPA can be found at Domestic Direct Debit vs (Core) - continued Refunds/Revocation Mandate Expiry Additional Up to 6 weeks after the receipt of bank statement The validity period is unlimited until it is cancelled by the debtor Up to 8 weeks after due/debit date for authorised transactions (where debtor has signed a mandate) Up to 13 months after due/date for unauthorised transactions (where debtor has not signed a mandate) Mandates expire 36 months after last initiated SDD Identify any system or operational processes that will be affected by SEPA s refund period, if different from legacy. Identify any situations that may result in collections being greater than 36 months apart. Some banks may require debtor authorization to perform a SDD; therefore we recommend that creditors advise their debtors to notify their banks prior to the first collection. JPMorgan provides guidance on mandate migration best practice within Germany. Domestic Direct Debit vs (B2B) Legacy Business to Business (B2B) Direct Debit [Abbuchungsauftrag] (SDD) Business to Business (B2B) Reach Domestic only Domestic and cross-border Account Structure Account number (only) BIC and IBAN It is recommended that corporates convert BBAN to IBAN. Alternatively J.P. Morgan can convert the BBAN to a SEPA-compliant IBAN. DTAUS XML ISO No need to modify current format; J.P. Morgan will offer file format conversion services for Host-to-Host channels. Creditor Identifier (CI) None New SEPA creditor identifier must be used - this will be supplied by the creditor s bank Identify where your systems and processes need a CI for client mandates and origination files. J.P. Morgan provides SEPA CIs. SEPA CIs are universal within the Euro-zone and do not need to be country specific. Mandate Process Debtor bank holds the mandate Creditor holds the mandate - unique mandate reference is a mandatory field in each collection Debtor bank must be in possession of a wet ink debit authority from the debtor prior to debiting the debtor s account Identify whether your system can store a mandate record and allow a unique reference number to be issued. J.P. Morgan s Mandate Management service de-materialises legacy scheme mandates and renders them SEPA-compliant by assigning them with a unique creditor ID and mandate reference.

23 Domestic Direct Debit vs (B2B) - continued Legacy Business to Business (B2B) Direct Debit [Abbuchungsauftrag] (SDD) Business to Business (B2B) Mandate Migration Mandates must be re-issued - existing legacy mandates cannot be used for collections via SDD B2B Identify how the existing mandate will be stored to be able to be used in a SEPA format. J.P. Morgan offers a Mandate Management Service to the creditor of the direct debit simplifying storage, maintenance and processing of the mandate. Pre-notification (creditor advice to debtor of amount(s) and date(s) of collection(s) There is no rule on advance notification. In practice, a notification is usually sent 1 to 2 weeks in advance of a direct debit No later than 14 calendar days prior to due/debit date (may be less if agreed between debtor and creditor) Identify impact on business processes which may need to be updated to ensure notification is made in defined timelines. Execution Time D-1 D-1 for first, subsequent and one-off collections Identify impact on operational and technical processes, which will need to be changed to cater for SEPA s collection timeframe. Returns Not later than D+3 Not later than D+2 Identify processes that are impacted by Returns and update these with the changed timeframe. J.P. Morgan offers automatic representment service. Reversals Not available Available According to SEPA clearing guidelines. Refunds/Revocation Up to 13 months after due/ debit date for unauthorised transactions (where debtor has not signed a mandate) No right of refund for authorised transactions (where debtor has signed a mandate) Identify any system or operational processes that will be affected by SEPA s refund period, if different from legacy. Up to 13 months after due/date for unauthorised transactions (where debtor has not signed a mandate) Mandate Expiry There is no rule on advance notification. In practice, a notification is usually sent 1 to 2 weeks in advance of a direct debit Mandates expire 36 months after last initiated SDD Identify any situations that may result in collections being greater than 36 months apart. Additional Debtors must provide an authority to their banks prior to a first SDD collection JPMorgan Chase & Co. All Rights Reserved. JPMorgan Chase Bank, N.A. Member FDIC. All services are subject to applicable laws and regulations and service terms. Not all products and services are available in all geographic areas. Eligibility for particular products and services is subject to final determination by J.P. Morgan and/or its affiliates/subsidiaries. Produced by Treasury Services Global Marketing.

24 global euro solutions SEPA Country Fact Sheet: Ireland Use this Country Fact Sheet to compare domestic legacy processes with the Credit Transfer and Direct Debit instruments of SEPA Domestic Credit Transfer vs SEPA Credit Transfer Domestic Credit Transfer SEPA Credit Transfer Account Structure BBAN (Bank sort code/ branch code/account number) IBAN/BIC It is recommended that corporates convert BBAN to IBAN. Alternatively, J.P. Morgan can convert the BBAN to a SEPA-compliant IBAN. Remittance parameters 18 characters 140 characters structured and unstructured This will offer enhanced opportunities to automate internal reporting and revisit opportunities to automate reconciliation with counterparties. JP Morgan supports structured remittance as well as the standard unstructured, plus all the additional reference fields supported within a XML message. For and on behalf of payments supported IPSO STD18 XML ISO No need to modify current format; J.P. Morgan offers file format conversion services. However, XML offers richer data format. No Yes Examine opportunity for payment factory supporting AP/AR on behalf of a group of companies. Payroll payments Yes Yes, recommend use of descriptor SALA Tax payments Yes No Ireland uses a domestic system to process tax payments, which is not adapted to handle SEPA yet Send payroll files directly to J.P. Morgan or via J.P. Morgan s supported bureaux. SEPA mandates that tax authorities cannot insist on a local in-country account be used for making tax payments. J.P.Morgan is monitoring how countries implement this directive. s (Core and B2B) is the Pan European direct debit scheme that will replace national/legacy direct debit schemes progressively. There are two types of s: Core and B2B; currently most countries only have one legacy direct debit scheme, which covers both B2C and B2B transactions. Creditor Identifier as well as a unique mandate reference is required to carry out collections via the SEPA DD scheme, the ID is provided by a sponsoring bank. Domestic Direct Debit vs (Core) COMPARISON: Current Reach Domestic only Domestic and cross-border Account Structure BBAN (Bank sort code/branch code/account number) BIC and IBAN It is recommended that corporates convert BBAN to IBAN. Alternatively, J.P. Morgan can convert the BBAN to a SEPA-compliant IBAN. IPSO STD18 XML ISO No need to modify current format; J.P. Morgan will offer file format conversion services for Host-to- Host channels.