Liquidity Management - Functional overview (Features in T2 and T2S to manage liquidity incl. T2S Interface in T2)

Transcription

1 Liquidity Management - Functional overview (Features in T2 and T2S to manage liquidity incl. T2S Interface in T2) Information event for future DCA holders, 16 Dec 2013 Siegfried Vonderau, 3CB/4CB 1

2 Features in T2 and T2S to manage liquidity Functional and technical aspects 1 Overview 2 T2S Interface and its features in T2 3 Basics about T2S liquidity transfers 4 Information about liquidity transfers monitoring functions 2

3 Integrated settlement in T2S T2 as liquidity provider for euro cash Securities SETTLEMENT INSTRUCTIONS CeBM TARGET2 CeBM CSD A Accounts CSD A T2S SETTLEMENT ENGINE Accounts Central Bank A Accounts Central Bank A Central Bank A CSD B Accounts CSD B Accounts Central Bank B Accounts Central Bank B Central Bank B CeBM CSD C Accounts CSD C Accounts Central Bank C Accounts Central Bank C Central Bank C T2S Non - RTGS 3

4 Communication with T2S via T2S Interface - T2: Communication via a new interface in T2 (T2SI) - T2 - T2 customers: A2A, GUI (U2A) or FIN MT - T2 T2S: usage of ISO20022 standard messages including business application header (BAH) - T2S T2S Actors: Via licensed Network Service Providers (NSPs), i.e. VAN: A2A and (GUI) U2A A2A ISO Messages U2A Access via T2S GUI SWIFT / SIA-Colt T2S Actor 4

5 Features in T2 and T2S to manage liquidity Functional and technical aspects 1 Overview 2 T2S Interface and its features in T2 3 Basics about T2S liquidity transfers 4 Information about liquidity transfers monitoring functions 5

6 T2S Interface in T2 (T2SI) T2S Interface in T2 (T2SI) will technically connect the eurodenominated DCAs in T2S with the RTGS accounts in T2 - New dedicated interface specially designed for T2S (T2 release 7.0) - T2SI provides features for shifting easily and quickly liquidity from RTGS accounts to dedicated cash accounts (DCAs) and vice versa Mandatory functionality (core services) - Focusing on liquidity management with T2S for T2 direct participants having migrated to the XML message standard required by T2S Optional value added services - Envisaged for those T2 direct participants having not migrated to the new XML message standard (still using legacy standards). The value added services are only provided as whole package and priced separately. 6

7 T2SI core (mandatory) services Current order liquidity transfer ("push") to T2S (via XML/A2A and ICM/U2A) Standing order liquidity transfer to T2S Current order liquidity transfer ("push") to T2S by so called "T2S Actor in T2" (via XML/A2A) Debit notification (on optional basis) for liquidity transfer ("push") provided as FIN MT, XML/A2A: - Current order (initiated via ICM/U2A or by T2S actor in T2) or via - Standing order Credit notification (on optional basis) on incoming liquidity transfer from T2S (FIN MT, XML/A2A, ICM/U2A) 7

8 T2SI core service liquidity transfer to T2S Flow of current order liquidity transfer to T2S initiated via XML message by T2 account holder 8

9 T2SI core service liquidity transfer to T2S Flow of standing order liquidity transfer to T2S Predefined in T2 static data (execution: start of business day) 9

10 T2SI core service liquidity transfer to T2S Flow of current order liquidity transfer to T2S initiated by "T2S Actor in T2" - To be authorised by the T2 participant 10

11 T2SI core service incoming LT from T2S Flow of incoming liquidity transfer initiated in T2S (during the day or end-of-day) - Credit notification (on optional basis) via MT 202 or XML (camt.050) 11

12 T2SI value added services Current order liquidity transfer ("push") via SWIFT FIN message MT 202 Current order liquidity transfer ( pull ) from T2S DCA to RTGS account (FIN MT, XML/A2A, ICM/U2A) T2S DCA intraday balance - Monitor the balances of the T2S DCA accounts linked to the RTGS accounts directly in ICM (U2A) or - Request the DCA balance via XML message (A2A) 12

13 T2SI value added service pull liquidity Flow of liquidity transfer from T2S initiated in T2: pull liquidity via XML message 13

14 T2SI value added service pull liquidity Flow of liquidity transfer from T2S initiated in T2: pull liquidity via MT message 14

15 Failed liquidity transfers features in T2 Abnormal situations in processing liquidity transfers sent from T2 to T2S and available procedures - Negative functional ACK (Receipt camt.025) - Automatic reversal booking - Missing functional ACK (Receipt camt.025): - Manual resend of liquidity transfer - Simulate missing positive ACK - Simulate negative receipt, i.e. manual reversal booking via ICM - Technical NAK - negative ReceiptACK (admi.007) - Resend of liquidity transfer - Manual reversal booking via ICM - Note: in all these "abnormal situations" a broadcast will be sent to T2S transit account holder (ECB) 15

16 Features in T2 and T2S to manage liquidity Functional and technical aspects 1 Overview 2 T2S Interface and its features in T2 3 Basics about T2S liquidity transfers 4 Information about liquidity transfers monitoring functions 16

17 Role of liquidity within T2S Liquidity transfers are needed in order to provide T2S DCAs with liquidity. Injection of liquidity into T2S Start of Day During the Day Use of liquidity within T2S for settlement Reimbursement to the RTGS at the end of day End of Day 17

18 T2S liquidity transfer - definition A liquidity transfer is an instruction to transfer central bank money from an RTGS account to a T2S dedicated cash account (DCA) or vice versa from a T2S DCA to an RTGS account. Under certain rules liquidity transfers are also used to move cash between two T2S DCAs. As a general rule liquidity transfers work only between accounts denominated in the same currency. At the end of day all available liquidity on DCA is transferred to the linked RTGS account ( automated cash sweep ). 18

19 T2S liquidity transfer direction Internal liquidity transfers (T2S DCA T2S DCA) Outbound liquidity transfer (to T2) Inbound liquidity transfer (from T2) 19

20 T2S liquidity transfer execution time Immediate Liquidity Transfers - Immediately executed as soon as the transfer is instructed and entered in T2S Standing Liquidity Transfer Orders - Internally triggered by T2S if a certain business event or time is reached (defined by holder of account to be debited; valid until deletion) - Executed daily each time the business event or time is reached - Either a specified amount or all cash can be transferred Predefined Liquidity Transfer Orders - Internally triggered by T2S if a certain event or time is reached - Executed only the first time the time or business event is reached - Either a specified amount or all cash can be transferred 20

21 T2S liquidity transfers fundamentals Liquidity Transfers T2 RTGS A/C to T2S DCA (Inbound) T2S DCA to T2 RTGS A/C (Outbound) T2S DCA to T2S DCA (Internal) T2S - Partial Execution ** Number of Executions Immediate liquidity transfer order Predefined liquidity transfer order Standing liquidity transfer order YES YES YES* NO** N/A YES NO YES *** YES NO YES As many as needed Only once per DCA per time/event One to many at different points in time/events *) DCAs shall be owned by the same T2S party (or) between DCAs linked to the same RTGS account **) Partial execution can only take place if the instruction is placed by a T2S Actor (i.e. CSD) acting on behalf of an account owner (valid for outbound and internal immediate liquidity transfer orders). ***) Standing order execution in T2 towards T2S only once at beginning of the T2 business day. from T2S perspective considered as immediate liquidity transfer. 21

22 T2S Multiple liquidity provider T2S enables its T2S Actors to receive liquidity from different RTGS accounts (i.e. from different liquidity providers) to a single T2S DCA. The multiple liquidity provider functionality can be used to automatically retransfer the liquidity remaining at the end of the night-time settlement phase from the T2S DCA of the T2S Actor to the RTGS accounts of its liquidity providers. 22

23 T2S Multiple liquidity provider Automatic retransfer of the remaining liquidity on the T2S DCA to the respective RTGS accounts at end of night time settlement (defined in T2S static data) 23

24 Features in T2 and T2S to manage liquidity Functional and technical aspects 1 Overview 2 T2S Interface and its features in T2 3 Basics about T2S liquidity transfers 4 Information about liquidity transfers monitoring functions 24

25 Features of T2S Liquidity monitoring Liquidity monitoring enables T2S Actors to receive information available with relation to T2S DCAs, especially - Settled amounts - Cash Balances - Blocking and reservations - Exceeding thresholds Notifications Reports Queries T2S Liquidity Monitoring 25

26 T2S liquidity monitoring 26

27 T2S liquidity DCA balance GUI screen: T2S DCA balance details 27

28 Features of T2 liquidity monitoring Notifications about debits of liquidity transfers from T2 to T2S (core service) - Initiated via ICM/U2A - Initiated via standing order - Initiated by authorised "T2S actor in T2" Credit notifications about incoming liquidity transfers (from T2S) (core service) ICM/U2A liquidity information screens (value added service) - Current liquidity RTGS account - Current liquidity linked DCAs 28

29 Features of T2 liquidity monitoring Display current liquidity RTGS account (value added service) 29

30 Features of T2 liquidity monitoring Display Current Liquidity on Linked DCAs (value added service) - Function available for single participants and - Group of accounts (GoA) manager 30

31 Reference documents More detailed information can be found in - T2 UDFS v7.2: - Chap 2.9 Interconnection with TARGET2 Securities - T2 UHB v7.0 - T2S key documents UDFS v T2S UHB v1.0 - T2S Connectivity Guide v1.0 31

32 Thank you for your attention