TARGET 2 MARKET PARTICIPANTS VIEWS

Transcription

1 D0509A 2012 FEDERATION BANCAIRE DE L'UNION EUROPEENNE TARGET 2 MARKET PARTICIPANTS VIEWS By Patrick Poncelet TWG Secretariat 1

2 AGENDA 1. ISO20022, SEPA REGULATION, SCT STREAM IN TARGET2 2. INTERDEPENDENCIES BETWEEN T2 AND T2S 3. SSP RELEASE 6.0 2

3 1. ISO 20022, SEPA REGULATION, SCT STREAM IN TARGET2 Support for migration of T2 messaging to an ISO syntax as a long term strategic objective Need for detailed risk assessment, technical analysis and cost benefit analysis Need for coordinated and synchronized implementation at global level to ensure crossborder interoperability and harmonisation Support for the SWIFT research work on migration and coordination efforts No justification of introduction of the SCT stream in T2 given the exclusion of the credit transfers in LVPS from the scope of the SEPA Regulation SCT designed for bulk payments and is not suitable for T2 designed for large value individual payments SCT is governed by set of specific rules subject to EPC Governance requiring adherence to the EPC scheme SCT is subject to a specific ISO20022 syntax that is different from the full ISO XML syntax Possible coexistence of three different streams (FIN, SCT and ISO XML) in T2 during transitional period 3

4 2. INTERDEPENDENCIES BETWEEN T2 AND T2S Issues arise as T2S is designed to use ISO standard while T2 will still be using FIN messages when TS goes live Need for coordination with cash representatives Liquidity managers and treasurers require access to T2S for cash information. Change requests developed in conjunction with TWG to facilitate such access are subject to further industry consultation given that they are likely to be at a cost to the users socalled Value Added Services Need for liquidity managers to easily identify any DCA accounts. It seems a solution based on T2 model where the PM account holders will be able to define a set of characters at the end of the account number may be possible Need to protect dedicated customers funds from automatic rebalancing functionality. A solution seems to lie in the usage of a different 11 character BIC for DCA accounts containing client funds given that the rebalancing will be performed by reference to the BIC 11, ignoring the DCA account number 4

5 3. SSP RELEASE 6.0 The release includes change requests addressing issues arising when a T2 participant suffers a major outage and cannot send payments until the following business day Importance of understanding the functionalities the T2 system offers and processes that should be in place in case of a T2 participant s outage that could to a large extent mitigate the systemic risk associated with liquidity gridlock and significantly increase the resilience of the T2 system The TWG envisages separating redistribution of liquidity from the execution of the delayed payments Set of two complementary change requests suggest to switch off the back value check with immediate effect and blocking back value payments to banks for whom receipt would cause difficulties Non implementation of CR 577 will cause problems for banks that are technically unable to process back value payments through TARGET2, which is an issue already today. Request to reconsider the decision of non implementation of optional blocking of backvalue 5 payments

6 CONCLUSIONS MIGRATION TO ISO20022: very complex, deep implications for participants in T2 more than on central system! Requires in depth co decision with users INTERACTION T2 T2S: impact of TS on payments & cash management infrastructure calls for direct contact between T2S project team and treasurers/cash representatives (DCA numbers, rebalancing, access to T2S for cash information) SSP RELEASE 6.0: small release but need for comprehensive solution in case of outage of major T2 participant 6