CHAPS Technical Requirements

Transcription

1 CHAPS Technical Requirements 1. Technical Overview CHAPS provides a payment system between its Members settling in real time across sterling settlement accounts at the Bank of England. The key components of the system are: A payment messaging network (SWIFT FIN Copy) connecting the Members of the system. SWIFT interfaces, known as CBTs (Computer Based Terminals), located within Members systems to connect to the network and process messages to and from Member payment systems. The Bank of England s Real Time Gross Settlement (RTGS) system also has a CBT, known as the CHAPS Central Bank Interface, to connect to the network to enable settlement to occur. Settlement accounts denominated in all supported currencies held within the Bank of England s RTGS Processor and the supporting collateral arrangements. An Enquiry Link facility provided by the Bank of England. A real time link to the CREST system for Delivery Versus Payment (DVP). The figure below shows an overview of the business flows for CHAPS. Page 1

2 2. CHAPS Payments CHAPS operates as follows: 1. Payment messages are sent from one Member to another. 2. The messages are stored within FIN Copy pending settlement confirmation by the Bank of England. 3. A subset of the message containing just the information required for settlement is sent to the Bank of England. 4. Once the payment is settled at the Bank of England, a confirmation is returned and the entire payment message is forwarded to the receiving Member. Finality is achieved when the payment is settled. 5. The receiving Member processes the payment as required. The FIN Copy service provides the transport network for the system and the message handling functionality required to convey settlement subsets to (and receive settlement confirmations from) the RTGS system. 3. Roles and Responsibilities The key business and operational decisions about a payment system relate to how it is governed and how its rules are defined. The CHAPS Clearing Company is responsible for these areas as far as the payment system is concerned, together with the provision of the payment messaging network, which is provided under contract by SWIFT. The Bank of England controls the settlement accounting processes within its own systems and is responsible for the RTGS Processor and the CHAPS Central Bank Interface. The Bank is also responsible for the provision of Enquiry Link facilities. CHAPS Members are responsible for managing their payment flows and maintaining their settlement account balances at the Bank of England. They are also responsible for the ownership, operation and maintenance of their interfaces to the CHAPS network. 4. Settlement Each CHAPS Member holds a sterling settlement account at the Bank of England within the Bank s RTGS Processor. Page 2

3 5. Business Day Definition The business day follows the following processing cycle: 1. RTGS opens for business 2. Intra-day repurchase transactions and any other pre-business day transactions are initiated between the Bank of England and CHAPS Members. These provide liquidity for the sterling settlement accounts for those CHAPS Members. Automated transfers are also made from the settlement accounts used for payments to settlement accounts used for DVP. 3. CHAPS opens for business. 4. Intra-day payments are made. 5. CHAPS closes for normal payments. 6. At the end of the CREST settlement day the balances on the CREST settlement accounts are automatically returned to the payment settlement accounts. 7. Balancing payments are made between Members. 8. CHAPS closes for business. 9. Intra-day repurchase transactions are terminated. 10. Close of Day. 6. Payment Queuing and Scheduling CHAPS Members must use the central scheduling facilities provided by the Bank of England. To assist Members management of their settlement accounts and payment streams the Bank of England sends Members non-payment messages informing them of any change in funds available resulting from any non-chaps movements across their accounts. 7. Member Interface Each CHAPS Member is required to have a SWIFT interface capable of processing FIN Copy messages. Page 3

4 A Member may choose to locate its payment process and CBT wherever it wishes (not necessarily in the UK), as long as they meet the technical and operational requirements of CHAPS. This means that true remote access is allowed in CHAPS. 8. Bank Identifier Codes (BICs) The preferred branch identification method used in CHAPS for domestic payments is BICs. However, UK Sort Codes are supported in most domestic payment message formats if no BIC is available. 9. CHAPS Components Key: Member A SWIFT Responsibility Member Responsibility Webstation SNL-J RTGS Responsibility CHAPS Responsibility Payment Process Link Interface FIN Service sdas FIN Copy CUG Member B Webstation SAG Link Interface Payment Process Bank of England Central Institution Interface CREST RTGS Processor Enquiry Link Page 4

5 10. Member Payment Process and SWIFT Interface Each CHAPS Member is responsible for providing its own payment process and for interfacing this payment process to the SWIFT network via a SWIFT computer based terminal (CBT). In this context, the Bank of England is itself a CHAPS Member, with its own payment process and CBT. CHAPS supports two types of SWIFT payment (one customer payment type and one interbank payment type). These are the MT103 single customer credit transfer, and the MT202 general financial institution transfer. A Member s payment process is responsible for the creation of outward payment messages and for the receipt and processing of inward payment messages. Whilst in theory the payment process could be manual, using terminals and printers attached to the SWIFT CBT, it is expected that all CHAPS Members will use an automated payment process on computer equipment with a real time link to the SWIFT CBT. The design of a Member s payment process is solely a matter for the individual Member. However, CHAPS provides a central scheduler within the RTGS Processor which Members must use. A Member s system must strictly adhere to the messaging standards set out in this Functional Specification. CHAPS Procedural Documentation specifies what a Member should do if he receives a message which does not comply with the standards. Each Member is responsible for providing a SWIFT CBT to interface its payment process to the SWIFT network. The CBT must be capable of supporting the SWIFT FIN Copy service. A Member will be able to use his existing CBT to access CHAPS, provided this has the required FIN Copy capability. Alternatively, a Member may choose to have a separate CBT for CHAPS. If a Member chooses to have a separate CBT for CHAPS, the Member may wish to register a new 8 character SWIFT destination address for CHAPS, but this is not mandatory. When a CBT is logged on to the SWIFT network it identifies itself with a destination address modified by a character (Logical Terminal) which must be unique for each CBT which is logged on to the SWIFT network at the same time. The facilities which SWIFT provide to allow Members to control how incoming SWIFT messages are to be delivered to each such destination are based upon: the message type/category the message priority the FIN Copy Service Identifier. In either event, the Member must ensure that his CBT : has sufficient capacity to handle his expected CHAPS message traffic Page 5

6 has sufficient resilience to cope with equipment failures. Each Member must define the (8 character) SWIFT destination address(es) which he intends to use within CHAPS. These are needed: by SWIFT, to set up the Closed User Groups for CHAPS by the Bank of England, to allow validation in the RTGS Processor. A Member may have more than one (8 character) SWIFT destination if he wishes (up to a maximum of 99), but will only have a single settlement account on the Bank of England s RTGS Processor. Also, a Member with more than one SWIFT destination for CHAPS must inform the Bank of England which of the destinations is to be used for non-payment SWIFT messages from the RTGS Processor. Where a Member has more than one (8 character) SWIFT destination, other Members may address CHAPS payments to any of the destinations and are under no obligation as to which destination to use for a particular payment. A Member may define branch codes for his (8 character) SWIFT destinations. Members may use their existing SWIFT destination addresses for CHAPS, or register new addresses with SWIFT if they prefer. -ooooooo- Page 6