On 8 December 2008 EBA CLEARINGs STEP2 SCT Service settled in TARGET2 ASI4 and ASI6 based on a netting module developed by SWIFT.
Settlement takes place on a multilateral net basis amongst all Direct Participants of STEP2 SCT. Based on the bilateral gross amounts established by STEP2, each banks net position is calculated through a new application developed by SWIFT, the Multilateral Netting Module (MNM), which then carries out the interaction process with ASI4.
As of 12 December 2008, STEP2 SCT will as well offer an innovative night-time cycle,which will settle at 1:30 in the morning using ASI6. With this optional third clearing and settlement cycle in STEP2 SCT, EBA CLEARINGs Pan-European Automated Clearing House (PE-ACH) platform pioneers a night-time settlement application for the ACH and SEPA world. A similar cycle had previously been available as a purely domestic and multilateral functionality in Finland but not at a pan-European level.
From 12 December 2008, 114 Direct Participants representing more than 5,280 financial institutions will be able to exchange payments via STEP2 SCT in two processing and three settlement cycles per day.
The Multilateral Netting Module (MNM), which serves as an interface between the STEP2 platform and the TARGET2 Ancillary System Interface (ASI), was delivered and implemented by EBA CLEARING in co-operation with SWIFT as a generic netting service that can be used as a liquidity-saving device in various contexts.
STEP2 continues to consolidate its position as the PE-ACH of the European payments industry: the STEP2 SCT Service currently extends reachability to 98.04% of all financial institutions across SEPA that have signed the SCT Adherence Agreement of the European Payments Council (EPC).
We expect that many banks will want to directly settle their SCT traffic using the PE-ACH as part of their domestic migration to SEPA, says Giorgio Ferrero, chairman, EBA CLEARING. We are pleased to support the banks in this migration process by offering them the flexible settlement procedures and options they require for operating in an integrated European payments environment.
We are privileged to have been selected by EBA CLEARING to build and operate their Multilateral Netting Module to the highest level of quality and resilience, says Alain Raes,chief executive, SWIFT, EMEA. Successful delivery of MNM is the result of excellent collaboration between our two organisations and a significant step forward in terms of SWIFT supporting community adoption of SEPA and EU harmonisation as a whole.
L.D.