v. kulipanov3 irsf, londonapril 16, 2008 1 besp settlement system recent developments and progress...
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V. Kulipanov 3 IRSF, London April 16, 2008
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BESP settlement system
Recent developments and progress report
3 IRSF, London,
April 16, 2008
V. Kulipanov 3 IRSF, London April 16, 2008
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General characteristic of BESP
• Voluntary participation;
• Gradual introduction;
• Real Time Gross Settlement system;
• Some liquidity saving features, generally attributed to Net Settlement systems;
• Centralization at the federal level.
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Information on the Web
The relevant information about BESP settlement system, applicable regulations and statistics will be available in the “English” part of Internet site www.cbr.ru in mid May 2008.
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Options of membership
• Special participation
• Direct participation
• Associated participation
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Options of membership
• Special participation
• Direct participation
• Associated participationCBR Head Office
BESP system
CBR Branches
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Options of membership
• Special participation
• Direct participation
• Associated participationCBR Head Office
BESP system
CBR BranchesBank DSP
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Options of membership
• Special participation
• Direct participation
• Associated participationCBR Head Office
BESP system
CBR BranchesBank DSP
Bank ASP
Non-bank ASP
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UFEBM
BESP
CBR Transport system
CBR Transport system
DSP
ASP
DSP
ASPDSPDSP
SWIFT transport
SWIFT transport
SSPSSP
ConversionSWIFTformats
UFEBM
V – scheme
Transport
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Functions of Central Bank in BESP
Regulator and oversight authority
Operator User
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Time scheduleUntil BESP was implemented
Interregional Settlement System
$
Bank
$
Bank
Up to 2 days
7 56
121110
8 4
21
9 3
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Time scheduleAfter implementation of BESP
Core of BESP system
$
Bank
$
Bank
$
Bank
• System runs in Real time
• Unified Schedule for all time zones
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Three phases of BESP business day
08-00 09-00 21-00 21-30
Preliminary phase Regular phase
Final phase
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Preliminary phase
• Updating regulatory and reference information;• Registration /exclusion/ temporary suspension of BESP participants;• Initial liquidity setting in BESP by DSP• Setting (multilateral, bilateral, etc) limits to benefit from liquidity saving mechanism
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Regular phase
•Payment acceptance and processing;•Queue maintenance and management;•Information exchange with BESP participants;•Liquidity management by DSP;•Temporary suspension/release of DSP participation by CBR.
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Final phase
•Daily completion of BESP settlement;•Generation and transmission of statements and reports to BESP participants;•Generation and transmission of output report to the General Ledger;• Information archiving.
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Views on DSP liquidity
En
tire
liq
uid
ity
of
DS
P
Ava
ilab
le li
ne
of
ove
rdra
ft c
red
it
Acc
ou
nt
bal
ance
Total liquidity
Liq
uid
ity
for
BE
SP
Liq
uid
ity
for
Lo
cal P
S
Acc+Ovdrft BESP+LocalPS
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Liquidity bridgebetween BESP and Local payment system
Liquidity in BESPLiquidity in Local PS
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Liquidity in BESPLiquidity in Local PS
Liquidity bridgebetween BESP and Local payment system
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Single transaction Business process
• Technical checks.
• Logical checks.
• Liquidity sufficiency check (Queue).
• Payment settled. Finality and irrevocability.
• Synchronization request from BESP system to accounting systems.
• Debit/Credit confirmation.
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Queuing in BESP
Ordinary payments
Time-critical paymentsThis payment will be
processed first
This payment will be processed only after all time-critical
payments are settledThis payment will be processed last
This payment will be settled before any ordinary
payment is processed
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Queuing in BESP
Ordinary payments
Time-critical payments
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Queuing in BESP
Ordinary payments
Time-critical payments
Set-off
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Queuing in BESP
Ordinary payments
Time-critical payments
Set-off
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Queuing in BESP
Ordinary payments
Time-critical payments
Set-off
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Queuing in BESP
Ordinary payments
Time-critical payments
Set-off
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Queuing in BESP
Ordinary payments
Time-critical payments
Set-off
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Queuing in BESP
Ordinary payments
Time-critical payments
Optimization
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Queuing in BESP
Ordinary payments
Time-critical payments
Optimization
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Queuing in BESP
Ordinary payments
Time-critical payments
Optimization
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Queuing in BESP
Ordinary payments
Time-critical payments
Optimization
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Queuing in BESP
Ordinary payments
Time-critical payments
Optimization
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Queuing in BESP
Ordinary payments
Time-critical payments
Optimization
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Queuing in BESP
Ordinary payments
Time-critical payments
Optimization
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Queuing in BESP
Ordinary payments
Time-critical payments
Optimization
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Queuing in BESP
At the end of day all payments in queues are
automatically cancelled !
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Information services for DSP
• Results of processing of the recently input document;
• Debit/Credit confirmation based on the recently input document
• Final daily statement
Without request On request
• Correspondent account balance;• BESP Liquidity statement;• Total overnight line of credit, and it’s
available value;• Aggregated value of incoming payment
orders in the queues of other DSP Banks• Liquidity statement for affiliates• Intraday statement• … and some other minor issues…
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New business opportunitiesthat were enabled by BESP
• Extension and unification of business day schedule throughout entire territory of the country, which result in acceleration of payments, stop discrimination of banks on “the geographical” basis;
• Concentration of liquidity flows over nostro accounts of Direct participants, who may now provide their fast payment services to non-member banks.
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Joining BESP membership
• How to apply. Where to apply.• Requirements to be met by applicant.• Terms of expected reply.• Necessity of pilot run.• Self-evaluation act for security recommendations
of CBR.• Terminal of DSP. Functionality and integration.• Available STP features.
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BESP tariffs
• 25 RUR per ordinary payment• 30 RUR per time-critical payment
Applicable to Direct Settlement Participants
Applicable to Associated Settlement Participants
• 20 RUR per payment
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Pattern of Contracts
Bank DSP
Amendments toBanking AccountContract
Amendments toTechnical interfacesContract
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Launch Date of BESP
•July 1, 2007.All regulated documents were adopted and became effective by that date. Technical preparations were finished. The first participants were in. The system started, however there were no payments until…
•December 21, 2007The first few payments came through.
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BESP in figuresQuantity of Direct, Associated and Special participants.
0
20
40
60
80
100
120
140
160
Dec2007
Jan2008
Feb2008
Mar2008
Presenttime
Special Participants
Direct Participants
AssociatedParticipants
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BESP in figuresVolume and total Value of payments.
110
1001 000
10 000100 000
1 000 00010 000 000
100 000 0001 000 000 000
10 000 000 000
Dec2007
Jan2008
Feb2008
Mar2008
PresentTime
Value
Volume
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There were 161 payment instructions in BESP since Dec 21, 2007 up to April 11, 2008
A.S.P. (banks) -17; (10,56%) A.S.P. (affiliates of
banks) -12; (7,45%)
D.S.P. (banks) -78; (48,45%)
D.S.P. (others) -1; (0,62%)
D.S.P. (affiliates of banks) -
53; (32,92%)
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BESP in figures Comparison of active participants to their total quantity
0
5
10
15
20
25
D.S.P. (banks) D.S.P. (affiliatesof banks)
D.S.P. (others) A.S.P. (banks) A.S.P. (affiliatesof banks)
active total quantity
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BESP in figures
• The average daily value of liquidity in the system was 92 mln. RUR
• The average processing time of single transaction is 30 seconds.
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BESP Pilot Run
• BESP Pilot Run continues even after the system itself was successfully launched on Dec 21, 2007. The reason is to provide testing facilities to new prospective BESP participants.
• BESP Pilot Run provides entire collection of BESP services, that are available in the real system.
• BESP Pilot Run is performed in the real-time manner, where the prospective participants experience liquidity control mechanisms, Limits control mechanisms, Queuing control mechanisms, and, of cause, try sending and revoking their payment instructions.
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By the date April 11, 2008 BESP Pilot Run was covering 55 regions of Russian federation, located in 11 time zones. The overall amount of registered participants totals to 698, including:
D.S.P. S.S.P.A.S.P.
Banks others
302 153 160 83
BESP Pilot Run
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The future possible participants
• MICEX Settlement House and National Clearing Centre to join BESP;
• Anticipating for SBERBANK to come during 2008;
• Estimates for Critical quantity of members to join BESP.
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The future possible participants from top 30
• Citibank• Zenit• Transcreditbank• Russian Standard• Promsvyazbank• Micex Settlement
House
• Petrocommerce• Raiffeisenbank• Uralsib
Already BESP members
• GasprombankPilot run completed
CBR consent received
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What’s next?anticipated and discussed steps
• Extending the schedule to enable almost non-stop operations during the business week.
• Introduction of obligatory membership in BESP for banks;
• Introduction of Max cap of payment for local Payment Systems when every bank joins the BESP system;
• Tariff policy encouraging the use of BESP.
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Thank you for attention!
Questions welcome!