Report of the Board EBA CLEARING Shareholders Meeting 23rd May 2013 Contents
1. Introduction: Letter from the Chairman 3
2. The Company’s activities in 2012 7
2.1 EURO1/STEP1 Services 7 2.2 STEP2 Services 12 2.3 Operations of the clearing systems 20 2.4 Resilience, Business Continuity and Incident Management 23 2.5 Risk Management 24 2.6 MyBank initiative 28 2.7 Activities of Board Committees 34 2.8 Corporate matters 37 2.9 Financial situation 40
3. The Company’s activities in 2013 45
3.1 EURO1/STEP1 Services 45 3.2 STEP2 Services 48 3.3 Operations of the clearing systems 53 3.4 Internal Audit, Resilience, Business Continuity and Incident Management 54 3.5 MyBank initiative 55 3.6 Other relevant matters of interest 56
Appendix 1: List of participants in EURO1/STEP1 57 Appendix 2: List of direct participants in STEP2 64 Appendix 3: Annual accounts for 2012 73
layout: http://www.quadratpunkt.de
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 2 1. Introduction: Letter from the Chairman
Dear EBA CLEARING Shareholders and Friends,
Over the past year, EBA CLEARING has added another chapter to its corporate success story. A large number of steps were taken to ready the services of the Company for the current and upcoming challenges facing the industry and to optimally support our users in dealing with these challenges. And in this year of the great rush towards the SEPA instruments, there is more in our delivery pipeline in terms of additional service functionality, processing enhancements and risk mitigation features.
If you only take into consideration the evolution of the STEP2 platform over the past two years, you already get an impressive picture of progress made for the benefit of our user community. But since 2013 marks the end of my third term as a Chairman of the EBA CLEARING Board, allow me to take you on a journey that goes back much further in time, to the beginning of my Chairmanship nine years ago. Let us look back for a moment and measure the long way we have come since.
When I was first elected Chairman at the Shareholders Meeting of 2004 in Budapest, the only service running on the one-year-old STEP2 platform was a euro mass payment service for cross-border transactions called STEP2 XCT. This service had one overnight cycle that settled in EURO1/STEP1 and witnessed its first file exchange in XML syntax only a couple of weeks prior to the 2004 Share- holders Meeting. STEP2 XCT handled on average 100,000 payments per day and counted around 50 participants. It did, however, already extend full reach to banks across 14 European countries through the entry point arrangements that had been put in place.
Since 2004, the Company has developed and implemented on the STEP2 Plat- form three SEPA Services, SCT, SDD Core and SDD B2B, in close cooperation with the service users and always right on time for the launch of the respective SEPA Schemes. The Company also put in place two services for legacy transac- tions in Italy and Ireland, which these communities have been using as stepping stones for eventual migration to the SEPA Services. Two national communities, Finland and Luxembourg, have already completed the migration of their domestic volumes to the STEP2 SEPA Services.
Today, the STEP2 SEPA Services settle in TARGET2 and the SCT Service alone counts six settlement cycles a day. The STEP2 SEPA Services extend reach to over 4,700 financial institutions in all 32 SEPA countries. On average, the platform processes over 5 million transactions per day, with SCT having witnessed a peak day with 7 million payments in early April.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 3 The senders and receivers of very large domestic volumes that will start to move these payments to STEP2 later this year will have at their disposal state-of-the art batch processing modes in both SCT and SDD, which will offer very efficient features such as a central matching of R-transactions at platform level. From the third quarter 2013 on, our service users will be able to connect to STEP2 via SWIFTNet, SIANet and EBICS and will benefit from an even more robust infra- structure with three processing sites, complying with the highest resilience levels.
But let us return to the past, for a closer look at EURO1, which was already a well-established large-value payment system in 2004. Thanks to its unique legal basis called the Single Obligation Structure, EURO1 achieves intraday finality of each individual payment message upon processing of the payment message and thus qualifies as a RTGS-equivalent net settlement system, generating signifi- cant liquidity savings for its participants.
This liquidity-saving capacity has been continually enhanced by the Company over the years and experienced a considerable boost through the introduction of the Flexible Settlement Capability (known as the Liquidity Bridge) in 2006. It provided the participants with intra-day pre-funding and liquidity distribution capabilities, allowing the banks to better control their payment flows and to optimise the recycling of their liquidity in the system. Between 2006 and 2011, the number of intra-day liquidity distribution windows was increased from the initial two to six.
In order to support the participants in managing and monitoring their payment flows, the Company introduced in 2006 a monitoring and reporting tool opera- ting in real time, the Interactive Workstation. The intraday liquidity savings that EURO1 allows its participants to generate for their euro payment business turned the platform into a particularly valuable tool during the first peaks of the financial crisis that started in 2007. Against this background, EBA CLEARING continued to take further steps towards improving the liquidity efficiency of the system: in 2009, the distribution algorithm of the system was enhanced, which brought up the distribution of pre-funded amounts to almost 98 percent.
The success of these liquidity saving measures is reflected in the usage of the EURO1 system, which saw new volume records in 2012 and, also thanks to the EURO1/STEP1 Directory introduced in 2009, enables banks to address more than 26,000 BICs across and beyond Europe.
Risk mitigation has become another key focus in relation to EURO1 in the recent years. As part of the EURO1 Review and Reform Program started in 2011, a number of measures have been implemented to enable banks to more actively manage and reduce their counterparty risk towards the other participants.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 4 In a phased approach completed last year, the mandatory element of the bilateral limits that EURO1 Banks have to extend to every other participant in the system was reduced from EUR 5 million to EUR 1 million. At the same time, the maxi- mum discretionary element of the bilateral limits was raised from EUR 25 million to EUR 50 million. Banks are now able to distribute the limits required to generate liquidity for their payments more in accordance with their own credit risk policies.
Work on risk mitigation issues continues, especially in the light of the new regula- tory requirements that are currently in the process of being formally established. EBA CLEARING is committed to further evolving the EURO1 platform in close consultation with its participants – a Risk Managers’ Forum has just been created to further intensify this exchange.
The above-mentioned milestones have been meant to provide you with an exemplary overview of the services and service enhancements delivered by EBA CLEARING since 2004. Those of you who participated in this evolution, who contributed through working groups or steering groups to the major assessment, consultation, implementation and testing processes that each of these deliveries involved, will have their own very precise memories of the efforts they required and the added value they have delivered.
It would have been understandable if EBA CLEARING had stuck to merely enhancing its existing services over the last year or two after the deployment efforts of the previous years. But this is not what we chose to do. Instead, we set out to explore new territory and extend the benefits of SEPA to the world of e-commerce.
Less than two years after we announced the start of our e-services initiative at EBAday in 2011, our e-authorisation solution MyBank was launched this March with 28 participants. Sixteen additional financial institutions have signed up for the second joining window and the solution is scheduled to be available through- out Italy by the end of the year. The Europe-wide deployment of this solution, which has been warmly welcomed by e-merchants and other stakeholders, is expected to gradually follow over the next few months and years.
The success story of EBA CLEARING does not end here. The Company will continue to take the responsibility of being a unique, privately owned provider of pan-European payment infrastructure services very seriously. Together with our banks and partners, we will keep ensuring the smooth operation of our payment systems and will continue to enhance our existing services and develop new ones in line with the evolving needs of our users in a truly integrated SEPA envi- ronment.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 5 Much has changed since 2004, the year we celebrated the joining of the “New EU10 Member States” and the EPC issued its “Impact Paper towards PE-ACH” and approved its “Roadmap 2004-2010”. EBA CLEARING grew from 43 to 73 employees during this period; we developed our organisational structure, crea- ting an Investigations and Customer Support Unit under Operations, a Business Continuity and Information Security Management Unit, a Legal & Compliance Department, a Project Management Office, a Marketing Coordination Office, a Chief Risk Officer position and an Internal Audit Department. And we opened representative offices in Frankfurt (in 2005) and in Milan (in 2008).
But, as the deliverables mentioned earlier do testify, the Company has not lost any of its pioneer spirit or agility, and it has even further expanded its capability to foster co-operation in the payment infrastructure space and onboard banks and partners on the journey towards European integration. And in the storm of the very complex payment market situation that we all have experienced in the last five years, EBA CLEARING has always been and I trust will continue to be a clear light to help us all in this journey.
I think nobody can deny the great value of biodiversity on Earth. In the trans- action business, the country-neutral nature of your Company continues to enable synergies stemming from the biodiversity of different regions, areas, ideas and practices, up to the point where what Yesterday was a point of difference Today can be recognised as a value for the common good.
Finally, let me express a big thank-you to every single person of my Staff in the Bank, to every Member of the Board, to the Staff and the Executives of EBA CLEARING – with my special thanks to Gilbert Lichter – and to you, the Share- holders and Users. I would further like to thank our Technology Partners for the quality of their services and their support to us. I would also like to express my appreciation to the Overseer and Regulators for the constructive dialogue we were able to entertain throughout the years.
During these nine years, all of you have helped, challenged, supported and encouraged me in my role of Chairman, always reminding me that Europe cannot be just something a bit bigger than our own individual countries but rather a new dimension that belongs to us all.
Giorgio Ferrero
Chairman EBA CLEARING
Paris, 29th April 2013
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 6 2. The Company’s activities in 2012
The period under report is 1st January 2012 to 31st December 2012.
2.1 EURO1 / STEP1 The year 2012 saw the best results ever for EURO1 in terms of volume throughput. Services The monthly traffic throughout the year was higher than in the previous peak year of 2008. With the onset of the financial crisis it has taken four years for traffic volumes to effectively recover. The average daily volume for the year 2012 was 242,179 for EURO1 and 260,765 for the EURO1/STEP1 system as a whole.
For the month of April 2012, there was a new peak of 287,527 daily average pay- ments in EURO1/STEP1, which surpassed the previous record of 282,840, which had been established in December 2011. On Tuesday, 10th April 2012 (the first business day after the Easter holidays), an all-time high in the daily processed volume in EURO1/STEP1 was achieved at 413,758 transactions, the previous all-time high having been 359,099 on 25th March 2008.
For 2012, EURO1 showed above average volume growth year on year at around 10 percent. This compared very favourably to RTGS systems, where on aver- age there had been only a two percent increase in volumes. The market share of EURO1 for the year ranged from 40.5 percent to a peak of 43 percent. For EURO1, the volume increase is mainly due to the closedown of the STEP2 XCT Service in December 2011 and the resultant migration of non SEPA-compliant payments. EURO1 has become the default routing channel of choice for such payments.
2.1.1 Eurozone crisis
Unfortunately, the Eurozone crisis continued to reverberate across the financial industry as a whole. EBA CLEARING continued to monitor events on the highest level of alert. The Company’s tested its emergency procedures and the crisis management arrangements in place have proven to be a good foundation for monitoring and handling critical events. The Company assesses on a regular basis, in a close dialogue with the Board Risk Committee, the procedures and arrangements in place to determine whether enhancements and evolvements need to be considered. Unrelated to the crisis, and to ensure processes stay in line with technological developments, a project had been started in the course of 2012 to automate a number of communications and operational controls.
All the Company’s emergency and contingency actions are duly documented as well as discussed with and approved by the Overseer and an informal process of pre-advices in the event of deteriorating circumstances is in place with the European Central Bank (ECB).
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 7 2.1.2 Risk Managers’ Forum
Given the major impact that the new Principles for Financial Market Infrastructures (PFMIs) and a number of parallel requirements will have on the management of risk-related issues both at the level of the EBA CLEARING payment systems and at the level of the users, EBA CLEARING wanted to strengthen its relationships and interaction with the users in the area of risk assessment and risk manage- ment, namely through a standing dialogue between the Company and the Risk Management functions of the user banks. To facilitate this dialogue, the Board decided in July 2012 to create a Risk Managers’ Forum.
The Risk Managers’ Forum focuses on addressing all risk issues related to the EBA CLEARING payment systems, both from a design and procedural point of view; it has been created to look into these matters from the banks’ perspective, the perspective of the payment system(s), as well as from the regulatory and oversight perspective. In this capacity, the forum is geared at establishing a link between the users and the Board Risk Committee as well as the Management of the Company.
2.1.3 EURO1 Reform Program
On 3rd July 2012, following receipt of the nihil obstat from the ECB as Overseer, the amount of the mandatory bilateral limit to be granted was further reduced from EUR 2 million to EUR 1 million, in order to further minimise the counterparty exposure risk in the system, in line with the users’ wishes. Overall, the mandatory bilateral limit was reduced by 80 percent over a period of 14 months from the original EUR 5 million a participant bank had to grant each other participant in the system.
The introduction of the limit change went smoothly and the overall payment flow of the system was unaffected. The payment profiles of the users did not differ in any way. Overall, the system saw a slight reduction in liquidity. A number of banks were active in adjusting their discretionary limits to compensate for the lower mandatory limits. Given the relatively minor amount involved in this second phase of the limit reduction program, compared with phase one (from EUR 5 million to EUR 2 million with a compensating increase in the maximum discretionary limit from EUR 25 million to EUR 50 million), the relative inaction of the users was not surprising.
Throughout the year, EBA CLEARING continued to make presentations both at the individual bank and country levels about how it was addressing risk mitigation issues within the system.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 8 Multiple participants from one banking group
The Company started to look into ways of implementing the risk- and regulatory- driven requirement that banking groups should only have one aggregated risk exposure towards the other participants in EURO1. EBA CLEARING is working towards implementing the objective to change the risk taking in EURO1 towards (mandatory) risk taking on a group as opposed to risk taking on a per participant basis.
Collateralisation requirements
Initial discussions took place on potential solutions for the Cover2 required for collateralisation under the new PFMIs – assuming a Cover2 minimum requirement will be retained for EURO1, which is as yet to be confirmed by the Overseer.
2.1.4 Oversight
A meeting with the Oversight team of the Eurosystem took place on 20th Septem- ber 2012. Oversight of EURO1 continues to be carried out by the ECB as lead overseer with the voluntary participation by Eurozone National Central Banks. Currently, five NCB’s participate in the oversight of EURO1 (Banca d‘Italia, Banco de España, Banque de France, De Nederlandsche Bank and Deutsche Bundes- bank).
The work streams completed throughout the last quarter of 2011 and in 2012 for introducing a risk management framework and function within EBA CLEARING were presented in detail as a follow-up to the outstanding recommendation in the context of the comprehensive oversight assessment of EURO1, which was completed in 2011. In the last quarter of 2011, the internal governance of the Company was evolved to comprise the creation of a Board Risk Committee and an interim Risk Management Task Force tasked with preparing the putting in place of a risk management function and framework for the Company.
During the year 2012, a fully-fledged risk management framework was put in place, and the process to put in place a Chief Risk Officer function was started. The Company decided to create a Risk Managers Forum to ensure a close dialogue with the EURO1 Participants in the specific area of risk management. The Chief Risk Officer of the Company joined as from January 2013.
The implementation of a fully-fledged risk management function within the Company is to evolve the Company’s governance, thereby responding to the
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 9 recommendation stemming from the oversight assessment of EURO1 against Core Principle 10 on Governance, and preparing the Company for compliance with the CPSS-IOSCO Principles for Financial Market Infrastructures as and when adopted by the Eurosystem to form part of the oversight framework for systemically important payment systems.
EBA CLEARING is currently completing a preliminary internal gap analysis for EURO1 against the new PFMIs.
An additional aspect of Oversight has been introduced by the ECB in the area of stress-testing. Details on requirements that would apply to payment systems, in particular TARGET2 and EURO1, will be further elaborated by the Eurosystem.
The ECB also has requested input from EBA CLEARING to a questionnaire on environmental interdependencies, focussed on TARGET2 but including drilling into the contingency arrangements of EBA CLEARING’s service providers.
As a further step towards improving the control of the participants’ performance within EURO1 and to ensure compliance of EURO1 with the expected future requirements for a systemically important payment system under the new PFMIs, EBA CLEARING will introduce a process of self-assessment for its critical parti- cipants. EBA CLEARING has already designated all its participants as critical in view of the end-of-day settlement process.
2.1.5 Participation
With effect from 19th March 2012, National Australia Bank withdrew from the EURO1 system as a participant. At the same time its sub-participant Clydesdale Bank was also withdrawn. On 17th September 2012, Portigon AG (formerly WestLB AG) withdrew as a EURO1 Participant and the BIC WELADEDD became a sub-address under Helaba.
This resulted in 64 participants and 51 sub-participants in the system as at 31st December 2012 compared with 66 participants and 52 sub-participants at the start of the year.
The EURO1/STEP1 Directory project sub-group established under the auspices of the OTC continued its review of how the Directory could be integrated into the SWIFTRef offering. Due to more detailed than expected assessments relating to the functionality, the launch of the Directory slipped from its originally planned launch date of end-2012 to June 2013.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 10 2.1.6 System Developments
On 14th May 2012, the EURO1 system was upgraded to SWIFTNet 7.0 (tech- nical release 12.0). There was a major technical upgrade to the Business Administrator’s Workstation (BAWS) on 18th September 2012.
The functional release 12.1 was successfully implemented on 19th November 2012. The release comprised enhancements to and automation of critical emergency commands used by EBA CLEARING Operations as the Business Administrator.
MX Migration for High Value Payment Systems
The migration of High Value Payment Systems to MX from MT continued to be a key item on the Company’s agenda throughout the year.
For EURO1, the OTC established a small working group to provide user input to the debate, in particular on the following three core questions:
4 Should the MT 400 be continued? (At present there is no equivalent MX message.)
4 Is partial copy to be retained or should there be a move to full copy? (The new InteractCopy, which will be delivered shortly, only operates in full copy.)
4 If MT/MX conversion facilities are planned, where should this conversion process take place? (SWIFT confirmed that it will not be offering a centralised conversion facility.)
SWIFT presented three possible scenarios for EURO1/STEP1 migration:
1. “Big Bang”, where both the EURO1/STEP1 system and all participants move to MX concurrently;
2. “Dual on the edges”, where the EURO1/STEP1 system moves to MX and the participants can send either MT or MX and where the conversion is done in the participants’ SWIFTNet interfaces;
3. “Dual on the edges and central”, where the EURO1/STEP1 system accepts both MT and MX messages by running two parallel services.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 11 EBA CLEARING was invited, in the same way as the commercial banks had been approached, to complete the questionnaire distributed by the ECB on the preferences for MX migration. In particular, this included confirming that EURO1 should migrate at the same time as TARGET2.
During SIBOS, the ECB formally confirmed that the expected migration date for TARGET2, and therefore also for EURO1, would be the November technical release date in 2017.
2.1.7 STEP1
STEP1 continues to see substantially reduced volumes compared to the all-time peaks in 2008. This is principally due to the ongoing consolidation process in the market. Additionally, with the closure of the STEP2 XCT Service, a number of banks withdrew from the system, since they had only connected for the purposes of being able to carry out STEP2 XCT settlement payments. This meant there were 87 STEP1 Banks and 34 STEP1 Sub-Participants at the end of 2012 compared with 92 participants and 43 sub-participants at the beginning of the year.
The STEP1 User Advisory Group met twice during the year in accordance with its mandate. Consideration was given to the possible concept of a unified header tag, to remove the differentiation between “EBA” and “ERP”. On balance, the members were reluctant to make new investments in STEP1, especially as the shape of the system post-SEPA migration needs to be fully understood. Only then could future planning for the system be competently assessed.
2.2 STEP2 Services During 2012, the main activities of the Company regarding the STEP2 Services and platform were based around two key objectives:
1. Preparing STEP2 for the SEPA migration end-date;
2. Readying STEP2 for the massive volume increase that is expected through the Large Volume Exchange program;
3. Maintaining the operational smoothness of STEP2 processing.
These objectives were achieved as further explained within this report.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 12 Enhancements to STEP2 in terms of functionality, performance, pricing and resilience were delivered and planned in close consultation with the users of the system.
During 2012, several major payment banks confirmed their intention to use the STEP2 platform for the exchange of very large volumes of SEPA transactions, which has further enhanced the outlook for the positioning of STEP2 as a key SEPA CSM in the post migration environment.
2.2.1 STEP2 Service overview
Combining ICT, IET, SCT and SDD, STEP2 ensured on average the settlement of over 4.5 million payments per day in 2012, with nearly 6 million payments in December 2012.
SEPA Credit Transfer Service (SCT)
During 2012, traffic increased by 39 percent, reaching a daily average of3.2 million transactions in December 2012.
The number of direct participants grew from 118 to 125.
In the period of January 2012 to January 2013, the following direct participants were connected to STEP2 SCT:
4 BANCA D‘ITALIA
4 BANK OF GREECE SA
4 CASSA DEPOSITI E PRESTITI SPA
4 ERSTE GROUP BANK AG
4 HSBC FRANCE
4 SANTANDER CONSUMER BANK AG
4 UNICREDIT – INTERMEDIARY SETTLEMENT SERVICE
Reach via indirect participants (henceforth called Reachable BICs) remained stable with a total of over 4,600 BICs.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 13 SEPA Core Direct Debit Service (SDD Core)
During 2012, traffic multiplied by four and stood at over 440,000 transactions on a daily average throughout the fourth quarter.
The record month was October 2012 with a daily average of 444,941 trans- actions. September saw a peak day with 978,185 transactions settled.
The number of direct participants grew from 85 to 94.
In the period of January 2012 to January 2013, the following direct participants were connected to STEP2 SDD Core:
4 BANQUE ENI SA
4 BANQUE INTERNATIONALE A LUXEMBOURG SA
4 BNP PARIBAS DUBLIN BRANCH
4 HSBC FRANCE
4 ICCREA BANCA SPA
4 ING LUXEMBOURG SA
4 SANTANDER CONSUMER BANK AG
4 UBI BANCA INTERNATIONAL SA
4 UNICREDIT – INTERMEDIARY SETTLEMENT SERVICE
STEP2 SDD Core provides reach to over 4,200 BICs.
It should be noted that most of the SDD Core transactions are Belgian domestic direct debits. Significant traffic also comes from the migration of a few pioneering corporates outside Belgium using cross-border SEPA Direct Debit as a new way of collecting funds.
SEPA B2B Direct Debit Service (SDD B2B)
The daily average volumes processed in STEP2 SDD B2B increased by 16 percent during the period under report, reaching 8,364 transactions in December 2012. The peak day was 10th September 2012 with 17,111 transactions settled.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 14 Altogether, over 3,300 BICs are registered in the STEP2 SDD B2B Routing Tables.
Irish Transfer Service (IET)
The Irish Transfer Service ran smoothly throughout 2012, each day ensuring the settlement of 700,000 legacy Irish credit transfers and direct debits between the six banks that are direct participants in the service.
IET does not process individual transactions and is built on a bilateral file exchange model, which is a very efficient solution for a domestic service with a small number of counterparties.
Italian Credit Transfer Service (ICT)
Although one of the six ICT Direct Participants is nearing full migration to SCT, volumes in the STEP2 ICT Service remained stable in 2012 in comparison with previous years: over 1.2 million transactions were processed on a daily average each month during the period under report.
The peak day of the year 2012 was on 12th December 2012, when over 3 million transactions were processed in ICT.
In line with the needs of the Italian banking community, the closedown of the STEP2 ICT Service is foreseen for February 2014.
2.2.2 The Large Volume Exchange Program
During 2012, EBA CLEARING ran a program designed to prepare STEP2 for the volumes expected following the migration of domestic traffic to STEP2. The program covered the four areas listed below:
Functionality
A blueprint defining the requirements for SCT and SDD batch processing was completed in April 2012. On 5th July 2012, the LVE solution was presented to all banks interested in sending large domestic volumes via the STEP2 platform.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 15 Based on the blueprint, the enhanced batch processing options in the three services to be implemented in 2013 were agreed by the Board in July 2012.
Performance
From April until July 2012, a performance measurement and improvement program was executed. The capacity and performance of the core system was improved by tuning software and hardware and by introducing more parallel processing in the STEP2 platform.
With the changes made at this time, combined with the scheduled introduction of multiple direct debit notification periods during the day and the introduction of SDD batch processing, STEP2 will be capable of processing over 500 million payments a day, which is more than the total SEPA volume on a peak day.
Pricing
A large volume pricing proposal was developed, which allows users with more than half a million credit transfers and direct debits per day to benefit from more cost effective processing. Banks that remain under this threshold remain unaffected.
Resilience
With the support of Fraunhofer IAO, EBA CLEARING conducted an analysis on the impact that a classification of STEP2 as systemically important would have on the resilience requirements for the platform, both at the level of hardware and human resources. Fraunhofer IAO was also asked to establish the requirements of the potential future LVE user banks in these areas.
Based on the recommendations by Fraunhofer IAO, EBA CLEARING developed a strategy and an implementation plan that includes taking a copy of the STEP2 software and running it on a third site with the same hardware stack but managed independently (hardware resilience). This third site will be in place by the end of 2013.
Furthermore subsequent phases are planned, which allow for
4 embedding local resources that will allow managed operations at the third site;
4 switching operations between operational sites and operational centres.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 16 2.2.3 User engagement
There has been an active and continued dialogue with users throughout 2012.
The SEPA Business Working Group met three times.
The STEP2 Unit was represented at the Operations & Technical Committee and gave updates on planned and ongoing activities twice in 2012 as well as at the first meeting in 2013.
Regular country group meetings were held in:
4 Belgium
4 Finland
4 France
4 Germany/Austria/Switzerland
4 Italy
4 Luxembourg
4 Spain
4 Sweden
4 The Netherlands
4 UK
2.2.4 Service activities
Reducing SDD R-messages
Significant work was done on analysing R-messages in STEP2 SDDand discussing with users in an attempt to reduce the number of unmatched refunds, which cause a great deal of manual processing at the creditor bank.
Good progress was made, and R-message volumes were reduced from 3.3 percent to 2.3 percent, with unmatched R-messages being under 0.1 percent.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 17 Reporting of SEPA statistics
The EPC, the ECB and many banks on behalf of their central banks have requested statistics on direct debit transactions and R-transactions.
A comprehensive monthly report showing data at country level was created, which was distributed for the first time in January 2013.
Local practices
A list of “Local practices in SEPA retail payments” was compiled based on change requests and the ongoing dialogue with the user communities. This initiative responded to concerns that the continued use of a great variety of local practices would de facto undermine the success of SEPA.
A gap analysis with STEP2 was performed in conjunction with the SEPA Business Working Group, comparing STEP2 functionality with common features available at the level of the local legacy systems.
The study showed that STEP2 already supports a wide range of local practices with the Additional Optional Services (AOS) implemented at the level of its SEPA Services. A number of additional local practices were added to the STEP2 port- folio in November 2012 (SDD Core D-1 Scheme Option and Change Account Identification – CAI) and more functionality is scheduled to be added in 2013.
The study also showed that there are local practices that are outside the domain of the Clearing and Settlement Mechanism (CSM) or that are not yet supported in STEP2, such as debtor mandate flows (e.g. SEDA), account number portability services and direct debit schemes with different cut-offs and validation rules (e.g. Fixed Amount Scheme).
Finnish Oversight exercise
In the context of an oversight exercise run by the Finnish Financial Services Authority in coordination with the Finnish Central Bank, EBA CLEARING visited the Finnish Banks to explain the STEP2 resilience enhancement plans for the SEPA ramp-up period and beyond.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 18 French MIF calculation
The Decision 12-D-17 dated 5th July 2012 of the French competition authority sets out a certain number of commitments that certain French banks have to comply with in relation to multilateral interchange fees (MIFs) applied to national and SEPA Direct Debits and to certain R-transactions on SEPA Credit Transfers and SEPA Direct Debits.
At the request of the French direct participants in STEP2, EBA CLEARING agreed to provide a specific report as part of the chargeable statistical reporting services the Company offers to its users upon request.
2.2.5 STEP2 projects delivered
Additional cycles
On 20th February 2012, two new morning cycles were added to STEP2 SCT, bringing the total number of day-time cycles to four and extending the sending cut-off for same-day payments by one hour until 14:00 CET.
Banks can send payments without specifying when they should be settled. They will be put into the next available cycle. As a result:
4 The receiver has payments delivered more smoothly throughout the day;
4 Problems with settlement can be managed more quickly, e.g. if one bank has liquidity problems, its payments can be removed from the settlement without causing much delay for the rest of the community and STEP2 auto- matically puts them into the next cycle.
At the same time, a new optional cycle with a 21:00 CET sending cut-off was added to the STEP2 SCT offering. The new cycle settles shortly after 21:00 CET in TARGET2 using ASI6. This cycle allows payments that would have been settled the next morning to be settled in the evening of the same day, but with the following day as settlement date, and so the output can be processed during the night.
Batch processing
The first version of the batch processing option was completed and implemented for April 2012. This introduced lighter and cheaper processing for large volumes of payments.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 19 STEP2 SEPA Scheme Rulebook release (November release 2012)
The November release 2012 went live on Monday, 19th November 2012, after successful completion of testing between EBA CLEARING and the STEP2 SEPA Direct Participants.
The release included:
4 the delivery of an upgraded version of the STEP2 Stand-alone Testing Partner (SATP) to reflect the new SDD Scheme Rulebooks and to allow participants to also use the tool for SCT testing;
4 the implementation of updates ensuring compliance of the STEP2 SEPA Services with the latest versions of the EPC Scheme Rulebooks, which came into force on 17th November 2012;
4 the introduction of the SDD Core D-1 option;
4 the introduction of the Change Account Identification (CAI) option;
4 the implementation of enhancements supporting the stability of the system, such as
4 participant options for file splitting;
4 a bulk and batch cancellation functionality.
At the same time, three direct participants representing four Irish Banks started to use the evening cycle (Cycle 00) with a sending cut-off at 21:00 CET and settlement via ASI6 at 21:30 CET.
2.3 Operations of the The central systems, operated by the EBA CLEARING service suppliers SWIFT clearing systems and SIA, performed throughout the year in full compliance with the service level agreements.
Operations processes performed smoothly in all the live services during the period under report. The processing, clearing and settlement activities were carried out in accordance with normal procedures and no major problems had to be reported.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 20 The test environments of all services were available during all operating days. The Stand-alone Testing Partner (SATP) application for STEP2 SEPA Direct Participants proved to be an efficient tool for the users’ end-to-end testing activi- ties. By the end of the year, the application was enhanced to enable SCT-related testing and fully automated in terms of data processing.
The SATP testing environment is available during all operating days throughout the year. Any inquiries in relation to the testing activities in this environment are fully supported by the EBA CLEARING Investigations and Customer Support Unit (ICU).
In the first half of 2012, an operational and technical audit was conducted by Ernst & Young (E&Y). The audit focused on reviewing the status of recommendations issued in the 2009 operational audit. Additionally, a technical and operational review of the EBA CLEARING Operations environment was performed, covering the UNIX AIX operating system, the Oracle database, the network, the security and business continuity controls, the design of the EURO1 CRISTAL BAS2, STEP1, STEP2 as well as ICU-CRM processes and applications.
The audit revealed that most of the processes and controls were in place with adequate levels of documentation, formalisation and implementation; recommen- dations were provided with regard to those processes and controls that required fine-tuning and improvement.
The details of the audit findings and the progress status on the remediation process were presented by E&Y and the EBA CLEARING Management to the Audit and Finance Committee in January 2013.
2.3.1 Customer support
The EBA CLEARING Investigations and Customer Support Unit (ICU) conti- nuously supports service participants throughout the operating business days.
The Unit handled approximately 125 enquiries per month of which almost 67 percent were submitted by customers via the ICU web form, 24 percent via phone and less than 2 percent via e-mail. The remaining enquiries (less than 9 percent) related to internal queries (i.e. cases raised by EBA CLEARING staff and providers). The annual survey on customer satisfaction was conducted during the month of April 2012. The results and analysis of this survey were shared with the partici- pants through the Operations and Technical Committee. An article on this topic was made available to the wider community via the EBA Insight newsletter issued in October 2012. The results of the survey demonstrated an increase in the
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 21 customers’ satisfaction with the support provided to them. More precisely, the overall satisfaction level rose from 83 percent in 2011 to 86 percent.
As a follow-up to this survey, all enhancements suggested by users with regard to the ICU web form were implemented in order to further improve the user- friendliness of the form.
2.3.2 Business continuity testing
In 2012, the business continuity testing program covered all live services, EURO1/ STEP1 and STEP2, and involved all Operations staff, EBA CLEARING’s key service providers (SIA, SWIFT, ECB) and the service participants. All exercises were duly scheduled, logged and reported to the proper audience. In total, there were 17 types of exercises scheduled over 66 days; excluding summer months, this equates to more than one test per week.
2.3.3 Statistics
The regular statistical reports for all live services were distributed to the parti- cipants via dedicated pages of the EBA CLEARING website. In addition to the monthly statistics reports published on the website, specific statistical reports and analyses were provided to the Overseer, as well as to participants as per their specific requests.
2.3.4 Incident process management
In 2012, the main objectives with regard to incident process management were to roll out the structure to providers such as SIA, SWIFT and the ECB in order to ensure common escalation references in the event of an anomaly and to leverage any synergies to assist in quicker resolution. Moreover, parts of the incident simulation exercises were incorporated into the scheduled business resilience testing activities performed by the Operations Unit throughout the year 2012.
EBA CLEARING chose FACT24 to provide a new emergency notification tool to deliver alerts faster and more efficiently in the event of a service-related incident. In 2012, the project entered a preparation phase for roll-out. The objective focused on embedding all related processes (general communications, broad-
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 22 casting, SMS facilities etc.) into a single system used throughout the Company. The live implementation of this enhanced communication tool was scheduled for January 2013.
In the latter part of 2012, preparations for a crisis management simulation exercise began. The aim of the exercise is to place EBA CLEARING’s senior management and a principal provider in a crisis event where they are then expected to react to the situation. Thales Security Consulting was chosen to assist in the simulation exercise.
2.4 Resilience, 2.4.1 Information Security Management Business Continuity and Incident During 2012, the Information Security and Business Continuity Management Management Unit continued its mission to maintain EBA CLEARING’s Business Continuity Management System (BCMS), as well as its Information Security Management System (ISMS), covering all activities in order to meet evolving oversight and customer expectations.
Throughout the year, EBA CLEARING worked towards implementing an official Information Security Management System (ISMS), in accordance with the ISO/ IEC 27001 standard to boost compliance with the New Principles for Financial Market Infrastructures. The centralised management and monitoring of information security is geared at ensuring that key information assets of the Company are effectively protected by standardised measures and controls, which support EBA CLEARING in properly running its day-to-day activities and in achieving its business goals and objectives.
On 28th March 2012, the EBA CLEARING Board endorsed the Information Security Policy (ISP), which marked a key step towards establishing, implementing, operating, monitoring, reviewing and maintaining the ISMS, within the context of the organisation’s overall information security risk. The ISP is subject to a regular (yearly) assessment by the Board.
With regard to the company-wide implementation path towards the official ISO certification, the following can be reported:
4 On 31st October 2012, an official ISO 27001 certification Stage 1 Audit was completed to check the design and applicability of the ISMS, which included all 133 ISO controls;
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 23 4 From 19th to 23rd November 2012, an official ‘on-site’ ISO 27001 certification Stage 2 Audit was executed in the Paris, Brussels and Frankfurt premises.
The Company’s Information Security Management System is now ISO-certified. As an outcome of the works carried out with the aim to obtain ISO certification, Bureau Veritas, Belgium has awarded EBA CLEARING the Information Security industry standard ISO/IEC 27001:2005.
2.4.2 Business Continuity Management
During 2012, EBA CLEARING also focussed on the maintenance of its Business Continuity Management System (BCMS) which has been aligned with the British Standard (BS) 25999.
On 28th March, the Board approved the updated 2012 versions of the documents related to the Company’s BCM. Furthermore, the Company started its prepa- rations for the 2013 revision of the Business Continuity Strategy and Business Continuity Policy to include the STEP2 SEPA Services. Both documents were initially introduced in 2010, and are subject to a yearly assessment, which forma- lises the Board’s commitment and accountability regarding Business Continuity.
Throughout the year, EBA CLEARING continued to regularly test the various resilience and business continuity tools at its disposal. Numerous testing exercises for all Live Services were executed throughout the year. These exercises involved stakeholders such as service providers, participating banks and EBA CLEARING staff members. Their efforts focussed mostly on ‘self-certification’ activities, testing of emergency procedures and simulation of crisis events. The Company also participated in wider industry testing exercises organised, for instance, by SWIFT or the “Groupe de la Place Financière de Paris”.
2.5 Risk Management The year was marked by great macroeconomic uncertainty. Several EU countries faced severe challenges, with recessionary conditions and political uncertainties. In an effort to reign in excessive risk-taking in the financial sector, several new legislative initiatives were introduced. However, the uncertainties regarding the effects of these new regulations, combined with lower demands for loans and a drop in confidence from depositors and investors, left several banks in very difficult situations. A large number of banks saw their cost of funding rise dramati- cally as their access to the interbank markets and other funding sources shrank. Doubt also arose as to some sovereigns’ ability to support the banks in their
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 24 respective jurisdictions and this, coupled with the lower tax inflows due to the slower economic activity, caused investors to demand significantly higher risk premiums. Due to a number of measures taken, some of the market confidence returned at the end of the year.
Authorities have made efforts to control the situation by asking for repeated stress testing of banks’ financials, stricter reporting rules, closer audit supervision, and a string of new regulations (such as those from the European Banking Authority). They have also looked more closely into the market infrastructures and the need for reform and better risk insight in this area.
Several risk controlling initiatives were taken in 2012 by EBA CLEARING. A major effort was done by renewing the Company’s whole Risk Management Framework (RMF), including reviewing the risk universe, assessing all risks therein, establi- shing risk limits and tolerances, creating a new risk governance framework and developing ways to enhance the Company’s risk reporting. A Board Risk Committee (BRC) was called and formed during the year, alongside with an internal Risk Management Steering Committee. A new Chief Risk Officer (CRO) position was established, alongside with a three lines of defence system, as is commonplace in most banks today.
In parallel to these internal risk governance enhancements, a number of reviews and changes were initiated to help participants gain better control over their credit, liquidity and operational risk exposures. Most of the developments relating to the EURO1 system were delivered as part of the EURO1 reform program, which the Company continued to take forward in close consultation with the Future Development Group (FDG). As part of this, several risk improve- ment avenues were reviewed. This resulted in a series of recommendations and some changes. Some examples include bilateral limit reductions, proposals for later cut-off times for changes of limits and for a change to multiple participation permissions.
Regarding the STEP2 system, more cycles were added to the SEPA Credit Trans- fer Service, giving participants more opportunities to process their files during the day. In April 2012, the batch processing functionality was introduced for the STEP2 SCT Service, and in November 2012, the batch cancellation feature was added, allowing banks to better control their liquidity and processing situation. Fraunhofer IAO of Germany conducted a comprehensive study into the operational resilience of the platform, which resulted in the launch of the third operations site project. Further, there was an introduction of single URLs for disaster recovery situations, a revisiting of loss calculation principles and an assessment of the risks associated with the MyBank initiative.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 25 Although there were a number of banks facing problems during the year, and several periods of severe market stress and concerns regarding sovereign defaults, there were no serious incidents, limit withdrawals, participant suspen- sions or operational incidents. The Company’s financials developed favourab- ly and also here improvements were done to upgrade the accounting, financial control and planning processes.
The Board Risk Committee and its precursor met five times during the year to review progress on these many initiatives as well as to guide the Company through the macroeconomic uncertainties. The BRC consists of three Board members, and was attended by the Chairman, the CEO and the General Counsel.
EBA CLEARING is about managing risk
EBA CLEARING has been risk-focussed since its inception 15 years ago. EURO1 was founded on the credit, liquidity and operational risk-mitigating ideas of the Single Obligation Structure (SOS), clear admission rules as well as state-of-the art processing and strong resilience.
EBA CLEARING’s vision and mission has since evolved to be “the most trus- ted European Interbank Clearing House for Euro and conforming to the highest standards in terms of effectiveness, robustness and resiliency”. The Company’s risk management is based on the principles of:
4 general risk avoidance
4 commitment to ethical principles
4 clear ownership and accountability for risk
4 transparent and timely risk information
4 not taking on risks we do not readily understand
4 open discussions on risks and the approach to risk management
Managing risk is an integral part of what EBA CLEARING does at all time. Close attention is paid to the risks inherent in the processes run, as well as those emerging due to changes in our environment or in the activities themselves. EBA CLEARING helps participants reduce and manage their credit and liquidity risks, and the joint success is directly dependent on the ability to evaluate, mana- ge and correctly price all these risks.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 26 Practical risk management
The service managers and functional heads are the front-line staff responsible for identifying all risks in their area of responsibility, for measuring them, mitigating them, monitoring them and reporting on their evolution. Their decision-making and risk-controlling activities are supported by a set of risk policies and instructions as well as by an internal risk steering committee. They are the first line of defence and should ensure that the strategy pursued is consistent with the risk appetite and capacity of the company. A second and third line of defence was established at the end of the year, by the appointment of a Chief Risk Officer and an Internal Auditor of the Company.
The Company’s takes a holistic view of risk, and the ambition is to match participants’ risk management approaches and to monitor all risks following from the clearing and settlement and other services provided. To secure the Company’s financial stability, as well as the collateral and clearing and settlement framework EBA CLEARING is entrusted to run, the risk strategy forms an integral part of the Company’s overall business strategy.
Matching the financial industry’s risk definitions and approach, risks are classified as follows:
Credit risk: the risk of loss due to the failure of an obligor to fulfil its obligations. It comprises counterparty risks, country risk as well as settlement risk. The latter is a particularly important risk element in a clearing and settlement service such as EBA CLEARING’s. This is the risk that one counterpart delivers in accordance with agreed terms with another counterpart, but the other party fails or delays to do so. Risk mitigation measures include control of which counterparts to do business with or allow into a system, pledges of assets of various types, guarantees, netting agreements, gross value exchanges in real-time, and close linking of clearing and final settlement.
Liquidity risk: the risk of loss due to an inability of an entity to generate sufficient liquidity within a given time to meet its payment obligations, through the sale of assets or by borrowing money from other banks or a central bank. Risk mitigation techniques include forward-looking cash flow analysis of outgoing and incoming payment flows and matching these in time using negotiation, or derivatives, liquidity buffers and efficient clearing and settlement channels.
Operational risk: the risk of loss stemming from inadequate or failed internal pro- cesses, people and systems or external events. Examples are break-downs of IT- systems, mistakes, fraud, natural disasters or crime. To control operational risks, the Company registers and reports on all incidents, staff is regularly trained in such
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 27 matters as change control, information security, fraud prevention and the code of business conduct.
Market risk: the risk of loss or reduction of future net income due to changes in interest rates, foreign-exchange rates, equity and commodity prices, including price risk in connection with rapid sale of assets in order to close positions. To mitigate such risks, entities will commonly use various derivatives instruments, such as swaps, options and similar, alongside with stress and scenario testing to understand, control and continuously monitor such risks.
Business risk: the risk of lower revenues, higher operating costs or both due to reduced volumes, price erosion or competition. It covers the risk of reputational damage, and venture risks when the Company invests in major business development projects or IT-systems.
These risks are assessed annually and regularly monitored. An appropriate set of controls are applied and risk-mitigating measures added to reduce risks down to acceptable levels. These controls and mitigating-measures are then tested at regular intervals, through intrusion testing, crisis exercises, loss recalculation tests, fallback and operating centre switching tests.
2.6 MyBank initiative During 2012, MyBank was taken from being an idea defined in a blueprint to being a working tested piece of infrastructure, on the verge of being launched.
This work was done using a small project team internally sourced from EBA CLEARING and a smart use of external consultants all with specific missions that suited their expertise.
The work was done on a relatively low budget. For 2012, EBA CLEARING benefitted from a tax refund in relation to certain innovation-related expenses for MyBank as part of an innovation/research & development stimulus program organised by the French government.
Some of the main achievements of the year include the following:
4 The solution specifications and legal documentation were developed.
4 A security report was completed, which, among other things, shows that MyBank is fully compliant with the ECB SecurePay recommendations.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 28 4 A first transaction between two banks was shown at EBAday.
4 A Technical Pilot involving Merchants and Banks was successfully completed.
4 Promotional activities were undertaken to generate awareness of the MyBank concept and recognition of its logo, which resulted in raising considerable interest among banks, merchants and service providers.
4 A MyBank Service Provider Program was created, which offers a privileged relationship with the MyBank Solution Manager and enhanced visibility to technical service providers offering MyBank services to financial institutions or merchants.
4 In Luxembourg, a public administration e-payment service based on the MyBank specifications was launched at a local level under the label ‘MengBank’.
4 More than 10 banks signed up for the first joining window, which was opened in the fourth quarter of 2012 in preparation of the MyBank launch on 25th March 2013.
2.6.1 Documentation
Documents covering the following areas were prepared in 2012:
4 solution description;
4 technical documentation;
4 legal documentation;
4 user documentation.
The MyBank User Manual provides MyBank Participants with administrative and operational details on the running of the solution.
The MyBank Solution Description aimed at merchants, public institutions and other billers focusses on the key benefits of the solution for these users and provides details on the MyBank security aspects. This document is used by EBA CLEARING for the promotion of the solution and by participating institutions as sales support.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 29 2.6.2 Security report
Following the conclusions of the security taskforce work led by Fraunhofer IAO, a first version of the MyBank Security Report was made available to the financial institutions having signed a confidentiality and non-disclosure agreement. This was then revised to take into account received comments and additional consi- derations raised in the ECB consultation on Recommendations for the Security of Internet Payments.
The security report also takes into account risks related to web-browsing on a mobile phone.
2.6.3 Test tool
In order to help banks and integrators in their preparations, a test tool was delivered at the end of March 2012. This tool allows developers to make sure they have correctly tested the security protocol in a stand-alone mode, before testing with others.
2.6.4 The MyBank Technical Pilot
EBA CLEARING officially launched the MyBank Technical Pilot on th4 June 2012, which ran until early November 2012. The scope of the pilot was the e-authorisation of a SEPA Credit Transfer.
The Pilot involved technical integrators, financial institutions and end-users. Its aim was to show that the different components of the solution work together and that it corresponds to the needs of the e-commerce industry.
The pilot package included the following:
4 A pilot test documentation package was delivered including test plan, test scripts, FAQ and technical manuals;
4 A test tool was put at the disposal of the participants to autonomously test their messaging before running the test scripts to cover bilateral testing with each other;
4 A pilot environment of the MyBank central directory was delivered by SIA;
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 30 4 A MyBank online provisioning form was created to allow the online registration of the participants for the pilot;
4 A MyBank HelpDesk was set up to provide support to the participants; it held a weekly conference call with testing participants.
The technical tests allowed to verify the MyBank messaging and security protocol requirements.
During the pilot:
4 Participants successfully interacted with the MyBank Central Directory and exchanged bilateral messages between platforms using different technolo- gies, thus demonstrating the effectiveness and versatility of the MyBank E-authorisation Protocol;
4 Participants were able to develop the required technical components on average within a period of four months, with one or two persons involved, and reported that the costs for the software development part were not significant;
4 The tests and the feedback of the participants also allowed to improve the solution specifications documents through clarifications and corrections;
4 The Italian merchants that were involved in the Pilot approved the solution design.
Following the MyBank Pilot, banks began testing in the first joining window in order to prepare for the launch of the solution on 25th March 2013.
2.6.5 PR activities
Throughout 2012, the MyBank message was spread at industry conferences, via interviews with media, and press releases.
The MyBank initiative was given a further boost by the increasing emphasis public authorities and agencies are putting on the “digital agenda”. On 11th January 2012, the European Commission published its Green Paper “Towards an integrated future for card, internet and mobile payments”, which mentioned the MyBank initiative.
A dedicated MyBank stand was set up at EBAday 2012, where a demonstration of a first MyBank Pilot transaction between ICBPI and BRED Banque Populaire
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 31 took place on the first day of the conference. This event was witnessed with great interest by a large crowd of bankers, technical service providers and media representatives. EBA CLEARING also took part in several industry events where MyBank was the focus of attention: E-Commerce Netcomm Forum, E-Payments Pre-Conference of the Global E-Commerce Summit in Barcelona, SPIN 2012. The initiative keeps receiving strong support from merchants and technical service providers.
The start of the pilot and the involvement of the banking community were well covered in different European newspapers and online publications.
A MyBank brochure “Taking E-Commerce to the Pan-European Level” was published in preparation for EBA CLEARING‘s special interest session at SIBOS. This has been distributed widely. The brochure includes a number of quotes pro- vided by merchants and payment service providers, details the key benefits of MyBank for customers, merchants and payment service providers and specifi- cally highlights the value the solution could deliver in areas such as e-mandates, e-government and payment authorisation via a mobile.
In October 2012, Ecommerce Europe called on the European payments industry to harmonise the online payments landscape by implementing MyBank offering accompanying services (e-mandates, e-identity) to both merchants and consu- mers. This recommendation was part of a position paper available at http://www. ecommerce-europe.eu/stream/20121105-position-paper-e-payments.
The EBA CLEARING press release issued in December 2012 announcing the success of the first joining window generated further interest and response from the payments industry. MyBank has received many inquiries from banks, mer- chants and service providers.
As a result of these efforts, MyBank was mentioned or featured in a number of industry publications such as the World Payment Report, in online blogs and articles by industry watchers, and in some national mainstream publications, particularly in Italy and Luxembourg.
2.6.6 Industry dialogue and support
During 2012, 47 financial institutions confirmed their support of the initiative. Their list is available on the MyBank website: https://www.mybankpayments.eu/Involved-Financial-Institutions-N=List_of_Po- tential_Future_Participants-L=EN.aspx
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 32 MyBank was presented to the banking communities in all the main European countries.
The Italian banks were heavily involved in the MyBank pilot and launch activities, with nine banking groups participating in the launch and three integrators actively developing and testing. These banks brought in some of the biggest online merchants in Italy, which were also part of the pilot for checking the usability aspects of MyBank. At the same time, Netcomm, the Italian merchants association is promoting MyBank widely.
In France, one bank took part in the MyBank launch. Meanwhile a French report commissioned by the Ministry of Finance has emphasised the need for online payment methods that come directly from the customer’s account.
In Luxembourg, local municipalities have required an e-payment method enabling citizens to settle their public service bills directly via their online banking. One of the banks is leading the way with an implementation of MyBank (“MengBank” in Luxembourgish) that was launched in a live pilot mode in November 2012. The solution is expected to go fully live when the other local banks join in spring 2013.
There is strong interest in MyBank from banks in the Nordics, which already have such solutions locally, but would be interested to standardise on a single pan- European standard. In Germany, trade associations representing major creditors have been calling for an SDD e-mandate solution. In Greece, the major banks have stated an intention to go live with MyBank by the end of 2013.
2.6.7 Dialogue with existing OBeP schemes
Preliminary discussions took place in 2012 with existing Online Banking E-Pay- ment schemes. A Memorandum of Understanding was prepared to define the framework for technical interoperability discussions with Currence and STUZZA, which are responsible for managing the iDeal scheme in the Netherlands and the EPS scheme in Austria respectively.
Non-European scheme providers (NACHA in the US and Payment Network International in Australia) have also contacted EBA CLEARING to discuss possible collaborations.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 33 2.7 Activities of 2.7.1 Audit and Finance Committee (AFC) Board Committees The Audit and Finance Committee assists the Board in its responsibility to over- see EBA CLEARING’s financing, financial statements, financial reporting process and internal audit.
In 2012, the AFC held five meetings to review the quarterly financial results, the annual report and the full year financial statements prior to their release.
In the context of the three-year cycle audit process of the Operations, the AFC reviewed the outcomes of the audit in connection with the design and operating effectiveness of the Company’s clearing operations. In summary, no major non-conformities were found and no observations with high priority were raised. All necessary steps were taken to implement the required changes and improve- ments in line with the observations made.
2.7.2 Innovation Committee (InnoCo)
The mission of the Innovation Committee is to survey market developments, trends and needs in order to assess the practical implications and specific busi- ness opportunities for EBA CLEARING.
Under the chairmanship of Thomas Egner, the Committee held two meetings in 2012.
The Committee closely monitored the activities of the MyBank solution and continued to provide guidance during the delivery process on security aspects, legal considerations, the management of the stakeholder dialogue and the gover- nance model.
The InnoCo also pursued its assessment of pan-European initiatives, such as the Large Volume Exchange (LVE) project, SEPA Card Clearing, Extended Remittance Information, IBAN-only routing and Batch processing.
In addition, the Committee looked into recent developments in the area of mobile payments and discussed the value proposition as well as the potential role of EBA CLEARING and banks in this competitive and fast evolving landscape. The Committee also kept track of new developments in the area of identity-related services and online authentication.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 34 2.7.3 Legal Advisory Group (LAG)
The Legal Advisory Group’s (LAG) mission is to analyse and review proposals from a legal point of view and to formulate recommendations regarding the same.
During 2012, two meetings of the Legal Advisory Group were held under the chairmanship of Caroline Neyrinck.
The Legal Advisory Group accompanied the different stages of implementation of the EURO1 Reform Program and the implementation of the STEP2-T System enhancements, and reviewed the legal documentation relating thereto. The Group also looked at the building blocks and the outlining of the legal documentation for the MyBank initiative.
The CPSS-IOSCO Principles for Financial Market Infrastructures and their impact on EBA CLEARING, EURO1 and STEP2 were a point of specific attention for the Group.
For the update of the country opinions on EURO1, review teams were created within the Group. Final drafts of the updated country opinions were submitted to the ECB as lead overseer of the EURO1 system for assessment. It has been agreed with the ECB that the updating of the country opinions for the US may take place during the year 2013.
2.7.4 Operations and Technical Committee (OTC)
The Committee convened twice during 2012. The main subjects of discussion were a review of the impact of new Regulations and proposals for further changes to improve risk mitigation within the system. The recycling of pre-funded liquidity following the introduction of additional liquidity distribution windows in EURO1 and the further enhancement of the EURO1/STEP1 Directory through the SWIFTRef service were other important discussion topics. The OTC started an initial assessment of the evolution of MX standards for payments and reviewed the outputs from the EURO1/STEP1 MX Gap Analysis working group.
Furthermore, the Committee was also advised on the evolution of the STEP2 platform, plans of an additional SCT cycle in 2013, new operational procedures with regard to defaulting participants and developments of the Large Volume Exchange project. The Committee was updated on the progress of MyBank and developments in the Company’s Information Security Management System.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 35 Moreover, the Committee focussed on the operational business processes with regard to clearing and settlement, incident process management, customer support, statistics, reports on business continuity testing and on the Business Continuity Management process.
The resignation of Kristine De Lepeleire from the Committee created a change to the dual chairmanship model of the OTC. The Terms of Reference of the Committee were amended to assign a single EBA CLEARING Board member for acting as OTC Chairman with a Deputy Chairman coming from the Committee member- ship. The Deputy Chairman presides over the Committee meetings whenever the Chairman might not be available and provides support to the Chairman where required. Hays Littlejohn remains the OTC Chairman and Ludy Limburg (RBS) was appointed as the Deputy Chairman of the OTC.
2.7.5 Risk Committee (BRC)
The Board Risk Committee has the purpose of assisting the Board of EBA CLEARING in fulfilling its oversight responsibilities with regard to the risk tolerance of the Company and the risk management and compliance framework.
Its members are designated members of the Board, who are not members of the Audit and Finance Committee, with the addition of the Chief Executive Officer, the internal General Counsel and the Chief Risk Officer of the Company.
While many of the exchanges and conclusions of the Board Risk Committee are restricted to the members of the BRC and identified executives, officers or em- ployees of EBA CLEARING, the Company has created a Risk Managers’ Forum (see also point 2.1.2) to foster an open and wider risk dialogue between the ser- vice users and EBA CLEARING.
2.7.6 Strategy and Policy Committee (SPC)
The focus on the Strategy and Policy Committee is on the longer-term positioning and development of EBA CLEARING.
Under the chairmanship of Robert Heisterborg, the Committee held two meetings in 2012.
Key items on the agenda of the SPC in 2012 included the EBA CLEARING reach- ability model for STEP2 as well as governance issues with regard to the STEP2 SEPA Services and the MyBank solution.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 36 2.8 Corporate matters The term of office of five Board Members expired at the Shareholders Meeting on 14th May 2012.
The following Board Members were appointed by the Shareholders Meeting on 14th May 2012 for a three-year term of office:
José Luis F. Iglesias BANCO BILBAO VIZCAYA ARGENTARIA Diarmuid Hanrahan ALLIED IRISH BANKS Kirstine Nilsson SWEDBANK AB Luis Pedro Simões BANCO ESPIRITO SANTO Paolo Zanchi BANCA MONTE DEI PASCHI DI SIENA
At the end of the Shareholders Meeting on 14th May 2012 the Board was composed as follows:
Chairman: (until Shareholders Meeting in) Giorgio Ferrero INTESA SANPAOLO 2013
Deputy Chairman: Robert Heisterborg ING BANK 2013
Other Board Members: Marie Cheval SOCIETE GENERALE 2013 Thomas Egner COMMERZBANK 2013 Hays Littlejohn UBS AG 2013 Bart Guns KBC BANK 2014 Olli Kähkönen NORDEA BANK FINLAND 2014 Paul Nixon HSBC BANK 2014 Christian Westerhaus DEUTSCHE BANK 2014 Narinda You CREDIT AGRICOLE 2014 José Luis F. Iglesias BANCO BILBAO VIZCAYA ARGENTARIA 2015 Diarmuid Hanrahan ALLIED IRISH BANKS 2015 Kirstine Nilsson SWEDBANK AB 2015 Luis Pedro Simões BANCO ESPIRITO SANTO 2015 Paolo Zanchi BANCA MONTE DEI PASCHI DI SIENA 2015
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 37 Peter Vance, Allied Irish Banks, was appointed by the Board as EBA CLEARING Board member for the remaining term of office of Diarmuid Hanrahan further to the resignation of the latter and further to a correspondence vote called on 10th September 2012.
Ivo De Meersman, KBC Bank, was appointed by the Board as EBA CLEARING Board member for effect as from 1st January 2013 and for the remaining term of office of Bart Guns further to the resignation of the latter and further to a corres- pondence vote called on 13th December 2012.
The Chairman thanks those Board Members whose mandate will terminate at the end of the present Shareholders Meeting.
The following EBA CLEARING Board meetings took place in 2012:
4 8th February (Board seminar)
4 28th March
4 13th April
4 3rd July
4 25th September
4 28th November
Transfer of shares and changes in share capital of EBA CLEARING
The following changes occurred in 2012 as far as EBA CLEARING share capital and EBA CLEARING shareholders are concerned:
With effect as of 19th March 2012, National Australia Bank Limited withdrew as EURO1 Participant and EBA CLEARING Shareholder and on the same day the EBA CLEARING share held by National Australia Bank Limited was purchased by EBA CLEARING in view on its cancellation. The EBA CLEARING share capital was decreased accordingly from EUR 66,000 to EUR 65,000.
With effect as of 22nd March 2012, Dexia Banque Internationale à Luxembourg S.A. was replaced by Banque Internationale à Luxembourg S.A. as EURO1 Participant and EBA CLEARING Shareholder.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 38 With effect as of 2nd August 2012, EFG Eurobank Ergasias S.A. was replaced by Eurobank Ergasias S.A. as EURO1 Participant and EBA CLEARING Shareholder.
With effect as of 17th September 2012, Portigon AG (formerly WestLB AG) with- drew as EURO1 Participant and EBA CLEARING Shareholder and on the same day the EBA CLEARING share held by Portigon AG was purchased by EBA CLEARING in view on its cancellation. The EBA CLEARING share capital was decreased accordingly from EUR 65,000 to EUR 64,000.
With effect as of 31st December 2012 Fortis Bank SA/NV was replaced by BNP Paribas Fortis SA/NV as EURO1 Participant and EBA CLEARING Shareholder.
The share capital of EBA CLEARING amounted to EUR 64,000 on 31st December 2012.
Regulated agreements entered into by the Company
With reference to regulated agreements subject to the procedure of Article L-227-10 of the French Commercial Code entered into in 2012 by the Company, it is hereby reported that the Service Agreement for Administrative and Support Services between EBA CLEARING and the Euro Banking Association approved on 21st November 2011 by the Board of EBA CLEARING was signed on 25th September 2012 by EBA CLEARING and the Euro Banking Association with retroactive effect from 1st January 2012.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 39 2.9 Financial situation 2.9.1 Financial highlights 2012
% change € THOUSANDS 2012 20111 20101 2012/2011 Consolidated Income statement REVENUE 32,756 31,350 4.5% 28,697 SUPPLIES & EXTERNAL EXPENSES 20,566 19,332 6.4% 17,559 GROSS MARGIN 12,190 12,018 1.4% 11,139 GROSS OPERATING PROFIT 5,033 5,592 -10.0% 4,890 DEPRECIATION & AMORTISATION 3,828 3,924 -2.4% 3,941 OPERATING PROFIT 1,432 1,864 -23.2% 961 NET FINANCIAL INCOME AND EXPENSES 23 6 275.7% -34 PROFIT BEFORE TAX 1,455 1,870 -22.2% 927 NET PROFIT 1,275 1,170 9.0% 981 Financial Structure CASH FLOW 4,984 5,036 -1.0% 4,200 WORKING CAPITAL -4,477 -5,250 -14.7% -7,793 1 Consolidated figures of EBA CLEARING TREASURY 84 1,818 -95.4% -1,621 and ABE ADMINISTRATION SA Ratios2 2 The short-term solvency ratio measures SHORT TERM SOLVENCY the ability to meet short-term debts. (CURRENT ASSETS-STOCK / DEBT The financial autonomy ratio is calculated EXCLUDING BORROWING) 61% 61% 54% by dividing the shareholders’ equity by the FINANCIAL AUTONOMY total of liabilities; it shows the dependency on external financing. (EQUITY / TOTAL LIABILITIES) 48% 32% 23%
In 2012, EBA CLEARING experienced growth in both revenue and net profit. The growth resulted from increasing participation numbers in the STEP2 SEPA Services, the stability in revenue generated in the other services and the work done to benefit from a R&D-related tax incentive.
Due to the structural change that occurred in 2011, i.e. the merger of ABE Admin- istration SA into EBA CLEARING, the 2011 and 2010 figures are consolidated in order to be compared to 2012.
4 The total revenue was EUR 32.756 million in 2012 compared to EUR 31.350 million in 2011, representing a growth of 4.5 percent.
4 The distribution of services revenue after deduction of direct cost was 51 percent for the STEP2 SEPA Services, 29 percent for EURO1/STEP1 and 20 percent for other services and activities of EBA CLEARING.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 40 4 The expenses increased by 6.4 percent compared to 2011, mainly under the “Legal advice, audit and consultancy” position, to meet regulatory require- ments and cover the expansion of the activities of the Company.
4 Net profit increased by 9 percent to EUR 1.275 million in 2012 from EUR 1.17 million in 2011.
4 In 2012, EBA CLEARING invested 3.4 percent of the Company’s revenue into research and development (R&D) for a new product offering, i.e. MyBank, which allowed the Company to recover tax income due.
2.9.2 Financial review
Revenue
EBA CLEARING experienced a revenue growth in 2012. This growth was caused by an increase in the participant numbers for the STEP2 SEPA Services. A number of these additional participants were attracted by the development of additional optional services and functionality.
The total revenue increased by 4.5 percent to EUR 32.756 million in 2012 (2011: EUR 31.350 million), of which 81 percent was related to the above-mentioned evolution in the STEP2 SEPA Services.
The overall revenue generated by the number of transactions in the EURO1 Service and in the STEP2 SEPA Services increased compared to 2011, offsetting the negative impact of the closing down of the STEP2 XCT Service.
A decline was observed in the STEP2 Italian Credit Transfer Service where the revenue of transactions decreased by 1.5 percent because of the ongoing SEPA migration.
The revenues related to the other services remained stable.
Gross Operating Profit
The gross operating profit for 2012 amounted to EUR 5.033 million, compared to EUR 5.592 million in 2011. This represented 15.4 percent of the 2012 revenue, compared to 17.8 percent in 2011.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 41 The principal cost components were the costs EBA CLEARING incurred with regard to the running of the services, wages and other expenses supported in connection with the regulatory compliance and the development of EBA CLEARING to ensure that the business needs of the users of its services are supported and met.
The external costs amounted to EUR 20.566 million in 2012, representing 62.8 percent of the turnover versus 61.7 percent in 2011. The direct cost of the 3 excluding amortisation and depreciation systems3 accounted for 82 percent of these external costs.
Non-direct costs comprised expenses related to the events supporting the promotion and the development of the services as well as the consultation of their users, premises and fittings, and legal advice, audit and consultancy. 4 including amortisation and depreciation Non-direct costs increased to EUR 4.144 million4 in 2012 from EUR 4.107 million charges related to the company cost in 2011 mainly as a result of increased activity under the legal advice, audit and consultancy position, to address the risk resulting from the expansion of the EBA CLEARING services and activities and to strengthen the Company‘s position as a major player in the European market.
In addition to the external costs, wages represented 20.4 percent of the turnover, compared to 19 percent in 2011 and 20.5 percent in 2010. The increase in wages was caused by the Company’s recruitment activities geared at strengthening the operational robustness of its services by reinforcing the underlying organisational structure and processes.
% % % € THOUSANDS 2012 2011 2010 Revenue Revenue Revenue REVENUE 32,756 100.0% 31,350 100.0% 28,697 100.0% SUPPLIES & EXTERNAL EXPENSES 20,566 62.8% 19,332 61.7% 17,559 61.2% GROSS MARGIN 12,190 37.2% 12,018 38.3% 11,139 38.8% TAXES 487 1.5% 481 1.5% 367 1.3% WAGES 6,671 20.4% 5,945 19.0% 5,882 20.5% GROSS OPERATING PROFIT 5,033 15.4% 5,592 17.8% 4,890 17.0%
Financial result
The net financial result for 2012 amounted to EUR 23,000.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 42 Income tax
In 2012, EBA CLEARING secured a refundable tax credit for research and development (R&D), which positively increased the net result compared to 2011.
The consolidated income tax stood at EUR 477,230 in 2012, which reflected an effective tax rate of approximately 33 percent. This rate was reduced to 0 percent by the R&D-related tax incentive. The profit before tax was decreased bya mandatory profit share to be distributed to the EBA CLEARING staff, which amounted to EUR 180,889.
According to the French tax law, the following amounts are non-deductible:
4 income tax: EUR 477,230
4 profit sharing attributed by law to employees: EUR 180,889
4 related social taxes: EUR 34,068
The Net Result after tax is EUR 1,274,729 for 2012.
The Board recommends to the Shareholders Meeting to carry forward this profit.
Since the creation of EBA CLEARING, no dividends have been paid to shareholders. This was again the case in 2012 and this policy is proposed to be maintained for the following years.
In accordance with articles L.441-6-1 and D.441-4 of the French Commercial Code, it is hereby reported that EBA CLEARING’s accounts payable as of 31st December 2012 may be split by due date as follows:
4 payable within 30 days: EUR 3,631,000 (total including VAT);
4 payable between 30 and 60 days: EUR 22,000 (total including VAT);
4 payable beyond 60 days: EUR 1,624,000 (total including VAT).
Liquidity and capital resources
EBA CLEARING relies primarily on cash flow from operating activities to finance its operations as well as any business and organisational developments, and to take the necessary measures internally and vis-à-vis the market to mitigate and prevent the risk resulting from its activities.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 43 The cash flow allows the funding of working capital requirements, the expansion of the Company’s product offering and the strengthening of the organisational infrastructure required to manage the risk.
In 2012, EBA CLEARING generated a cash flow of EUR 4.984 million compared to EUR 5.036 million in 2011, representing respectively 15.2 percent of the turnover in 2012 and 15.4 percent in 2011.
% % % € THOUSANDS 2012 2011 2010 Revenue Revenue Revenue GROSS OPERATING PROFIT 5,033 15.4% 5,592 17.1% 4,890 14.9% OPERATING PROFIT 1,432 4.4% 1,864 5.7% 961 2.9% PROFIT BEFORE TAX 1,455 4.4% 1,870 5.7% 927 2.8% NET PROFIT 1,275 3.9% 1,170 3.6% 981 3.0% + DEPRECIATION AMORTI- SATION & PROVISIONS 3,828 11.7% 3,924 12.0% 3,970 12.1% - REVERSAL OF CHARGES 119 0.4% 120 0.4% 758 2.3% + NET BOOK VALUE OF FIXED ASSETS SOLD 62 7
CASH FLOW 4,984 15.2% 5,036 15.4% 4,200 12.8%
To improve the Company’s short term solvency, EBA CLEARING has decided to minimise the number of outstanding invoices by taking the following actions:
4 Review the billing contact on a regular basis;
4 Promote the direct debit option among customers.
To support the administrative work, the forms for mandates and billing contact updates have been dematerialised and published on the EBA CLEARING website.
The Company has also introduced the following steps effective as from 1st April 2013:
4 Invoice notification is sent via e-mail to the billing contact;
4 Penalties and recovery cost are applied to late payments;
4 The due date has been put forward from 60 calendar days to 30 calendar days.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 44 3. The Company’s activities in 2013
The period under report is 1st January 2013 to 31st March 2013.
3.1 EURO1/STEP1 The improved synchronisation of the EURO1 processing with the FIN network Services introduced at the end of last year has produced positive results. Previously, payments were delivered at a maximum output rate of 28 payments per second. Now the payments are delivered at a rate of up to 40 payments per second. Furthermore, the delay between the time a payment is processed, during start-up time, and the time it is delivered has been radically reduced from 20-25 minutes in some extreme situations to less than one minute. This constitutes a major improvement for the participant banks in terms of enabling them to report their intra-day liquidity positions more accurately and in a timely fashion.
3.1.1 EURO1 Reform Program
As recommended by the Future Development Group (FDG) and endorsed by the Board Risk Committee, the basis for the calculation of the loss-sharing amounts should no longer be different for a scenario involving up to three failures and a scenario involving more than three failures. The calculation in the event of four or more failures is to be changed from being based on the credit cap of the surviving banks to being based on the bilateral limits allocated by the surviving banks to the failed banks. This means the amount of loss share to be allocated will truly reflect the risk control applied by each participant.
Adoption of one single approach to the loss-sharing calculation puts more control back in the hands of the users and encourages tighter risk management practices. Moreover, the bilateral limit approach is more transparent for the users and results in more simplicity of the process for EBA CLEARING. Subject to approval at the Shareholders Meeting on 23rd May 2013, it is proposed to implement this change with effect from 3rd June 2013.
Separately, EBA CLEARING is organising an RFP project to automate the actual processing of the loss sharing calculations and resulting notifications, to remove the manual effort required for notifying the surviving banks of their individual amounts due and of the breakdown of the calculation for the amounts due to be paid based on their bilateral limits allocated to the failed bank(s). EBA CLEARING is approaching SWIFT, Diamis and Fraunhofer in this regard.
In co-operation with the FDG, EBA CLEARING is also in the process of reviewing the EURO1 participation rules and has started to revisit the exiting arrangements for participants.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 45 3.1.2 Risk Managers’ Forum
The inaugural meeting of the Risk Managers’ Forum took place on 4th February 2013 at the EBA CLEARING premises in Paris. Some 30 people attended the meeting, with a further 20 calling in for a conference call summary that took place on 6th February 2013. The various work-strands of the EURO1 Reform Program were presented and there was an interactive discussion on many of the topics. There was positive feedback for further meetings of such a forum.
3.1.3 Oversight 2013
A two-day meeting with the ECB took place on 21st and 22nd February 2013. In relation to the follow up of the comprehensive oversight assessment of EURO1 against the 10 Core Principles for Systemically Important Payment Systems, the ECB informed EBA CLEARING that an assessment on closing the outstanding recommendation relating to the formal implementation of a risk management framework and function will be completed once an external audit of the Risk Management Framework has taken place.
The ECB informed EBA CLEARING that the Eurosystem will adopt the Principles for Financial Market Infrastructures to become part of the oversight framework of the Eurosystem for systemically important payment systems by way of an ECB Regulation. A public consultation on a draft text for the ECB Regulation shall be organised, with an outlook for formal adoption of the ECB Regulation towards the fourth quarter of 2013.
A workshop shall be organised between the Eurosystem and EBA CLEARING during the public consultation period on the draft ECB Regulation to fully under- stand how the ECB intends to apply and interpret the new PFMI requirements to EURO1. This will provide clarity in particular on how the Cover2 requirement is to be understood for the EURO1 system. Said workshop shall be continued by a half day workshop on the Single Obligation Structure and its fundamentals having regard to the PFMIs and their actual application to EURO1.
3.1.4 Participation
It has been announced that Banco Español de Crédito S.A. (Banesto) will be merged into Banco Santander, and so Banesto will be withdrawn from the system with effect from 6th May 2013. This will bring the number of EURO1 Participants down to 63, which is a threshold point for the collateral contribution calculation.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 46 Consequently, participant banks will have to pay in a further EUR 1 million each, so that the individual bank contribution will increase from EUR 16 million to EUR 17 million.
The EURO1/STEP1 Directory project has now been accepted by the working group and also by the OTC and it will be implemented for a live launch on 24th June 2013.
3.1.5 System changes
The move by SWIFT from its leased second European Operational site premises to its own building is progressing. There will be no impact on the EURO1 community. Qualification took place in February 2013 and the timetable for the move will be 8th June 2013 for the STEP2 Multilateral Netting Module and 15th June 2013 for the EURO1/STEP1 system.
The functional release 12.2 for 2013 is relatively small, comprising elements that relate purely to streamlining procedures for EBA CLEARING as system operator in the event of an emergency. There will be no direct impact on the users. Testing took place in April 2013 for implementation in the live environment in May 2013.
EBA CLEARING continues to track the industry work related to how the high value payment systems (HVPS) can eventually migrate to ISO 20022 XML formats. SWIFT have now stated they will work on producing a like-for-like MX equivalent for the MT 400 message. The equivalent of the MT 204, which is required for the distribution phase of the liquidity bridge as well as in the STEP1 settlement process, is already being worked on, but it is not yet finalised.
EBA CLEARING was invited to participate in the HVPS Expert group organised by SWIFT Standards. The banks felt that given the declining usage of the MT 400 in the system (down from 6,500 per month to 5,200 per month), the cost of development and of implementation by the banks did not support the business case. Instead, it was proposed that those banks that still use the MT 400 (half of the EURO1/STEP1 community) could bilaterally exchange the MT 400, while sending a cover MT 202 through the EURO1/STEP1 system.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 47 3.1.6 STEP1
A new applicant bank for STEP1 is very advanced in its joining process, under- lining the advantage that STEP1 can offer to non-EU banks with a branch in the EU in terms of processing their so-called “one-leg-out” payments.
Separately, EBA CLEARING activated its Crisis Management Team to monitor events in Cyprus. Close liaison took place with the settlement banks of the three Cypriot STEP1 Participants involved at all times.
3.2 STEP2 Services Figures in the STEP2 SEPA Services continue to grow, while volumes in the non-SEPA services remain stable.
The key focus for 2013 is the onboarding of banks and the ramp-up of SEPA volumes, which are expected to take off in the second half of 2013.
It is expected that by the time SEPA migration is finished, STEP2 will process 10 times as many payments as are processed today, and that the bulk of this migration will happen during 2013.
Banks continue to subscribe to optional features and AOSs supported by STEP2:
4 Night-time settlement: Banks in Italy will start using the night-time settlement cycle from May 2013 on, which so far has only been used by the Finnish and Irish communities, so that they can offer service levels in SEPA equivalent to those provided by their legacy service.
4 Batch processing: Banks in Germany are registering to test and go live with the SCT and SDD Batch processing options as part of their preparations for migrating domestic volumes to STEP2.
4 SDD Core D-1 processing: Banks are signing up to use the D-1 processing option either individually or in communities, for which special testing is being arranged.
Dialogue with other communities
A number of communities are already committed to the use of STEP2 for the processing of all their domestic SEPA payments. Other communities have
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 48 decided to stick to their local arrangements until the SEPA migration has been completed and to then reconsider their processing options.
EBA CLEARING continues to pay particular attention to the Baltic countries, where the decision-making processes around these matters are still ongoing.
Strengthening of the STEP2 reachability model
Considering the new Oversight expectations for links between retail payment systems, and considering the obligations for technical interoperability stipulated by the SEPA Migration End-Date Regulation, EBA CLEARING is working on strengthening the reachability model for STEP2 and the documenting thereof in a more explicit manner, since these arrangements will need to increasingly handle important domestic volumes in the near future.
3.2.1 Projects 2013
E-DMRF (Electronic Database Maintenance and Routing Forms)
EBA CLEARING is putting in place an electronic web form system for capturing changes that Direct Participants in STEP2 make to their profiles and to the profiles of their Reachable BICs (formerly called Indirect Participants). The aim of this project is to reduce manual handling (and thus costs) for EBA CLEARING and the STEP2 user community.
8th April 2013 Release
The April 2013 Release included the following enhancements:
4 SCT performance improvements impacting both single and batch processing that were developed in 2012 but had not yet been integrated into the live environment;
4 Improvements to the Batch processing functionality;
4 Improvement of the Multilateral Netting Module (MNM) allowing multiple retries in case a bank does not have sufficient liquidity during the night-time settlement.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 49 3rd June 2013 Release
The 3rd June 2013 Release will bring the following new features and improve- ments to the STEP2 system:
4 The ability to generate multiple delivery files during the day for the SDD Services;
4 A batch processing functionality for the SDD Services;
4 SDD performance improvements impacting both single and batch processing that were developed in 2012 but still have to be integrated into the live environment.
30th September 2013: additional SCT 16:00 CET cycle
EBA CLEARING will introduce into STEP2 SCT a settlement cycle with a sending cut-off at 16:00 CET. With this cycle, STEP2 will match similar arrangements that are in place at local level in several European countries.
Consultation with users is ongoing to ensure that this cycle is not used for the sending of large volumes, but only for late same-day payments between partici- pants that are used to processing such transactions. The Legal Advisory Group has been consulted to assess whether there would be any obstacles from the viewpoint of the PSD.
November 2013: STEP2 third site delivery
Following the work performed during 2012, EBA CLEARING will start testing the third site in November 2013.
EBICS
Based on user demand and in accordance with the Board approach agreed in 2010, which supports the use of other networks, EBA CLEARING is preparing for the use of EBICS as a mechanism for secure file exchange with STEP2 from October 2013.
This is seen as a pre-requisite for migration by a number of banks, which are funding the development.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 50 SEDA
EBA CLEARING is following the work of the Italian community on building a solution for the notification and update of mandates in the interbank space. While the specifications are now complete, the implementation details are not yet finalised at the time of writing, but the Italian community requests that thisis delivered within 2013.
3.2.2 Planning for 2014 and beyond
EPC February 2014 Scheme Rulebooks
In February 2014, the EPC will release changes to the SEPA Scheme Rulebooks and Implementation Guidelines to ensure compliance of the SEPA Schemes with the SEPA Migration End-Date Regulation.
Preparations for SIPS and the new CPSS-IOSCO Principles
From an oversight perspective, STEP2-T is expected to be qualified as a Systemi- cally Important Payment System. Therefore, preparations have started for EBA CLEARING to analyse the requirements of the CPSS-IOSCO Principles as well as to conduct a gap analysis.
Enhancing the certainty of STEP2 settlement
While STEP2 offers complete certainty about delivering settled payments, there remains a risk that payments are not settled and delivered on the foreseen settlement date because of the possibility of an unwind of the settlement process. It is expected that the settlement certainty of the STEP2-T System will have to be enhanced if the system is classified as systemically important.
Besides the potential regulatory requirements, there are also commercial drivers for looking into this subject-matter, such as the improvement of the positioning of STEP2 with regard to supporting innovative intra-day payment products.
EBA CLEARING has embarked on a study with a user consultation to ensure an open and transparent exchange and to minimise the cost impact of any changes on the service participants. The initiative will review any remaining intra-day settlement risks in the STEP2 SEPA Services as well as the effects of moving
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 51 to more continuous processing, and propose appropriate processing, legal and technical means to mitigate them.
The project will be taken forward in a phased approach, whereby enhancements identified in relation to the SEPA migration will be separated from enhancements relating to new services or offerings. Any implementation would be done at the earliest in 2014, and after the SEPA migration end-date.
IBAN-only Routing
EU Regulation 260/2012 (the SEPA Migration End-Date Regulation) states that as from February 2014 for domestic payments and as from February 2016 for cross-border payments, payment service providers (PSPs) will no longer be allowed to request payment service users (PSUs) to provide a BIC in order to execute a payment transaction.
EBA CLEARING is looking at market developments and possible solutions to allow its participants to derive the correct BIC from the IBAN for all SEPA countries.
Nordic Payment Area (NPA) multicurrency infrastructure vision
The Nordic banks have published a white paper that has as a vision a single infrastructure processing all Swedish, Norwegian and Danish local currency payments using ISO 20022 XML formats and similar characteristics to the SEPA schemes.
The banks have asked whether EBA CLEARING would be interested in offering solutions to meet such a vision, to which the Company has responded positively.
Other world regions
At the EBA CLEARING Board seminar in 2010, the idea was first raised that the Intellectual Property Rights held by EBA CLEARING for its systems could be useful in other countries and regions around the world where essentially the same banks operate.
Since that time, there have been a number of discussions and requests for information from countries and regions that want to implement regional ISO 20022 XML clearing systems. Most recently, the Southern African states, which are considering introducing a common currency, have requested information from EBA CLEARING.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 52 3.3 Operations of the The central systems, both at the level of SWIFT and SIA, continued to perform clearing systems fully in line with the agreed service levels in the first quarter of 2013. The systems, applications and networks managed and operated by EBA CLEARING also performed according to the agreed service levels and in line with the highest reliability and security standards.
The volume of work in Operations has been witnessing a moderate upward trend. Currently, the unit manages in total 12 EURO1 and STEP2 service settlements each day. Even more settlements in the business day are foreseen moving forward. Additionally, the unit has experienced an increase in statistical requests; the growing amount of individual bank and community requests is of particular interest in this context.
A new initiative in conjunction with Fraunhofer IAO is underway, which is geared at delivering an enhanced tool for monitoring payment flows. Once launched, the Company’s system operations will be able to monitor the daily payment flow activity with leading-edge technology.
3.3.1 Customer support
Effective on 1st January 2013, a revised list of the customer support service fees was released. This overview of the customer support service fees for 2013 is available on the EBA CLEARING website in the customer support section.
The annual analysis of the questions received by customers in 2012 has led to the creation of a list of Frequently Asked Questions published in the customer support section of the EBA CLEARING website.
A new ICU survey will be launched in the course of 2013.
3.3.2 Business continuity testing
The business continuity testing calendar for 2013 has been prepared to cover all exercises to be conducted throughout the year by or with EBA CLEARING Operations staff, its key providers (SIA, SWIFT, ECB) and the service partici- pants.
In 2013, the 21 different types of exercises will be run on 72 different test dates. This will bring the average number of exercises conducted per week from 1 in 2012 to 1.4 for 2013.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 53 3.3.3 Incident process management
The new position of Chief Risk Officer has been incorporated into EBA CLEARING’s crisis management procedures. The Chief Risk Officer will act as the risk advisor on the Tactical Management Crisis Team.
The project phase of FACT24, the incident alerting tool, was concluded. Following a successful testing period, this enhanced communication tool went live in January 2013.
The creation of the crisis management simulation scenario was completed in February 2013. The exercise will be carried out later in 2013 with EBA CLEARING Senior Management and with the active participation of a provider.
3.4 Internal Audit, 3.4.1 Internal Audit Department Resilience, st Business Continuity On 1 January 2013, EBA CLEARING created an Internal Audit Department and Incident (IAD). In this new organisational unit, all Audit, Information Security and Business Management Continuity related tasks and responsibilities are centralised. With the creation of this unit, EBA CLEARING has met a “best practice” in the context of the New Principles for Financial Market Infrastructures.
The Internal Audit Department (IAD) monitors the appropriateness of business execution in general, as well as the effectiveness of the internal control system. The control system follows the ISMS / ISO 27001 and BCMS / BS 25999 standards as well as other elements of the risk governance system throughout the Company. The IAD provides assurance on the functioning of these systems and makes recommendations for improvement. Where required, the IAD will involve external auditors to maintain and ensure the Company’s integrity and reporting compliance.
As part of the mission of this new unit, various Internal Audit information sessions have been organised within EBA CLEARING and a Code of Conduct was created.
3.4.2 Information Security and Business Continuity Management
Following the requirements to maintain the official ISO 27001 certification that EBA CLEARING obtained at the end of 2012, the Information Security Policy (ISP) was re-endorsed by the Board on 27th February 2013.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 54 With regard to the maintenance of the Company’s Business Continuity Manage- ment System (BCMS), the Business Continuity Policy and Business Continuity Strategy documents were updated for 2013 with a view to including the relevant STEP2 SEPA system components. Both documents were re-endorsed by the Board at its meeting on 27th February 2013.
With regard to the testing of the business continuity arrangements available within the EBA CLEARING services, the 2013 business continuity test plans have been finalised and are in the process of being executed in line with the appropriate service levels.
3.5 MyBank initiative In February 2013, the EBA CLEARING Board approved the launch of MyBank, following an impact analysis focussing on revenue, security, reputation, liability and competition.
On 25th March 2013, MyBank went live and the first transaction was made. Ten banking groups, representing a total of 28 individual participating institutions, were part of the first participant group.
MyBank is currently in a ramp-up mode within Italy following the announcement of the major Italian payment banks that they will roll out the solution to merchants, public institutions and retail customers across the country before the end of 2013. Twenty-seven of the initial MyBank Participants are based in Italy.
3.5.1 Communication activities
A marketing workshop was held with the future participants in Milan on 31st January 2013 to prepare and coordinate the marketing and sales launch of MyBank.
The Italian banks involved in the MyBank initiative asked EBA CLEARING to coordinate the communication activities around the launch. Both a pan-European press release in English and a press release with a more national focus in Italian were issued on the launch date.
The Company is preparing a stakeholder forum to be held on the sidelines of the Global E-Commerce Summit in Barcelona in June. The objective of this event is to facilitate the practical exchange among banks, merchants, consumer associations and public institutions and to present the next steps on the MyBank roadmap to all stakeholders.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 55 Mass audience communication is planned for June 2013 when the participants are ready to roll out the solution to their customers on a larger scale.
3.6 Other relevant The following EBA CLEARING Board meetings took place so far in 2013: matters of interest 4 27th February
4 17th April
4 29th April
Transfer of shares and changes in share capital of EBA CLEARING
Further to its merger into Banco Santander S.A. on 4th May 2013, Banco Español de Credito S.A. withdrew as EURO1 Participant and EBA CLEARING Shareholder and the EBA CLEARING share held by Banco Español de Credito S.A. was purchased by EBA CLEARING in view on its cancellation. The EBA CLEARING share capital was decreased accordingly from EUR 64,000 to EUR 63,000.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 56 APPENDIX 1
List of participants in EURO1/STEP1 (as of 15th May 2013)
ABN AMRO Bank N.V. EURO1 Participant Aktia Bank plc STEP1 Bank Allgemeine Sparkasse Oberösterreich Bank AG STEP1 Bank Allied Irish Banks Plc EURO1 Participant Allied Irish Bank (GB) EURO1 Sub-Participant First Trust Bank EURO1 Sub-Participant Alpha Bank AE EURO1 Participant Emporiki Bank of Greece SA EURO1 Sub-Participant Arbejdernes Landsbank A/S STEP1 Bank Banca Agricola Popolare di Ragusa STEP1 Bank Banca del Fucino STEP1 Bank Banca del Piemonte STEP1 Bank Banca delle Marche SPA STEP1 Bank Banca di Imola SPA STEP1 Bank Banca di Romagna SPA STEP1 Bank Banca Monte dei Paschi di Siena SPA EURO1 Participant Banca Antonveneta EURO1 Sub-Participant Monte dei Paschi di Siena Leasing & Factoring EURO1 Sub-Participant Banca Nazionale del Lavoro SPA EURO1 Participant Banca Popolare del Lazio STEP1 Bank Banca Popolare dell‘Alto Adige STEP1 Bank Banca Popolare dell‘Emilia Romagna STEP1 Bank Banca Popolare di Milano S.C.A.R.L. EURO1 Participant Banca di Legnano SPA EURO1 Sub-Participant Banca Popolare di Mantova EURO1 Sub-Participant WeBank SPA EURO1 Sub-Participant Banca Popolare di Sondrio STEP1 Bank Banca Popolare di Spoleto SPA STEP1 Bank Banca Popolare di Vicenza SCPARL STEP1 Bank Banca Nuova SPA STEP1 Sub-Participant Banca Sella SPA STEP1 Bank Banco Bilbao Vizcaya Argentaria SA EURO1 Participant Banco BPI SA STEP1 Bank
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 57 Banco Comercial Português SA EURO1 Participant Banco Cooperativo Español SA STEP1 Bank Banco de Sabadell SA EURO1 Participant Banco Espirito Santo SA EURO1 Participant Banco Popolare S.C. EURO1 Participant Credito Bergamasco EURO1 Sub-Participant Banco Popular Español SA EURO1 Participant Banco Popular Portugal, SA EURO1 Sub-Participant Banco Santander SA EURO1 Participant Banco Santander Totta SA EURO1 Sub-Participant Santander Consumer Bank AG EURO1 Sub-Participant Santander UK Plc EURO1 Sub-Participant Bank BPH SA STEP1 Bank Bank für Tirol und Vorarlberg AG STEP1 Bank Bank of Åland PLC STEP1 Bank Bank of America, NA (Frankfurt Branch) EURO1 Participant Bank of Cyprus Public Company Ltd STEP1 Bank Bank of Ireland EURO1 Participant Bank of Tokyo-Mitsubishi UFJ Ltd EURO1 Participant Bankia SA EURO1 Participant Bankinter SA STEP1 Bank Banque et Caisse d‘Epargne de l‘Etat EURO1 Participant Banque Internationale à Luxembourg EURO1 Participant Banque Michel Inchauspé (BAMI) STEP1 Bank Banque Palatine STEP1 Bank Barclays Bank Plc EURO1 Participant BHF-Bank STEP1 Bank BKS Bank AG STEP1 Bank BNP Paribas Fortis EURO1 Participant BGL BNP Paribas EURO1 Sub-Participant BNP Paribas SA EURO1 Participant BPCE EURO1 Participant BRED Banque Populaire EURO1 Participant Bremer Landesbank STEP1 Bank Caixa Central de Crédito Agrícola Mútuo STEP1 Bank Caixa Geral de Depósitos SA EURO1 Participant
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 58 CaixaBank SA EURO1 Participant Caja Laboral Popular, Coop. de Crédito STEP1 Bank Caja Laboral Popular, Coop. de Crédito (form. Ipar Kutxa Rural SCC) STEP1 Bank Carilo - Cassa di Risparmio di Loreto SPA STEP1 Bank Cassa di Risparmio della Provincia di Chieti SPA STEP1 Bank Cassa di Risparmio di Cesena SPA STEP1 Bank Cassa di Risparmio di Fermo SPA STEP1 Bank Cassa di Risparmio di Ferrara SPA STEP1 Bank Cassa di Risparmio di Ravenna SPA STEP1 Bank Catalunya Banc, SA STEP1 Bank CECABANK SA STEP1 Bank Banco de Castilla - La Mancha SA STEP1 Sub-Participant Banco Grupo Cajatrés STEP1 Sub-Participant Banco Mare Nostrum, SA STEP1 Sub-Participant BBK Bank Cajasur, S.A.U. STEP1 Sub-Participant Caixa d‘Estalvis del Penedès STEP1 Sub-Participant Caja de Ahorros de Murcia STEP1 Sub-Participant Caja de Ahorros de Santander y Cantabria STEP1 Sub-Participant Caja de Ahorros y Monte de Piedad de Extremadura STEP1 Sub-Participant Caja de Ahorros y Monte de Piedad de las Baleares STEP1 Sub-Participant Caja de Ahorros y Monte de Piedad de Ontinyent STEP1 Sub-Participant Caja de Ahorros y Monte de Piedad del Circulo Catolico de Obreros de Burgos STEP1 Sub-Participant Caja España de Inversiones Salamanca y Soria, CAMP - Caja Espiga STEP1 Sub-Participant Caja General de Ahorros de Granada STEP1 Sub-Participant Colonya Caixa Pollença STEP1 Sub-Participant Liberbank, SA STEP1 Sub-Participant Monte de Piedad y Caja General de Ahorros de Badajoz STEP1 Sub-Participant Unicaja (MP y CA de Ronda, Cádiz, Almería, Málaga, Antequera y Jaén) STEP1 Sub-Participant Citibank NA EURO1 Participant
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 59 Commerzbank AG EURO1 Participant Commerzbank AG (form. Dresdner Bank AG) EURO1 Sub-Participant Crédit Agricole SA EURO1 Participant Banca Popolare Friuladria SPA EURO1 Sub-Participant CA-CIB - Crédit Agricole Corporate and Investment Bank EURO1 Sub-Participant Cassa di Risparmio della Spezia SPA EURO1 Sub-Participant Cassa di Risparmio di Parma e Piacenza SPA EURO1 Sub-Participant Crédit Lyonnais (LCL) EURO1 Sub-Participant Crédit Coopératif STEP1 Bank Crédit du Nord EURO1 Participant Crédit Mutuel - CIC Banques EURO1 Participant Crédit Industriel et Commercial EURO1 Sub-Participant Crédit Mutuel Arkéa STEP1 Bank Credito Emiliano SPA STEP1 Bank Credito Valtellinese S.C. STEP1 Bank Cassa di Risparmio di Fano SPA STEP1 Sub-Participant Credito Siciliano SPA STEP1 Sub-Participant Danske Andelskassers Bank A/S STEP1 Bank Danske Bank A/S EURO1 Participant Danske Bank Plc EURO1 Sub-Participant Northern Bank (Part of Danske Bank Group) EURO1 Sub-Participant Deutsche Bank AG EURO1 Participant Deutsche Bank Privat- und Geschäftskunden AG EURO1 Sub-Participant DiBa Bank A/S STEP1 Bank Djurslands Bank A/S STEP1 Bank DNB Bank ASA, London Branch EURO1 Participant DNB Bank ASA, Filial Finland EURO1 Sub-Participant DZ BANK AG EURO1 Participant ERSTE Group Bank AG EURO1 Participant Eurobank Ergasias SA EURO1 Participant Europe Arab Bank plc STEP1 Bank Europe Arab Bank PLC - Austria Branch STEP1 Sub-Participant Europe Arab Bank PLC - France Branch STEP1 Sub-Participant Europe Arab Bank PLC - Rome Branch STEP1 Sub-Participant Europe Arab Bank PLC - Sucursal en España STEP1 Sub-Participant
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 60 Europe Arab Bank PLC - UK Branch STEP1 Sub-Participant Hamburger Sparkasse AG STEP1 Bank Hellenic Bank Public Company Ltd STEP1 Bank HSBC Bank Plc EURO1 Participant HSBC France EURO1 Participant ICCREA Banca SPA - Istituto Centrale del Credito Coop. STEP1 Bank ING Bank NV EURO1 Participant Bank Mendes Gans N.V. EURO1 Sub-Participant ING Bank Slaski EURO1 Sub-Participant ING Belgium NV/SA EURO1 Sub-Participant ING Belgium SA, Succursale en France EURO1 Sub-Participant ING Luxembourg SA EURO1 Sub-Participant Intesa Sanpaolo SPA EURO1 Participant Banca Intesa France EURO1 Sub-Participant Société Européenne de Banque SA EURO1 Sub-Participant Istituto Centrale delle Banche Popolari Italiane STEP1 Bank J.P. Morgan AG EURO1 Participant J.P. Morgan Bank (Ireland) PLC EURO1 Sub-Participant Joh. Berenberg, Gossler und Co. KG STEP1 Bank Jyske Bank AS STEP1 Bank KBC Bank N.V. EURO1 Participant KBL European Private Bankers SA EURO1 Participant Kookmin Bank International Ltd. STEP1 Bank Kutxabank SA (form. Bilbao Bizkaia Kutxa) STEP1 Bank La Banque Postale STEP1 Bank Landesbank Baden-Württemberg EURO1 Participant Landesbank Berlin AG STEP1 Bank Landesbank Hessen-Thueringen (HELABA) EURO1 Participant Lloyds TSB Bank Plc EURO1 Participant Mashreq Bank PSC STEP1 Bank National Bank of Greece SA EURO1 Participant NATIXIS EURO1 Participant NCG Banco SA STEP1 Bank Nordea Bank Finland Plc EURO1 Participant Nordea Bank AB (Publ) EURO1 Sub-Participant
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 61 Nordea Bank Danmark A/S EURO1 Sub-Participant Nordea Bank Norge ASA EURO1 Sub-Participant Nordjyske Bank A/S STEP1 Bank Nørresundby Bank A/S STEP1 Bank Oberbank AG STEP1 Bank Oldenburgische Landesbank AG STEP1 Bank Østjydsk Bank A/S STEP1 Bank OTP Bank Plc. EURO1 Participant Pohjola Pankki OYJ EURO1 Participant Rabobank Nederland EURO1 Participant Raiffeisen Bank International AG EURO1 Participant Raiffeisenlandesbank Oberösterreich AG STEP1 Bank Raiffeisen-Landesbank Tirol AG STEP1 Bank Ringkjøbing Landbobank A/S STEP1 Bank Royal Bank of Scotland Plc EURO1 Participant National Westminster Bank Plc EURO1 Sub-Participant Royal Bank of Scotland Plc, The Netherlands Branch EURO1 Sub-Participant S-Bank Ltd STEP1 Bank SECB Swiss Euro Clearing Bank GmbH STEP1 Bank Skandinaviska Enskilda Banken EURO1 Participant AS SEB Pank EURO1 Sub-Participant SEB AG EURO1 Sub-Participant SEB Banka EURO1 Sub-Participant Skandinaviska Enskilda Banken SA, Luxembourg EURO1 Sub-Participant Skjern Bank STEP1 Bank Société Générale EURO1 Participant Spar Nord Bank STEP1 Bank Sparekassen Sjælland STEP1 Bank Standard Chartered Bank EURO1 Participant Standard Chartered Bank Germany Branch EURO1 Sub-Participant Steiermärkische Bank und Sparkassen AG STEP1 Bank Svenska Handelsbanken EURO1 Participant Swedbank AB (publ) EURO1 Participant Swedbank AB, Lithuania EURO1 Sub-Participant
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 62 Swedbank AS, Estonia EURO1 Sub-Participant Swedbank AS, Latvia EURO1 Sub-Participant Sydbank A/S STEP1 Bank Tapiola Pankki Oy STEP1 Bank Tercas - Cassa di Risp. della Prov. di Teramo SPA STEP1 Bank Banca Caripe STEP1 Sub-Participant The Bank of New York Mellon, Frankfurt Branch STEP1 Bank UBI Banca (Unione di Banche Italiane) S.C.P.A STEP1 Bank UBS AG EURO1 Participant Unicredit SPA EURO1 Participant UniCredit Bank AG EURO1 Sub-Participant UniCredit Bank Austria AG EURO1 Sub-Participant Unipol Banca SPA STEP1 Bank Veneto Banca SCPA STEP1 Bank Vestfyns Bank A/S STEP1 Bank Vestjysk Bank STEP1 Bank VTB Bank (Deutschland) AG STEP1 Bank Wells Fargo Bank NA EURO1 Participant
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 63 APPENDIX 2
List of direct participants in STEP2 (as of 15th May 2013)
STEP2 SCT
ABN AMRO BANK NV AKTIA BANK PLC ALLIED IRISH BANKS PLC ALPHA BANK ARBEJDERNES LANDSBANK AS SEB PANK BANCA D’ITALIA BANCA MONTE DEI PASCHI DI SIENA BANCA POPOLARE DELL EMILIA ROMAGNA BANCA POPOLARE DI SONDRIO SCPA BANCA POPOLARE FRIULADRIA BANCA SELLA HOLDING SPA BANCO BILBAO VIZCAYA ARGENTARIA SA BANCO BPI SA BANCO COMERCIAL PORTUGUES SA BANCO DE ESPANA BANCO DE SABADELL SA BANCO ESPIRITO SANTO SA BANCO POPOLARE SOCIETA COOPERATIVA BANCO POPULAR ESPANOL BANCO SANTANDER SA BANCO SANTANDER TOTTA SA BANK OF ALAND PLC BANK OF AMERICA FRANKFURT BANK OF GREECE SA BANKA SLOVENIJE BANKIA SA BANKINTER SA BANQUE DE FRANCE BANQUE DE LUXEMBOURG BANQUE ET CAISSE D’EPARGNE DE L’ETAT, LUXEMBOURG BANQUE INTERNATIONALE A LUXEMBOURG
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 64 BARCLAYS BANK PLC BELFIUS BANK BGL BNP PARIBAS BNP PARIBAS DUBLIN BRANCH BNP PARIBAS FORTIS SA BNP PARIBAS SA BPCE BPOST BRED BANQUE POPULAIRE CAIXA CENTRAL DE CREDITO AGRICOLA MUTUO CAIXA GERAL DE DEPOSITOS CAIXABANK SA CASSA CENTRALE BANCA – CREDITO COOPERATIVO CASSA DEPOSITI E PRESTITI SPA CASSA DI RISPARMIO DELLA SPEZIA SPA CASSA DI RISPARMIO DI PARMA E PIACENZA SPA CECABANK SA CITIBANK NA LONDON COMMERZBANK AG CREDIT AGRICOLE SA CREDIT MUTUEL ARKEA CREDIT MUTUEL - CIC BANQUES CREDIT SUISSE CREDITO EMILIANO SPA DANSKE BANK A/S DANSKE BANK PLC, FINLAND DANSKE BANK INTERNATIONAL SA, LUXEMBOURG DE NEDERLANDSCHE BANK NV DEUTSCHE BANK AG DEUTSCHE BUNDESBANK DEUTSCHE POSTBANK AG DNB BANK ASA DNB BANK ASA FILIAL FINLAND DZ BANK AG ERSTE GROUP BANK AG EUROBANK ERGASIAS SA
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 65 FORTIS BANK SA/NV HSBC BANK PLC HSBC FRANCE ICCREA BANCA SPA ING BANK NV ING BELGIUM NV/SA ING LUXEMBOURG SA ISTITUTO CENTRALE DELLE BANCHE POPOLARI ITALIANE INTESA SANPAOLO SPA ITELLA PANKKI OY JP MORGAN AG JYSKE BANK AS KBC BANK NV LA BANQUE POSTALE LAN & SPAR BANK AS LANDESBANK HESSEN THUERINGEN LBBW LANDESBANK BADEN WUERTTEMBERG LLOYD TSB BANK PLC NARODOWY BANK POLSKI NATIONAL BANK OF GREECE SA NATIONAL WESTMINSTER BANK PLC NORDEA BANK FINLAND PLC OESTERREICHISCHE NATIONALBANK OTP BANK PLC POHJOLA PANKKI OYJ RABOBANK NEDERLAND RAIFFEISEN BANK INTERNATIONAL AG RAIFFEISEN LANDESBANK SÜDTIROL AG S-BANK LTD SANTANDER CONSUMER BANK AG SECB SWISS EURO CLEARING BANK SKANDINAVISKA ENSKILDA BANKEN AB (PUBL) SKANDINAVISKA ENSKILDA BANKEN, DENMARK SKANDINAVISKA ENSKILDA BANKEN SA, LUXEMBOURG SOCIETE GENERALE SOCIETE GENERALE BANK AND TRUST SA
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 66 SPAR NORD BANK AS SPAREKASSEN KRONJYLLAND STANDARD CHARTERED BANK GERMANY BRANCH SVENSKA HANDELSBANKEN SWEDBANK AB (PUBL) SYDBANK TAPIOLA BANK LTD THE ROYAL BANK OF SCOTLAND PLC THE ROYAL BANK OF SCOTLAND PLC THE NETHERLANDS UBI BANCA INTERNATIONAL UBI BANCA SCPA UBS AG ZURICH UNICREDIT BANK AG HYPOVEREINSBANK UNICREDIT BANK AUSTRIA AG UNICREDIT SPA
STEP2 SDD CORE
ABN AMRO BANK NV AKTIA BANK PLC ALLIED IRISH BANKS PLC BANCA CARIGE SPA BANCA D’ITALIA BANCA DELLE MARCHE SPA BANCA GENERALI SPA BANCA MONTE DEI PASCHI DI SIENA SPA BANCA POPOLARE DELL’EMILIA ROMAGNA BANCA POPOLARE DI SONDRIO SCPA BANCO BILBAO VIZCAYA ARGENTARIA SA BANCO BPI SA BANCO COMERCIAL PORTUGUES SA BANCO DE ESPANA BANCO DE SABADELL SA BANCO ESPIRITO SANTO SA
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 67 BANCO POPOLARE S.C. BANCO POPULAR ESPANOL BANCO SANTANDER SA BANCO SANTANDER TOTTA SA BANK OF AMERICA NA FRANKFURT BANK OF GREECE SA BANKA SLOVENIJE BANKIA SA BANQUE DE FRANCE BANQUE ENI SA BANQUE ET CAISSE D’EPARGNE DE L’ETAT, LUXEMBOURG BANQUE INTERNATIONALE A LUXEMBOURG BELFIUS BANK BGL BNP PARIBAS BNP PARIBAS DUBLIN BRANCH BNP PARIBAS FORTIS SA BNP PARIBAS SA BPCE BPOST BRED BANQUE POPULAIRE CAIXA CENTRAL DE CREDITO AGRICOLA MUTUO CAIXA GERAL DE DEPOSITOS CAIXABANK SA CASSA CENTRALE BANCA – CREDITO COOPERATIVO CASSA DI RISPARMIO DI PARMA E PIACENZA SPA CECABANK SA CITIBANK NA LONDON COMMERZBANK AG CREDIT AGRICOLE SA CREDIT MUTUEL - CIC BANQUES (BFCM) CREDIT MUTUEL ARKEA CREDITO EMILIANO SPA DANMARKS NATIONALBANK DANSKE BANK AS DE NEDERLANDSCHE BANK NV DEUTSCHE BANK AG
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 68 DEUTSCHE BUNDESBANK DEUTSCHE POSTBANK AG DZ BANK AG HSBC BANK PLC HSBC FRANCE ICBPI SPA ICCREA BANCA SPA ING BELGIUM NV/SA ING LUXEMBOURG SA INTESA SANPAOLO SPA J.P. MORGAN AG KBC BANK NV LA BANQUE POSTALE LANDESBANK BADEN-WUERTTEMBERG LANDESBANK HESSEN-THUERINGEN LLOYDS TSB BANK PLC NORDEA BANK FINLAND PLC OESTERREICHISCHE NATIONALBANK POHJOLA PANKKI OYJ RABOBANK NEDERLAND RAIFFEISEN BANK INTERNATIONAL AG RAIFFEISEN LANDESBANK SUEDTIROL AG S-BANK LTD SANTANDER CONSUMER BANK AG SECB SWISS EURO CLEARING BANK SKANDINAVISKA ENSKILDA BANKEN AB SOCIETE GENERALE STANDARD CHARTERED BANK GERMANY BRANCH SVENSKA HANDELSBANKEN THE ROYAL BANK OF SCOTLAND PLC THE NETHERLANDS UBI BANCA SCPA UBI BANCA INTERNATIONAL SA UNICREDIT BANK AG - HYPOVEREINSBANK UNICREDIT BANK AUSTRIA AG UNICREDIT SPA
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 69 STEP2 SDD B2B
ABN AMRO BANK NV BANCA CARIGE SPA BANCA D’ITALIA BANCA DELLE MARCHE SPA BANCA GENERALI SPA BANCA MONTE DEI PASCHI DI SIENA SPA BANCA POPOLARE DELL’EMILIA ROMAGNA BANCA POPOLARE DI SONDRIO SCPA BANCO BILBAO VIZCAYA ARGENTARIA SA BANCO BPI SA BANCO COMERCIAL PORTUGUES SA BANCO DE ESPANA BANCO DE SABADELL SA BANCO ESPIRITO SANTO SA BANCO POPOLARE S.C. BANCO POPULAR ESPANOL BANCO SANTANDER SA BANCO SANTANDER TOTTA SA BANK OF AMERICA NA FRANKFURT BANK OF GREECE SA BANKA SLOVENIJE BANKIA SA BANQUE ENI SA BANQUE ET CAISSE D’EPARGNE DE L’ETAT, LUXEMBOURG BANQUE INTERNATIONALE A LUXEMBOURG BELFIUS BANK BGL BNP PARIBAS BNP PARIBAS FORTIS SA BNP PARIBAS SA BPCE BRED BANQUE POPULAIRE CAIXA CENTRAL DE CREDITO AGRICOLA MUTUO CAIXA GERAL DE DEPOSITOS CAIXABANK SA
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 70 CASSA CENTRALE BANCA – CREDITO COOPERATIVO CASSA DI RISPARMIO DI PARMA E PIACENZA SPA CECABANK SA CITIBANK NA LONDON COMMERZBANK AG CREDIT MUTUEL - CIC BANQUES CREDITO EMILIANO SPA DANMARKS NATIONALBANK DANSKE BANK AS DE NEDERLANDSCHE BANK NV DEUTSCHE BANK AG DEUTSCHE BUNDESBANK DEUTSCHE POSTBANK AG DZ BANK AG ICBPI SPA ICCREA BANCA SPA ING BELGIUM NV/SA ING LUXEMBOURG SA INTESA SANPAOLO SPA J.P. MORGAN AG KBC BANK NV LANDESBANK BADEN-WUERTTEMBERG LANDESBANK HESSEN-THUERINGEN LLOYDS TSB BANK PLC NORDEA BANK FINLAND PLC OESTERREICHISCHE NATIONALBANK RABOBANK NEDERLAND RAIFFEISEN BANK INTERNATIONAL AG RAIFFEISEN LANDESBANK SUEDTIROL AG SANTANDER CONSUMER BANK AG SECB SWISS EURO CLEARING BANK GMBH SKANDINAVISKA ENSKILDA BANKEN SOCIETE GENERALE SVENSKA HANDELSBANKEN THE ROYAL BANK OF SCOTLAND PLC THE NETHERLANDS UBI BANCA SCPA
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 71 UBI BANCA INTERNATIONAL SA UNICREDIT BANK AG - HYPOVEREINSBANK UNICREDIT BANK AUSTRIA AG UNICREDIT SPA
STEP2 ICT
BANCA MONTE DEI PASCHI DI SIENA SPA BANCA NAZIONALE DEL LAVORO BANCO POPOLARE SOCIETA COOPERATIVA INTESA SANPAOLO SPA MONTE DEI PASCHI DI SIENA LEASING & FACTORING UNICREDIT SPA
STEP2 IET
ALLIED IRISH BANKS BANK OF IRELAND BNP PARIBAS DUBLIN BRANCH DANSKE BANK A/S IRISH LIFE & PERMANENT PLC T/A PERMANENT TSB ULSTER BANK IRELAND LIMITED
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 72 APPENDIX 3
Accounts as of 31st December 2012
The annual accounts for 2012 (and for 2011) are attached separately.
Shareholders Meeting 23rd May 2013 // Report of the Board EBA CLEARING 73 Contact details
For any additional information, please contact:
EBA CLEARING Board Secretariat [email protected]
ABE CLEARING S.A.S. à capital variable (EBA CLEARING) 40 rue de Courcelles F - 75008 Paris RCS Paris B 419 020 193 No. TVA: FR 524 19020193