Annual Report 2017

Practitioners Creating Pan-European Estación de Atocha Cover L’aéroport de Roissy- Madrid Atocha railway Payment Infrastructures Charles-de-Gaulle station is the largest railway station in Madrid with Paris Charles de Gaulle 16 million passengers per year. Airport is the second largest international airport in Europe, handling close to 70 million passengers and almost 500,000 aircraft movements in 2017. Haven van Rotterdam

Port of Rotterdam is the largest port in Europe. It is hard to imagine what our lives In 2012, Rotterdam was the would look like without the infrastructure world’s sixth-largest port in terms of annual cargo systems that enable and support our tonnage. The port covers daily activities. 105 square kilometres and stretches over a distance of 40 kilometres. They supply water, power and heat; they provide access to goods, knowledge and money; they help us embark on physical and spiritual journeys.

Like other infrastructures, EBA CLEARING’s payment systems require careful planning and smooth operations to optimally serve their users on a daily basis. This involves close monitoring as well as regular maintenance, enhancement and, where needed, renewal.

What is different about other infrastructures though is that some of them make for great pictures…

Channel Tunnel / Piazza Gae Aulenti Le tunnel sous la Manche Piazza Gae Aulenti is the epi­ The Channel Tunnel is a centre of Milan’s most modern 50.45-kilometre rail tunnel neighbourhood. The square linking Folkestone, Kent, was inaugurated in 2012 and is in the United Kingdom, with dedicated to the architect Coquelles, Pas-de-Calais, Gae Aulenti. The pavilion that near Calais in northern France. hosted the EBA CLEARING SHM At its lowest point, it is 75 m in 2016 is at the heart of the deep below the sea bed and square and next to the highest 115 m below sea level. skyscraper in Italy. 8 The Company’s Mission and Strategic Aims 10 Chairman’s Statement 14 CEO’s Statement

19 85 Company’s Activities Appendices in 2017 and 86 Appendix 1: Outlook for 2018 List of EBA CLEARING Shareholders 20 Our Services 20 Introduction 87 Appendix 2: 22 EURO1 List of Participants 28 STEP1 in EURO1/STEP1 30 STEP2 34 RT1 91 Appendix 3: 40 STEP2 Card Clearing List of Direct Participants 44 SEDA in STEP2-T 46 Operations 96 Appendix 4: 50 Legal, Regulatory and Compliance List of Direct Participants 55 Risk Management in RT1 57 Internal Audit 96 Appendix 5: 58 Corporate Governance List of Direct Participants 72 Oversight of EBA CLEARING in STEP2 CC

75 EBA CLEARING’s Subsidiary PRETA 97 Appendix 6: Annual Accounts for 2017 76 Financial Situation: Statutory Accounts

Via Appia

The Appian Way was one of the earliest and strategically most important Roman roads of the ancient republic. It connected Rome to Brindisi, in southeast Italy. Many parts of the original road beyond Rome’s environs have been preserved, and some are now used by cars. e xcellence u ser-driven r obustness o penness to stakeholders’ needs p an-European a gility

Our mission Our objectives

EBA CLEARING’s mission is to deliver market EBA CLEARING aims to allow cost optimisa- infrastructure solutions for the pan-European tion for its users, and is not seeking profit or payments industry, to support its users’ needs shareholder value maximisation. In pursuing The Company’s Mission in line with user requirements. its mission, EBA CLEARING is guided by the objective to offer its users solutions that are fit The strategic aims of the Company are to for purpose and efficient, with a special focus and Strategic Aims ensure a pan-European and country-neutral on safety and ensuring compliance with approach for the development and delivery of regulatory and oversight requirements. EBA infrastructure solutions, thereby ensuring CLEARING recognises its role in supporting excellence and robustness in delivering our financial stability and promoting fair and effi- services. EBA CLEARING will maintain its cient markets; it is committed to discharging track record of timely delivery of user-driven these responsibilities. solutions responding to evolving and new demands for infrastructure solutions, thereby demonstrating its openness to stakeholders’ needs and agility in its role as market infra- structure solutions provider.

104 Mission and Strategic Aims 104 Mission and Strategic Aims eba clearing Annual Report 2017 8 eba clearing Annual Report 2017 9 Chairman’s Statement

2017 was a pivotal year in European pay- Against this background, EBA CLEARING’s ments. Key industry and regulatory require- focus in 2017 was to remain on its firm course ments were met over the past year and, at the of creating and operating services that are same time, many new requirements were put pan-European by design, with a focus on effi- on the table for payment service providers ciency and effectiveness for the users. In line (PSPs) and financial market infrastructures with this course, the Company continued to (FMIs) to tackle. pursue its unchanged high-level objective to maintain a stable and compliant processing In terms of practical achievements, the indus- environment for the reliable, efficient and cost- try saw the launch of the SEPA Instant Credit effective day-to-day operation of its payment Transfer (SCT Inst) Scheme and the first sys- systems. Supporting the needs of its users is tems and PSPs processing instant payments. a core component of the Company’s mission, Among many other deliveries, 2017 also wit- and I would like to thank our user community I would like to thank our nessed palpable progress on collective deliv- across SEPA for their committed and valued erables helping to fulfil Access-to-Account support in defining the user requirements for user community across SEPA requirements. evolving existing systems and creating new for their committed and services. During the same period, on the FMI side, the valued support in defining revised SIPS Regulation, TARGET2/TARGET2- The go-live of the RT1 System on the launch the user requirements Securities consolidation and the Eurosystem date of the SCT Inst Scheme added another Cyber Resilience Strategy for FMIs – to name milestone to EBA CLEARING’s track record of for evolving existing systems only a few regulatory or public-sector initia- delivering pan-European payment infrastruc- and creating new services. tives that surfaced over the past year – set out ture in time, on budget and in line with the re- new requirements and roadmaps with long- quirements of PSPs across Europe. The Board term implications on both payment system operators and the users of their services. Statement 104 Chairman’s Statement 104 Chairman’s eba clearing Annual Report 2017 11 eba clearing Annual Report 2017 10 has paid particular attention to ensuring reach- The Business Committees for EURO1 and witnessed important developments with re- ability for SCT Inst transactions across SEPA STEP2 have been in place since the start of the gard to oversight and regulatory standards for and easing SCT Inst migration efforts for year. The identical structure for the two sys- FMIs. A number of changes to services were PSPs. Additional service enhancements are tems serves to better reflect the balance be- introduced while, at the same time, the under development to further support the tween the SIPS operated by EBA CLEARING. grounds were being laid for readying the Com- evolving needs of a growing number of RT1 The flexibility for different approaches for pany’s service portfolio to optimally support users in the face of the ongoing instant pay- other or new services has been maintained users over the years to come. ment ramp-up across Europe. and the Board has paid careful attention to re- spond to the need expressed by the users for Working together on these and the many other For its EURO1 and STEP2 Systems, the Com- an efficient organisation of the different groups tasks in an atmosphere of commitment and pany launched comprehensive user consulta- and their remit. mutual trust has made this journey a very spe- tions in support of the future positioning of cial experience, for which I am very grateful. I EURO1 2020 and beyond, and the review of During 2017 and 2018, the Nomination and take this opportunity to thank the Sharehold- the settlement model for the STEP2 system Governance Committee of the Board accom- ers of this Company, the critical service pro- driven by the revised SIPS Regulation. panied the elaboration of a proposed ap- viders of EBA CLEARING and, most impor- proach for establishing compliance with the tantly, my colleagues in the Board as well as The governance and user 2017 also saw an increased focus on security- new requirement of the revised SIPS Regula- the management and the staff for this suc- related topics, including cyber security. The tion regarding Board composition of SIPS. The cessful journey and I wish a fruitful continua- say arrangements have been Board recognises the prime importance for Board has endorsed a proposed approach, tion of this journey to the Company and to its further reviewed to make payment infrastructures and their users to which I will present at the SHM 2018. service users and partners. meet best industry practices in this field, and them future-proof so that the topic of cyber security has become a As part of its responsibilities as a SIPS opera- Looking forward, I see many open questions in they can accommodate standing item on the agenda of the Board. tor, EBA CLEARING has in the period under our sector that may affect the infrastructure report continued to attach prime importance domain. A payment system is part of the finan- foreseeable changes in the In 2013, when I took office as newly elected to the resilience of its systems and their un- cial ecosystem where persons and companies short to medium term. Chairman, there was an outlook for changes derlying IT architecture, has stayed on top of conduct their business and expect execution we would be facing and would need to act its risk environments, and maintained a con- of individual transactions. It might be impor- upon regarding the governance arrangements tinuous dialogue with the Overseers of its sys- tant to remind ourselves that the full-service The objective to achieve of the Company. Following the enhancements tems in the context of assessments of compli- experience is a creation of many actors, of a a degree of independence implemented in the light of the SIPS Regula- ance with the oversight requirements for its whole ecosystem. Best indications for future tion, which was adopted in 2014, the govern- systems. In the year of its 20th anniversary, the orientations of the payment infrastructure between the shareholder ance and user say arrangements have been Company is in excellent shape, providing the come from end-customer requirements. I be- structure and any of the further reviewed to make them future-proof so European payments industry with stable and lieve that the core values of EBA CLEARING that they can accommodate foreseeable state-of-the-art infrastructure systems. will continue to provide a trustworthy frame for Company’s systems or changes in the short to medium term. assisting payment service providers in meet- services in particular saw As I am stepping down from the role of Chair- ing requirements for the infrastructure servic- The objective to achieve a degree of inde- man of this Company, it is very rewarding to es of the future. its fulfilment at the Share- pendence between the shareholder structure look back on the Company’s achievements holders Meeting in 2017. and any of the Company’s systems or services over the past five years. They included, among in particular saw its fulfilment at the Share- many other deliveries, supporting the mass- holders Meeting in 2017, when the Sharehold- scale migration to SEPA and designing, build- ers approved the new framework. ing and launching an instant payment infra- Erkki Poutiainen structure system of pan-European scale in time for the launch of the SEPA SCT Inst scheme. During this period, the industry Statement 104 Chairman’s Statement 104 Chairman’s eba clearing Annual Report 2017 13 eba clearing Annual Report 2017 12 CEO’s Statement

EBA CLEARING is celebrating its 20th anniver- In keeping with company tradition, RT1 was sary in 2018 and I am pleased to report that delivered on time, in a pan-European way. We your Company and the systems we are en- achieved this together with our users, our trusted with running, in close co-operation project team, and our key business partners, with our key service providers, are doing very SIA, SWIFT and the ECB. We are also very well. The service deliveries to our users are pleased to have embraced a large community supported by very stable and smoothly- of service providers to optimally support the running systems, which have been performing onboarding of participants on the technical reliably during the period under report. platform.

The newest member of the family, RT1, was Although the EPC Scheme is optional, we do born on 21 November 2017, along with the expect around 80 participants from the differ- SCT Inst Scheme of the European Payments ent corners of Europe to connect by year end. We are proud to provide Council (EPC). With 17 participants and over Together, these PSPs represent about 80% of 500 addressable PSPs from across Europe, the volumes processed in STEP2 today, which the fast-growing RT1 nearly 100% of the initial scheme-adhering in- will result in an impressive reach only one year user community with real stitutions were reachable from the start. after the launch of the SCT Inst Scheme. and timely solutions as an Starting with around 1,000 transactions per We are proud to provide this fast-growing user enabler of the take-up of day at the beginning, the system currently community with real and timely solutions as an processes over 10,000 transactions per day, enabler of the take-up of SEPA Instant Credit SEPA Instant Credit Transfers. 24 hours per day, 7 days per week. We are Transfers. And we look forward to supporting seeing flows every day, in all time the further development of real-time payments Annual Report 2017 windows. Processing times average under and related services in a user-driven approach. Annual Report 2017 one second, with proven scalability. By April 2018, more than 1 million transactions had clearing clearing 104 CEO’s Statement 104 CEO’s Statement

been processed for a total value of over EUR eba 14 15 700 million. eba Our flagship system, EURO1, will turn 20 next Regulation. At the same time, we are aiming spirit and engagement of our users throughout year with the euro. It continues to perform at for these STEP2 changes to fulfill the highest Europe leads to results that are pan-European the highest levels, providing a cost-effective, degree of efficiency and effectiveness for the by design, but as importantly, pan-European liquidity-efficient, private-sector clearing ser- community of all its users. by desire. This unique dynamic, which is char- vice for large-value payments, operating acterised by collaboration and consensus alongside TARGET2. Together with the EURO1 The Company itself is on firm footing. With a reached across borders, is one that the whole Participants, we are looking how to best lever- strong cash position, we were able to exceed Company, whose employees are representa- age the transition of TARGET2 to ISO 20022 the minimum liquid capital required to cover tive of European diversity, truly appreciates to improve the system and position it for the General Business Risk as required by the SIPS and embraces. Together with our highly sup- future. A blueprint has been produced and a Regulation. This has also allowed us to portive user community and our long-standing roadmap for shaping the system for 2020 and self-fund all projects related to the running and very committed critical service providers, beyond will be elaborated based on the out- systems along with internal ones, such as the we make it happen. come of a comprehensive user consultation. implementation in 2017 of an interactive cus- tomer portal enhancing the quality of our sup- I also want to thank Erkki Poutiainen, who is Ten years after the launch of the SEPA Credit port services. stepping down as Chairman, for his steward- Transfer Scheme, STEP2 continues to provide ship of the Board over the past five years. He SEPA-wide reach to scheme-adhering PSPs, The risk management framework of the has helped guide the Company though many processing around 50 million transactions per company has been well maintained, and the important changes, including the SEPA migra- day. The system continues to perform well, Company intensified its activities in the light of tion and the launch of RT1. The Company is in with very stable operations. Simple to connect the developments in the field of cyber security, a very good place thanks to the commitment In the light of the new to, with clear a risk management framework, it including the expected cyber resilience over- and service of him and his fellow Board mem- was also able to attract new participants in sight expectations as part of the Eurosystem’s bers. requirements of the revised 2017. oversight strategy for cyber resilience of FMIs. SIPS Regulation that were EBA CLEARING is also actively engaged in the EBA CLEARING remains at the heart of Euro- STEP2 responds to the highest standards Euro Cyber Resilience Board for pan-European pean payments and is well-positioned for the adopted in November 2017, applied to Systemically Important Payment Financial Infrastructures, along with peer insti- future. The Company continues to be driven we have launched an ex- Systems and maintains its prominent impor- tutions. A very tangible delivery in the area of by its users, for the benefit of its users and of tance for the well-functioning of SEPA. In the security is that we completed our self-attesta- the wider payments ecosystem both PSPs tensive consultation of all light of the new requirements of the revised tion for SWIFT’s Customer Security Programme and FMIs contribute to. STEP2 users with a view SIPS Regulation that were adopted in Novem- and we are also taking further measures to en- ber 2017, we have launched an extensive con- hance our corporate processes. to identifying options for sultation of all STEP2 users with a view to establishing compliance with identifying options for establishing compli- Oversight compliance related activities have ance with the revised requirements. In dia- intensified during 2017 and 2018, and the Hays Littlejohn the revised requirements. logue with the European Central Bank and addition of the new RT1 system further at- Eurosystem National Central Banks participat- tracted a comprehensive oversight assess- ing in the oversight of STEP2, it is our ambition ment against the applicable standards for to ensure that changes to the STEP2 system Other Retail Payment Systems (ORPS). The will respond to the requirements of the SIPS Company expects increased demands on re- sources for compliance-related activities, and we are preparing accordingly.

I want to take this opportunity to thank our Shareholders and users for making this productive journey with us. The co-operative 104 CEO’s Statement 104 CEO’s Statement eba clearing Annual Report 2017 16 eba clearing Annual Report 2017 17 Jäänmurtaja

Each winter after the Baltic Sea freezes over, Finnish The foreign trade depends greatly on efficient winter navigation. Icebreakers are necessary to keep ports Company’s and sea lanes open, and only ice-strengthened ships can move on their own in conditions dominated by activities ice. This has led Finnish ice technology to develop to a world-leading level over the past 50 years. in 2017 and outlook for 2018

The period under report is 1 January 2017 – 31 December 2017. The outlook for 2018 is included for information.

Berliner Fernsehturm

With its height of 368 metres (including antenna), the Berlin Television Tower is the tallest structure in Germany, and the second-tallest structure in the European Union. It is also one of the 10 most popular attractions in Germany with

Activities 104 The Company’s Activities 104 The Company’s more than one million visitors eba clearing Annual Report 2017 18 eba clearing Annual Report 2017 19 every year. Our Services Introduction

EBA CLEARING Payment Services: Throughout the period under report, EBA This stability notwithstanding, EBA CLEARING Evolution of annual volumes and values in 2016/2017 CLEARING delivered on a daily basis and continued to closely monitor overall market with an impeccable track record best-of-breed developments and to foster a regular ex- EBA CLEARING 2016 2017 Evolution payment infrastructure services to a large Euro­ change with its users. Throughout the period Service pean user community. under report, more than 25 user community meetings took place in 15 countries. Volume* Value* Volume* Value* Volume Value The number of transactions processed by the EURO1 50.79 m 48,959 bn 50.54m 50,699bn –0.49% +3.55% services continued to grow, albeit more moder- With effect from January 2018, the Company ately than in previous years, with 2017 witness- put in place an identical structure for user STEP1 2.58m 291bn 2.52 m 317bn –2.33% +8.93% ing a volume increase of over 7% compared to consultation for the systemically important STEP2 SCT 4.22bn 11,307bn 4.43 bn 12,507 bn +4.98% +10.61% 2016. The overall transaction value increased payment systems (SIPS) operated by EBA by almost 5% during the same period. Through- CLEARING, which resulted in the kick-off of STEP2 out 2017, EBA CLEARING managed the settle- the EURO1 and STEP2 Business Committees SDD Core 6.12bn 1,186bn 6.57bn 1,252bn +7.35% +5.56% ment of close to 13 billion transactions across in March 2018. In March and April 2018, the STEP2 all services. This represents an average daily Company organised roadshows in a number SDD B2B 83.78m 676 bn 85.21 m 723 bn +1.71% +6.95% volume of 50.7 million transactions. of communities to accompany the EURO1 and STEP2 user consultations. STEP2 CC 1.54bn 97bn 1.74 bn 107 bn +7.15% +4.94% Aside from the delivery and launch of the first RT1 N/A N/A 0.144m 90m N/A N/A pan-European instant payment system, RT1, In 2018 and beyond, EBA CLEARING will con- 2017 was a year of great stability and very tinue to assess, together with the user com- Total 12.02 bn 62,515 bn 12.88 bn 65,605 bn +7.15% +4.94% limit­ed system changes for the services of munities of its services, any evolving market EBA CLEARING, testifying to high levels of needs and expectations around its infrastruc- * Rounded figures, all values in EUR functional and operational maturity as well as ture services with a view to ensuring that its user satisfaction. offerings remain fit for purpose.

104 Introduction 104 Introduction eba clearing Annual Report 2017 20 eba clearing Annual Report 2017 21 1 Overview 2 Evolution of EURO1 volumes, 3 Euro1 future positioning EURO1 values and participation During 2017, the EURO1 system continued to As confirmed by the user consultation con- serve its participants reliably, offering a resili­ During the period under report, the transaction ducted in 2016, EURO1 continues to be highly Service ent and cost-effective RTGS-equivalent net volumes processed in EURO1 remained sta- valued in its current set-up and is fit for pur- system for single euro payment transactions ble. While the total number of transactions pose for the next few years. At the same time, allowing participants to optimise liquidity effi- processed in 2017 decreased slightly, the av- large-value payment system operators are ciency. erage daily transaction volumes processed in faced with the need to respond to important EURO1 saw a marginal increase of 0.4%. The developments, such as the introduction of real- In June 2017, EBA CLEARING started a pro- EURO1 market share remained stable at time euro payments in 2017 and the planned gramme for the future positioning and poten- around 40%. industry-wide migration to ISO 20022 stand- tial evolution of EURO1, together with its user ards for high-value payments. That is why, in community, that resulted in a comprehensive The average daily transaction value in EURO1 June 2017, the Company announced the launch user consultation on a blueprint in the spring increased by around 4%, continuing the up- of a programme for the future positioning and of 2018. ward trend witnessed since the second half of potential evolution of the EURO1 system. 2016. December 2017 showed a daily average As part of its continued efforts to reduce the value processed of nearly EUR 230 billion, the The objective of the EURO1 future positioning impact on users of any system changes, the highest daily average value in five years. This programme is to ready EURO1 for the longer- Company introduced an arrangement in the testifies both to the system’s continued term future by adapting it to all the changes system geared at keeping the amount of the attract­iveness to its users for the processing that are expected in the large-value payments individual liquidity pool shares more stable in of large-value transactions and to the liquidity world, while also maintaining and potentially case of changes in the number of participants. efficiency that it offers to its participants. enhancing its value and, where possible, lev- eraging investments already made. EURO1 participation remained relatively sta- ble in 2017 with one participant leaving in No- vember 2017. At the start of 2018, two further

104 EURO1 Service 104 EURO1 Service changes in participation brought the number eba clearing Annual Report 2017 23 eba clearing Annual Report 2017 22 of EURO1 Participants to 49. Together with the newly created EURO1 Fu- 4 Fluctuation of the maximum caps 5 System developments in 2017 ture Positioning Working Group composed of in EURO1 and 2018 user representatives, EBA CLEARING deliv- ered a Blueprint for EURO1 Future Proposition As a short-term enhancement, EBA CLEARING Aside from the above-mentioned system for 2020 and Beyond, which was shared with put in place in December 2017 a change to re- change, EBA CLEARING implemented a com- the user community in March 2018 for a wider duce the impact of participant changes on the bined functional and technical annual release consultation exercise on the way forward. amount of the liquidity pool shares and, thus, in 2017. As no changes had been proposed by on the participants contributing these individ- the service users for inclusion in 2017, the re- Based on the outcome of the user consulta- ual shares. lease was very limited in terms of scope and tion, EBA CLEARING will, in close co-opera- user impact. The release took effect on 6 No- tion with the participant community, continue The change consisted in allowing, up to a vember 2017. It introduced an additional li- the planning, development and implementa- downward limit, the system’s maximum debit quidity distribution window at 15:45 CET, im- tion of the EURO1 future proposition. and credit caps to fluctuate between a mini- proving the liquidity distribution to participants mum and maximum amount. This has the from above 96% to nearly 100% of the pre- effect that the amounts of these caps can be funded value. adjusted at the occasion of a change in the number of participants and the amount of the For 2018, no functional changes are foreseen individual liquidity share remains stable. and system changes will be limited to techni- cal upgrades. This change was first activated in January 2018 when a decrease of the participant num- ber entailed a reduction of the maximum caps; this reduction did not have any negative effect on payment processing. 104 EURO1 Service 104 EURO1 Service eba clearing Annual Report 2017 25 eba clearing Annual Report 2017 24 EURO1 Service Technical Average daily volume Operator trans- Key Facts and Figures actions swift 200,759 Status: MARCH 2018

Settlement at A verage daily Value processing cut-off time billion Live date Special facts or in TARGET2 via the Features in 2017/2018 Ancillary System Interface ASI-4 € 215.7 4 January 1999 • Introduction of fluctuating maximum debit and credit caps in 2017 provides participants with stability of the individual liquidity share in the liquidity pool when the number of participants Legal Basis Function Participation in EURO1 changes • Identified by the ECB as • Large-value Participants • In December 2017, the highest daily average Systemically value in five years was processed with nearly payment system 49 EUR 230bn Important Payment • RTGS-equivalent net system Sub-Participants • A Blueprint for the System (SIPS) • Providing immediate finality for each individual EURO1 future proposi- payment transaction in real time 51 tion for 2020 and • ECB SIPS Regulation fully applicable • Combined with the liquidity-saving benefits beyond was drafted of a multilateral system

in 2017 / 2018 and shared with all participants in March 2018 Reach

Over Evolution of average daily volume of payments processed

240,000 7,400 participant BICs and over

220,000 13,000 200,000 additional BICs reachable via EURO1/STEP1 Participants 180,000

104 EURO1 Service 160,000 104 EURO1 Service eba clearing Annual Report 2017 27 eba clearing Annual Report 2017 26 2015 2016 2017 2018 STEP1 Service Key Facts and Figures

Status: MARCH 2018

Live date Average daily volume 21 November 2000 9,718 transactions reach A verage daily Value Over participant billion 7,400 BICs € 1.3 and over additional Function BICs 13,000 Single euro payment STEP1 Service reachable via EURO1/STEP1 Participants service for commercial transactions, Settlement medium-sized and A turn-key solution for single euro In spite of the continued decline in participant EURO1 Banks act as Settlement Banks smaller banks numbers, the decrease in STEP1 transaction payment processing for STEP1 Participants volumes was less pronounced than over the The STEP1 Service offers a direct and cost- previous two years. The service even witnessed effective access to a highly resilient single euro an increase in the transaction values pro- payment processing platform. With its limited cessed, which illustrates the continued value of Evolution of average daily Technical joining and running costs as well as its wide STEP1 for smaller and medium-sized banks in volume of payments processed Operator reach, STEP1 provides a low-investment solu- particular. tion for the exchange of non-SEPA euro trans- 16,000 swift actions with all key payment banks operating in Europe. 14,000 Participation The number of STEP1 Participants decreased Partici- during the period under report, largely related 12,000 to industry consolidation in Europe. Converse- pants ly, the service also attracted a new participant 43 10,000 in 2017. Sub-

104 STEP1 Service 104 STEP1 Service 8,000 Participants eba clearing Annual Report 2017 29 eba clearing Annual Report 2017 28 2015 2016 2017 2018 11 STEP2 Services

1 Overview 2 evolution of step2 volumes 3 system developments in 2017 The outcome of the annual user consultation and participation and 2018 on changes for 2018 was reflected in the 2018 2017 was again a year of high stability and release proposal. The technical release imple- balanced growth for the STEP2 Services Daily average volumes in the STEP2 SEPA The continued volume growth further in- mented in April 2018 introduced new optional marked by steady volume increases, new traf- Services witnessed a stable increase in 2017 creased the economies of scale in STEP2 and reports further supporting participants in their fic peaks and a continued positive evolution of compared to 2016, going up from over 40.6 allowed EBA CLEARING to pass on these liquidity management, as had been requested the participant figures of the different SEPA million to around 43.5 million transactions pro- benefits to the STEP2 users in terms of cost by the users. The changes of the functional re- Services. cessed per day on average. Furthermore, savings. As a result, the trend of declining av- lease scheduled for implementation in No- STEP2 registered new all-time peak days for erage transaction prices continued in 2017. vember 2018 are mostly related to the new Throughout the period under report, STEP2 all three services combined on 2 October versions of the EPC SCT Scheme Rulebook processed very high volumes of domestic and 2017, with more than 155 million transactions In November 2017, EBA CLEARING deployed coming into effect in November 2018 and the cross-border euro retail payments in a reliable settled. The STEP2 SEPA Direct Debit (SDD) a combined functional and technical release, introduction of an additional debit notification and disruption-free manner and continued to Core Service also reached a new individual which mostly included changes related to file window for SDD Core at 7:00 CET. provide full reach to the European banking com- peak record with a total of 118.1 million direct amendments brought to the SEPA Direct munity for its SEPA transactions. The STEP2 debits settled on 2 January 2018. Debit B2B Scheme Rulebook of the European In April 2018, the Company started a user platform thus continued to assert its value as a Payments Council (EPC). At the request of the consultation on the future evolution of the pan-European payment enabler for the SEPA The number of direct participants in the STEP2 users and based on a positive support from STEP2 settlement model in light of the revised market as well as its position as a strategically SEPA Services kept seeing a positive evolu- the user consultation, the release also intro- SIPS Regulation; this consultation is sched- important infrastructure for a number of com- tion throughout 2017 and early 2018, with duced several service enhancements to the uled for completion by the end of the second munities and individual banks across Europe. eight banks joining the STEP2 SEPA Credit STEP2 SCT Service, such as a one-day ware- quarter of 2018. Transfer (SCT) Service, two banks joining the housing possibility for returns in the batch STEP2 SDD Core Service and two banks con- processing mode. necting to the STEP2 SDD Business-to-Busi- ness (B2B) Service. The STEP2 SEPA Services continued to extend full reachability to over 4,800 financial institutions across the Single

104 STEP2 Services Euro Payments Area. 104 STEP2 Services eba clearing Annual Report 2017 30 eba clearing Annual Report 2017 31 STEP2 Services Legal Basis Average daily volume • Identified as a SIPS under the ECB SIPS SCT Key Facts and Figures Regulation million transactions Status: MARCH 2018 • Compliant with the respective Scheme Rule- 18.2 books and Implementation Guidelines of the European Payments Council (EPC) SDD CORE million transactions Reach 26.3 settlement Evolution of average daily SCT volume of payments processed Over 4,800 SDD B2B Positions provided by 324,765 transactions the Multilateral Netting 50 million Reachable BICs Module (MNM) are

settled in TARGET2 via 45 million STEP2 SDD Core SDD B2B the Ancillary System Over 3,900 Function Interface (ASI) 40 million Reachable BICs ACH Services processing 35 million STEP2 SDD Core SEPA Credit Transfers Average SDD B2B and daily value 30 million Over 3,300 SEPA Core and SCT 25 million Reachable BICs Business-to-Business € 52.2 billion 20 million The STEP2 platform is fully Direct Debits interoperable with 15 other CSMs offering SDD CORE 15 million STEP2 € 5 billion SCT full pan-European reach to all financial institutions that have adhered to 10 million Live dates the respective EPC Scheme Rulebooks SDD B2B € 2.8 billion 5 million SCT 0 million 28 January 2008 Participation 2015 2016 2017 2018 SDD Core and SDD B2B SCT 2 November 2009 Direct Technical Special facts or Participants Operator Features in 2017/2018 143 SIA • New volume record for STEP2 SDD Core on 2 January 2018: SDD CORE 118.8 million direct debits settled Direct Participants • New all-time peak 108 for STEP2 platform on 3 April 2018: more than 156 million transactions settled SDD B2B Direct

104 STEP2 Services • New volume peaks for STEP2 SCT and STEP2 SDD B2B on 3 April 2018: 104 STEP2 Services Participants eba clearing Annual Report 2017 32 41.7 million and over 1 million transactions settled, respectively eba clearing Annual Report 2017 33 93 1 Overview EBA CLEARING continues to put a key focus The development of the platform continued in RT1 Service on orchestrating the major onboarding exer- parallel to the testing activities. In March 2017, Formally kicked off in April 2016, the project of cise that the RT1 platform is expected to see EBA CLEARING announced that, besides EBA CLEARING to deliver a pan-European in- in the course of 2018. Considerable effort is SIANet, the Company would also offer an stant payment solution continued to proceed also put into further developing system func- EBICS connectivity option to RT1 from the in line with the underlying planning throughout tionality and support tools in line with the launch of the system. In October 2017, the 2017. The Company’s new infrastructure plat- evolving user needs during the instant pay- Company confirmed that a SWIFT connectivi- form went live on 21 November 2017, the ment ramp-up period. In addition, the Com- ty option will become available from Novem- launch date of the SEPA Instant Card Transfer pany continues to contribute to industry initia- ber 2018. (SCT Inst) Scheme of the European Payments tives geared at building a well-functioning Council. RT1 provides scheme-adhering pay- instant payment ecosystem. ment service providers with a pan-European 3 Evolution of rt1 volumes and 24/7/365 real-time payment processing sys- participation tem for the handling of SCT Inst transactions. 2 Successful go-live preparations In the course of December 2017, RT1 volumes The development and implementation were In order to ensure a smooth start for the new were approaching 5,000 transactions per day taken forward in consultation with the close to system and its users, considerable priority on average with a total value of approximately 40 funding institutions from across Europe. was given to the timely delivery of the RT1 test EUR 2.5 million. Average daily transaction vol- Seventeen participants from eight European environment. The functioning of the first re- umes had increased to 10,000 by the end of countries joined the platform on the go-live lease of the system in the test environment the first quarter of 2018. RT1 passed the date, extending SCT Inst reach to over 500 was demonstrated to future users in January 500,000-transaction mark on 19 February payment service providers (PSPs). Their con- 2017. The first participants started testing in 2018 and hit the 1-million-transaction mile- nection was preceded by a comprehensive April 2017. To facilitate the onboarding of us- stone on 13 April 2018 with a total transaction test and training programme. ers relying on connectivity or liquidity service value of around EUR 635 million. Over 99% of providers, EBA CLEARING opened up the RT1 the transactions are processed within a couple test system and training webinars to both fu- of seconds.

104 RT1 Service 104 RT1 Service ture users and their service providers. eba clearing Annual Report 2017 34 eba clearing Annual Report 2017 35 Participant numbers grew from 17 to 20 in De- current position in RT1 after each funding and 5 Contribution to industry debates Since September 2017, EBA CLEARING has cember 2017. By March 2018, a total of 576 defunding instruction, which will further sup- been participating in the TIPS Contact Group addressable PSPs from 11 countries were port automation of liquidity management on Throughout the period under report, EBA and is as well an observer in the AMI-Pay, the reachable through the system, which corres­ the participant side. CLEARING continued to be involved in dis- ECB’s advisory group on market infrastruc- ponded to a 98% reachability rate among cussions with the European Central Bank tures for payments. scheme-adhering account-servicing PSPs. The November 2018 release is scheduled to (ECB) and other clearing and settlement cover SWIFTNet Instant network connectivity mechanism providers intending to offer instant Furthermore, EBA CLEARING has been fos- Three participants joined RT1 in April 2018. and EPC SCT Inst Scheme Rulebook chang- payment services to ensure that settlement tering an open exchange on real-time pay- More PSPs are preparing for the joining win- es. Functionality will be introduced enabling and interoperability for instant payments can ment matters with other industry players and dows later this year in July, September and participants to use RT1 as ‘Instructing Party’ be achieved with the appropriate mitigation of stakeholders through its participation in differ- November when RT1 will see significant in the TARGET Instant Payment Settlement risks, including settlement risks, in particular ent fora and industry bodies, such as the growth in terms of participation and a further (TIPS) Service. This will allow participants to for the service participants. RTPG (the group under the ISO 20022 stand- increase of reach. have a single interface for sending and receiv- ardisation body focussing on ISO messages ing transactions settling in RT1 or TIPS. With the support of the RT1 users and the EBA for real-time payments), the Open Forum on CLEARING Board, the Company has also pur- Pan-European Instant Payments facilitated by 4 Future developments In parallel, EBA CLEARING will continue to im- sued efforts aimed at achieving alignment of the Euro Banking Association and the Global prove its tools to support the day-to-day mon- the technical processes and specifications be- Real Time / Instant Payment Group. RT1 functionality will be further enriched in itoring of operations, the provisioning process, tween the pan-European instant payment sys- 2018 in line with user requests. automation of interest calculation and support tems in particular in order to minimise imple- to its customers. mentation and future running costs at the level The June 2018 changes are focussing on en- of users connecting to both pan-European riching liquidity management. The release will systems. introduce flexibility for RT1 Participants to dele­gate liquidity management to their liquidi- ty providers. It will also include real-time infor- mation messages to users to report on their 104 RT1 Service 104 RT1 Service eba clearing Annual Report 2017 36 eba clearing Annual Report 2017 37 RT1 Service Technical Average daily volume Operator Around Key Facts and Figures trans- sia actions Status: MARCH 2018 10,000

Reach A verage daily Value

RT1 extends reach to over 500 payment service million Live date Special facts or providers from 11 EU countries, which are Features in 2017/2018 addressable via the 20 participants connected to € 6.2 21 November 2017 the service • 1-million-transaction mark was passed Legal Basis Function

Participation on 13 April 2018 with a total transaction value • Full compliance with the SEPA Instant Credit of around EUR 635 million Pan-European Participants Transfer (SCT Inst) Rulebook and Implementation

Guidelines of the European Payments Council 24/7/365 real-time 20+ additional participants scheduled for • (EPC), including validation 20 connection between April and July 2018, payment system

bringing the number of addressable PSPs to Fully protected by the Settlement Finality open to any account-servicing payment service over 1,000; • Directive provider (AS-PSP) adhering to the EPC SCT Inst Finality 40+ additional Scheme participants to follow Transactions are until the end of 2018 processed in real time Overview of reachable PSPs by country and settled with instant • The Q2 2018 Functional Release will further enhance the liquidity management in RT1 finality in the system. 2 The Q4 2018 Functional Release will introduce Participants maintain a position in the system, • 3

which is adjusted upon release of each payment SWIFTNet Instant 1 transaction. The position of each participant is as a new connectivity 1 funded in central bank funds. 2 option. 2

In addition, the recall request by the originator 470 will be implemented as well as basic functionali- ties for RT1 as TIPS Instructing Party. 18 1 75

1 104 RT1 Service 104 RT1 Service eba clearing Annual Report 2017 38 eba clearing Annual Report 2017 39 STEP2 Card Clearing Service

Throughout the period under report, the Its pan-European design and the fact that it ity for the participants to use multiple network STEP2 Card Clearing (STEP2 CC or SCC) Ser- enables users to reap synergies from the re- channels and to perform intraday connectivity vice provided a reliable service for the clearing use of the interbank infrastructure and bank- switches in STEP2 CC. The introduction of this and settlement of pre-authorised card-based internal interfaces they have put in place for functionality is in line with service user re- transactions based on the SEPA Card Clearing SEPA make STEP2 CC well-suited for the quests and already available for the STEP2 Framework defined by the Berlin Group. The onboarding of card-initiated payments from SEPA Services today. Berlin Group is a group of 25 major players in other communities in Europe. the card industry from 20 countries in and be- yond the Eurozone, whose aim is to standard- ise card clearing across Europe by leveraging System developments in 2017 SEPA infrastructure. and 2018

The service handled on average over 6.85 mil- As requested by the STEP2 CC user commu- lion transactions per day during 2017. STEP2 nity, EBA CLEARING aligned the file retrans- CC is currently used by seven participants mission behaviour of STEP2 CC with the for debit card transactions under the German STEP2 SEPA Services in a release implement- girocard scheme. ed in November 2017. The release scheduled for November 2018 will introduce the possibil- 104 STEP2 Clearing Service Card 104 STEP2 Clearing Service Card eba clearing Annual Report 2017 40 eba clearing Annual Report 2017 41 STEP2 Card Clearing Service live date function 14 April 2015 High volume, commercial and retail Key Facts and Figures euro clearing service

Status: MARCH 2018 for pre-authorised card Participation messages based on a direct debit collection Direct Participants mechanism

7 capable of routing card clearing messages between Direct Participants Technical Evolution of average daily Operator volume of payments processed legal basis Special facts or 10 million Compliant with the SEPA Card Clearing SIA Features in 2017/2018 Framework as developed by the Berlin Group, a group of major players in the cards industry 8 million New volume record on 3 April 2018: from 20 European countries 23.5 million payments 6 million Average daily value settled

4 million million 2 million € 429.3

0 2015 2016 2017 2018 Average daily volume

million transactions settlement reach 7. 4 Positions provided by Over 2,000 Reachable BICs. the Multilateral Full reach for the clearing of Netting Module are settled in TARGET2 pre-authorised girocard transactions via the Ancillary System in Germany Interface (ASI) through interoperability with the SCC Service offered by Deutsche Bundesbank. 104 STEP2 Clearing Service Card 104 STEP2 Clearing Service Card eba clearing Annual Report 2017 42 eba clearing Annual Report 2017 43 SEDA Key Facts and Figures

Status: MARCH 2018

Evolution of average daily Technical volume of messages processed Operator

700,000 SIA

600,000 reach

500,000 Full reach of all banks that offer SEDA 400,000

300,000

200,000 2015 2016 2017 2018 SEDA – live date Special facts or SEPA-compliant Electronic Features in 2017/2018 14 October 2013 Database Alignment • New volume peak in March 2017: more than 13.5 million Participation messages processed

Direct • Three new participants joined the service in 2017: EBA CLEARING’s SEPA-compliant Electronic Continued volume increase for Participants Société Générale Milano, Sisal Group and Database Alignment (SEDA) Service allows SEDA Service 33 Banca Sella Holding financial institutions to exchange, process and route mandate-related information according SEDA saw a continued volume growth over to business rules specified by the Italian Bank- the past year with a monthly average of function legal basis ing Association (ABI). It is currently mainly 8.5 million mandate-related information mes- used by Italian banks to exchange mandate- sages. A new all-time record was reached in The purpose of SEDA is to Compliant with rules and guidelines developed by related information connected to SEPA Direct March 2017 with 13.5 million messages pro- the Italian Banking Association (ABI) Debits. cessed during that month. exchange, process and route mandate-related information between two financial institutions according to the business rules specified by the Italian Banking

104 SEDA 104 SEDA 104 Association (ABI). eba clearing Annual Report 2017 44 eba clearing Annual Report 2017 45 EBA CLEARING’s operations centres, located The service availability of the EURO1, STEP1, The incident management arrangements of Operations in multiple geographically distant sites, are re- STEP2 SEPA, STEP2 Card Clearing and SEDA EBA CLEARING are reviewed and tested regu- sponsible for the administration and smooth Services was uninterrupted from January to larly to maintain best-of-breed services. processing and settlement of the EURO1, December 2017. Furthermore, the validation STEP1, STEP2 SEPA, RT1, STEP2 Card Clear- and settlement of payment instructions were ing and SEDA Services. Providing these ser- carried out smoothly on a daily basis, includ- 3 Business continuity and resilience vices includes services monitoring, customer ing peak volume days. exercises support, crisis and incident process manage- ment, data and statistical reporting, opera- The RT1 Service has operated smoothly and EBA CLEARING conducts a significant num- tional IT management, integration services for without interruption since its successful launch ber of business continuity exercises on an an- new products and functionality, integration of on 21 November 2017, both in terms of trans- nual basis in co-operation with service partici- new participants, as well as release and resil- action processing and liquidity management pants and key providers to strengthen the ience testing activities. to fund/defund participant positions in the business resilience and preparedness of all system. parties involved. In 2017, 68 testing exercises were successfully performed, with 25 of these 1 Clearing and settlement involving participants and service providers. 2 Incident management The systems operated by EBA CLEARING performed in line with the highest resilience The Company’s incident management pro- and security standards during the period un- cesses have proven to allow accurate and der report. timely handling of the few incidents that oc- curred in 2017. The incident reporting pro- cesses for the EURO1 and STEP2 SEPA Ser- vices are in line with the oversight requirements for SIPS. Similar high standards and adapted escalation processes are in place for all other

104 Operations 104 Operations EBA CLEARING payment services. eba clearing Annual Report 2017 46 eba clearing Annual Report 2017 47 4 Customer support 5 Statistics & data reporting Customer Support cases raised in 2017

EBA CLEARING’s customer support service, EBA CLEARING’s statistics and data reporting including a 24/7 emergency help desk, pro- services respond to a wide range of needs, in- 322 322 415 897 Grand Total vides assistance and support to participants cluding oversight requirements and customer 1,000 connected to / using any of the EBA CLEAR- requests for customised information. 900 ING services on any enquiries related to the services and their operations. 800 700 In November 2017, EBA CLEARING launched 279 Test & Training a new customer portal to enhance interaction 600 of users with the Company’s customer sup- 500 port service. 400 Assistance with the preparations of the launch 300 87 70 186 of the RT1 System and with onboarding of participants in the new service led to an in- 200 235 252 229 618 Live crease of customer support cases towards the 100 end of 2017. 0 Q1 2017 Q2 2017 Q3 2017 Q4 2017 104 Operations 104 Operations eba clearing Annual Report 2017 48 eba clearing Annual Report 2017 49 Legal, Regulatory and Compliance

1 Oversight of the sips operated by scheduled during 2018, and would cover all • An ex ante oversight assessment was con- Main areas of focus for EBA CLEARING as eba clearing four SIPS at the same time. During the first ducted of the proposal for fluctuating max- SIPS Operator of the EURO1 and STEP2-T quarter of 2018, the ECB as Competent Au- imum caps in EURO1. Systems in view of compliance with the SIPS In August 2014, the Governing Council of the thority has confirmed that compliance with all Regulation as amended in November 2017 ECB identified the EURO1 and STEP2-T Sys- Articles of the SIPS Regulation is established During the period under report, the Company (the “Revised SIPS Regulation”) relate to: tems as systemically important payment sys- for both SIPS, EURO1 and STEP2-T. maintained the annual calendar and plan for tems (SIPS) under the ECB Regulation on regular review processes in line with the re- • Article 4 on Governance: requirement for oversight requirements for systemically impor- During 2017, the following dedicated over- quirements of the SIPS Regulation. an ‘independent director’ as defined in the tant payment systems (the SIPS Regulation). sight assessments were conducted in relation Revised SIPS Regulation; to changes to the SIPS: Further, the Company replied to the survey or- During 2016 and 2017, comprehensive over- ganised by the Eurosystem to gauge maturity • Articles 6 and 8 on Liquidity Risk and Cred- sight assessments of the EURO1 System and • An ex post oversight assessment of the levels of the financial market infrastructures it Risk: revised requirements for DNS sys- of the STEP2-T System against the oversight change to the timings for cycle 10 in the within their jurisdiction with the CPMI-IOSCO tems as defined in the Revised SIPS Regu- requirements stemming from the SIPS Regula- STEP2 SCT Service – which were imple- Guidance on Cyber Resilience for Financial lation, with specific relevance for the tion were conducted by the ECB as lead over- mented in the live system in November Market Infrastructures of June 2016. STEP2-T System; and seer with the involvement of Eurosystem cen- 2016 –, was completed in January 2017; tral banks. All four SIPS identified under the Following the public consultation by the Euro- • Article 17 on Tiering: revised requirements SIPS Regulation, including EURO1 and • An ex ante oversight assessment was con- system on revisions to the SIPS Regulation for information on and analysis of tiered STEP2-T, were assessed at the same time by ducted of the changes to EBA CLEARING’s and adjacent legal instruments in the period participation arrangements, to allow identi- reference to their status as at 31 January 2016. governance and user say arrangements, from 20 December 2016 to February 2017, fication and monitoring of material depend- affecting both EURO1 and STEP2-T; revisions to the SIPS Regulation have been encies between participants and entities Formal closure by the Governing Council of adopted. The ECB Regulation of 3 November that are not bound by the rules of the SIPS. the ECB of the follow-up for each system of • An ex post oversight assessment was con- 2017 amending the SIPS Regulation was the SIPS assessments will expectedly be ducted regarding the introduction of an ad- published in the Official Journal of the EU on ditional liquidity distribution window for 16 November 2017 and entered into force on EURO1 in November 2017; 6 December 2017. 104 Legal, Regulatory and Compliance 104 Legal, Regulatory and Compliance eba clearing Annual Report 2017 50 eba clearing Annual Report 2017 51 The Revised SIPS Regulation foresees a one- In November 2017, Deutsche Bundesbank A pre-assessment conducted by the ECB rangements of EBA CLEARING. Further con- year transition period for compliance by SIPS confirmed that observance with the relevant ahead of the go-live did not yield any blocking sultations took place in relation to the Operator with the changed or new require- principles of the PFMIs was established for issue in view of the system’s November preparation of the legal documentation for ments, save that for compliance with the new the STEP2 CC System. The comprehensive launch. A comprehensive oversight assess- RT1 System. The Group accompanied the requirements regarding liquidity risk and cred- oversight assessment of STEP2 CC against ment against compliance with the applicable works on the participation agreement for use it risk a 18-month transition period is foreseen. compliance with the PFMIs applicable to Principles for ORPS is ongoing and is expect- of the ASI-6 real-time interface of TARGET2, ORPS is closed. ed to be completed in the course of 2018. which provides the legal basis for the funds It is anticipated that a comprehensive over- held on the technical account used for RT1 in sight assessment against compliance with the this TARGET2 interface. new requirements of the revised SIPS Regula- 3 Oversight of the rt1 System 4 Legal Advisory Group activities tion (‘gap assessment’) will be conducted by operated by EBA CLEARING the ECB / Eurosystem. Two extended meetings of the Legal Advisory Developments in 2018 In the beginning of May 2017, the ECB notified Group were held during 2017, on 27 January EBA CLEARING of the decision of the Govern- and 27 June respectively. These meetings, In 2018, a meeting of the Legal Advisory Group 2 Oversight of the step2 cc System ing Council of the ECB to assign oversight which included also representatives of legal took place by conference call on 10 April. This operated by eba clearing competence for EBA CLEARING’s new instant departments of Account-Servicing PSPs par- meeting was held to discuss the impact of the payment system to the ECB, which will co- ticipating in the works to prepare for the new General Data Protection Regulation (GDPR) on During 2016, the Deutsche Bundesbank as operate with the Eurosystem central banks. instant payment system of EBA CLEARING, the current role of EBA CLEARING as System lead overseer of STEP2 CC, with the participa- RT1 has been initially classified as an ORPS as were devoted to present and discuss the legal Operator of the EURO1, STEP2-T, STEP2 CC tion by the ECB, conducted a fully-fledged per the revised Eurosystem oversight frame- design and legal documentation for the RT1 and RT1 systems, and a possible update of oversight assessment of STEP2 CC against work for retail payment systems. System. the contractual provisions signed between compliance with the CPMI (formerly CPSS) – EBA CLEARING and the participants in its IOSCO Principles for Financial Market Infra- Consultations of the Group by correspond- systems in relation to the processing of pay- structures (PFMIs) applicable to the ORPS ence took place in relation to the review of ment data. category. changes to the legal documentation for EURO1 and STEP2 as well as on changes to

104 Legal, Regulatory and Compliance 104 Legal, Regulatory and Compliance the legal documentation as part of the imple- eba clearing Annual Report 2017 52 eba clearing Annual Report 2017 53 mentation of the reform of the governance ar- 5 Public consultations On 9 January 2017, TARGET2 initiated a mar- ket consultation on the TARGET Instant Pay- On 16 December 2016, the Financial Stability ment Settlement (TIPS) User Requirements Board (FSB) published a consultative docu- Document (URD). The response by EBA ment on Continuity of Access to Financial CLEARING to this consultation was submitted Market Infrastructures (‘FMIs’) for a Firm in on 24 February 2017. Resolution. The reply by EBA CLEARING to the public consultation was submitted on 8 On 5 May 2017, the Eurosystem initiated a February 2017. market consultation on requirements for the future RTGS service in the context of the TAR- The Eurosystem launched two public consul- GET2-T2S consolidation. The response by tations relating to a review of the SIPS Regula- EBA CLEARING to this consultation was sub- tion on 20 December 2016: mitted on 30 June 2017.

• Public consultation on the draft Regulation On 28 September 2017, the CPMI published a of the European Central Bank amending Discussion Note on ‘Reducing the risk of Regulation (EU) No 795/2014 of the Euro- wholesale payments fraud related to end point pean Central Bank on Oversight Require- security’ for consultation. The reply by EBA ments for Systemically Important Payment CLEARING was submitted on 27 November Systems; and 2017.

• Public consultation on the draft Decision of All responses made by EBA CLEARING to the the European Central Bank on the method- above-mentioned public consultations are ology for calculating sanctions for infringe- available on the website of EBA CLEARING. ments of the oversight requirements for systemically important payment systems. Risk Management

Two private consultations on adjacent items, addressed only to SIPS Operators, were notified to EBA CLEARING on 22 December 2016, and a response was submitted by EBA CLEARING. 1 Internal developments A regular dialogue took place with the Board Risk Committee (BRC) with a view to assess- The Risk Management function, as part of the ing and mitigating the Company’s top and ‘second line of defence’, was duly sustained newly emerging risks. throughout the period under report. It was as- sured that all tools and methodologies were maintained in line with best industry practice Dedicated cyber security-related and oversight requirements. In addition, ef- activities forts continued to keep the level of risk aware- ness and understanding high among the Com- Cyber risk mitigation remained a prominent fo- pany’s executives and staff. cus of the Risk Management function through- out 2017. The Cyber Security Operations Cen- At the same time, the Enterprise Risk Manage- tre (C-SOC), which is aimed at providing ment Framework (ERMF) was well maintained second-line support in case of cyber-related and subject to further enhancements of the re- threats or incidents, was further strengthened. porting tools. The implementation of the internal programme to comply with the Guidance on Cyber Resil-

104 Legal, Regulatory and Compliance 104 Risk Management ience for Financial Market Infrastructures by eba clearing Annual Report 2017 54 eba clearing Annual Report 2017 55 the CPMI published in June 2016 continued in 4 Business continuity management 2017. Deliveries included, among other things, system the development of a Cyber Resilience Frame- work for EBA CLEARING, which is aligned In 2017, EBA CLEARING continued the main- with the framework of the United States’ Na- tenance of its Business Continuity Manage- tional Institute of Standards and Technology ment System (BCMS), which is aligned with (NIST). The Company also held two cyber risk- the international ISO 22301 standard. This in- related sessions at Board level and intensified cluded, among other things, the organisation its internal training activities in this area. and timely execution of business continuity tests.

2 External developments To ensure continued alignment of the Compa- ny’s BCMS with the ISO 22301 standard, in- Throughout 2017, EBA CLEARING continued dustry best practice and the relevant oversight to monitor the risk factors around the eco- requirements, a new gap analysis will be con- nomic and financial sector in Europe and as- ducted in 2018. sess their potential impact on the Company’s services. This work was pursued under the guidance of the BRC and in a dialogue with 5 Information security the Company’s critical service providers. The Information Security Policy (ISP) reflects the specific requirements for the implementa- 3 Risk seminars and information tion of security controls at the level of the sessions Company. EBA CLEARING is certified against the ISO/IEC 27001:2013 standard, which is The broader topic of Enterprise Risk Manage- designed to ensure the selection of adequate Internal Audit ment was a key item on the agenda of multiple and proportionate security controls that pro- bilateral user visits throughout 2017, with a fo- tect information assets of the Company and cus on EBA CLEARING’s mission, vision and give confidence to interested parties. strategy towards risk. For 2018, the Company is planning to organise dedicated risk ses- Throughout the period under report, the Com- sions for its user communities. pany’s Information Security Committee (ISC), which is composed of information security co- EBA CLEARING’s Internal Audit function was The last round of the ‘three-year operational ordinators of each unit, continued to meet fre- maintained in line with best practice and con- audit cycle’ on the systems of EBA CLEARING quently to discuss any new developments and tinued its mission as the ‘third line of defence’ was performed by the external auditor. No stay focussed on broadening the Company’s within the Company during the period under high-risk items were identified during the information and cyber security risk awareness, report. whole audit cycle. Formal management re- culture and controls. sponses to any outstanding items were pro- The Company’s audit strategy and planning vided and followed up in accordance with the for 2017 was established under the guidance established audit procedures. of the Audit and Finance Committee (AFC), with which an open dialogue on all audit-relat- Audit assessments of the Company’s most ed matters was maintained throughout the critical service providers took place during the year. In line with the annual audit plan, various period under report. The results can be classi- internal and external audits were completed in fied as assuring. 2017 as scheduled. 104 Risk Management 104 Internal Audit eba clearing Annual Report 2017 56 eba clearing Annual Report 2017 57 1 Board directors Board members are elected intuitu personae b Board role and responsibilities Corporate by the Shareholders Meeting from among em- a Board composition ployees or officers of the shareholders. The The Board is responsible for setting the strate- Governance policy for the nomination of candidates to the gic direction, overseeing management and The Board comprises 15 non-executive direc- EBA CLEARING Board of Directors (the Board adequately controlling the Company, with the tors appointed for a renewable three-year term. Nomination Policy) sets the framework for ultimate aim of directing the Company to- Since the Shareholders Meeting on 19 June this nomination process. The Nomination and wards the fulfilment of its strategic aims and 2017, during which five Board members were Governance Committee of the Board main- long-term objectives. appointed for a three-year term of office, the tains a Board target profile to track the desir- changes to the membership of the Board have able collective attributes for ensuring an been the following: effective 2 February 2018, appropriate mix of technical skills, knowledge c Board meetings the Board, upon proposal by the Nomination and experience on the Board, and assists the and Governance Committee, co-opted Raouf Board in ensuring that the Board’s composi- The following Board meetings took place in Soussi Laghmich as Board member to fill the tion allows the Board to fulfil its respective 2017 and in 2018 to the date of this report: vacancy following the resignation of Ignacio roles and responsibilities. Echevarria Gayubo. • 14 February 2017 and 15 February 2017 In 2017, the Board undertook a third review of • 3 May 2017 EBA CLEARING has currently 51 shareholders, its effectiveness. In accordance with EBA • 31 May 2017 each holding one share of EBA CLEARING and CLEARING’s Board Evaluation Policy and • 5 July 2017 having one vote at the Shareholders Meeting. Methodology, a review of the Board’s overall • 28 September 2017 All members of the Board are employees or performance and the performance of its indi- • 22 November 2017 officers of EBA CLEARING Shareholders, and vidual Board members is conducted on an an- • 6 February 2018 and 7 February 2018 are considered to be independent since none nual basis. • 3 May 2018 of the shareholders have a controlling stake in • 18 May 2018 EBA CLEARING. The members of the Board do not receive any director’s fees, but are reimbursed for the trav-

104 Corporate Governance 104 Corporate Governance el expenses incurred in the discharge of their eba clearing Annual Report 2017 59 eba clearing Annual Report 2017 58 duties for the Company. Overview of Board members who held office in 2017–2018

Chairman James Barclay Jutta Cammaer Daniela Dell’Arciprete Ignacio Echevarría Raouf Soussi Laghmich of the Board JP Morgan Chase Bank N.A. KBC Bank N.V. Intesa Sanpaolo S.p.A. Gayubo BBVA S.A. Executive Director, Global General Manager Payments Head of Sales and Network BBVA S.A. Head of Global Product for Erkki Poutiainen Market Infrastructures for Corporates Management FI Head of Treasury Solutions Treasury Solutions Nordea Bank AB (publ), Appointed on 19.06.2017 Appointed on 19.06.2017 Appointed on 11.05.2015 Europe Appointed by Board Mail Vote Finnish Branch End of term of office: SHM 2020 End of term of office: SHM 2020 End of term of office: SHM 2018 Appointed on 11.05.2015 on 02.02.2018 End of term of office: End of term of office: SHM 2018 Strategy Manager, SVP 01.02.2018 CM Customer Solutions, Transaction Banking

Appointed on 06.06.2016 End of term of office: SHM 2019 Chair of the Nomination and Governance Committee Chair of the Remuneration Committee

Petia Niederländer Kirstine Nilsson Edström Christian Rhino Luis Pedro Simões Fabio Stragiotto ERSTE Group Bank AG Swedbank AB (publ) Commerzbank AG Novo Banco S.A. UniCredit S.p.A. Head of Group Retail & Head of Business Infrastructure Divisional Board Member Co-Head of Payment Operations Vice President – Client Access Italy Corporate Operations GCP & GCM Group Banking Operations and Payment Products Appointed on 11.05.2015 Global Transaction Banking Appointed on 06.06.2016 Appointed on 11.05.2015 Appointed on 06.06.2016 End of term of office: SHM 2018 End of term of office: SHM 2019 End of term of office: SHM 2018 End of term of office: Chair of the Audit and Finance Appointed on 19.06.2017 Chair of the STEP2 Business SHM 2019 Committee End of term of office: SHM 2020 Committee

Deputy Chairman of the Board Robert Heisterborg ING Bank N.V.

CSD Head of Lending Services & Europe

Appointed on 06.06.2016 End of term of office: SHM 2019 Frantz Teissèdre Peter Vance Christian Westerhaus Narinda You Société Générale S.A. Allied Irish Banks, p.l.c. Deutsche Bank AG Crédit Agricole S.A. Chair of the Strategy Head of Interbank Relationships Head of Banking Operations & Head of Cash Clearing Products Payment Services and Policy Committee Customer Services GTB Cash Management Head of Strategy and Appointed on 06.06.2016 Interbank Relations End of term of office: SHM 2019 Appointed on 11.05.2015 Appointed on 19.06.2017 End of term of office: SHM 2018 End of term of office: SHM 2020 Appointed on 19.06.2017 Chair of the EURO1 Business Chair of the Board Risk Committee End of term of office: SHM 2020 Committee 104 Corporate Governance 104 Corporate Governance eba clearing Annual Report 2017 61 eba clearing Annual Report 2017 60 EBA CLEARING Board Committee membership in 2017

Audit and Board Risk Strategy and nomination Remuneration Finance Committee policy and Governance Committee Committee Committee Committee

Number of 4 4 plus 1 board 5 5 Recurrent meetings in 2017 workshop meetings in Q4

Erkki Observer Observer Chair Chair Poutiainen

Robert Member Chair Member Heisterborg

James Barclay Member

Jutta Cammaer

Daniela Member Dell’Arciprete

Ignacio Echevarría 2 Board committees To this end, the Committee Gayubo

Petia Member a Introduction • examines the annual and interim statutory Niederländer and consolidated financial statements of In 2017, the Board was supported by five EBA CLEARING submitted by the Compa- Kirstine Member Board Committees, composed of Board mem- ny’s management, prior to their examina- Nilsson bers, in carrying out its functions: the Audit tion by the Board. As part of these tasks, Luis Simões Chair Member and Finance Committee, the Risk Committee, the committee reviews and analyses the the Strategy and Policy Committee, the Nomi- budget variance, forecast and financial Christian Member nation and Governance Committee, and the statements; Rhino (since July 2017) Remuneration Committee. Fabio Member Member • gives its opinion on the development of the Stragiotto (since September 2017) internal audit function, determines the in- b Audit and Finance Committee ternal audit plan and receives a summary Frantz of the internal audit report on a regular Teissèdre The Audit and Finance Committee (AFC) as- basis; Peter Vance Member sists the Board in fulfilling its oversight re- sponsibilities for setting out the policy and the • reviews the audit findings of the Company’s Christian Chair Member Member guidelines for the internal and external audit of statutory auditors and receives a report Westerhaus the Company, for defining and monitoring the from the statutory auditors on key audit Narinda You Member Member internal audit requirements and the tasks en- findings. trusted to the external auditors and for review- ing and monitoring the financial situation of the Company. 104 Corporate Governance 104 Corporate Governance eba clearing Annual Report 2017 63 eba clearing Annual Report 2017 62 The committee met four times in 2017. Its c Board Risk Committee Cyber security remained prominently on the The SPC further provided direction on EBA work particularly focussed on the following agenda of the Committee throughout 2017, CLEARING’s potential engagement with re- items: The Board Risk Committee (BRC) assists the with a focus on cyber risk mitigation and com- gard to other real-time payment-related user Board in fulfilling its oversight responsibilities pliance. requests, such as the delivery of value-added • Addressing recommendations for the evo- with regards to the risk tolerance of the Com- solutions. lution and standardisation of financial re- pany and the risk management and compli- porting to assist regulatory compliance and ance frameworks. d Strategy and Policy Committee The SPC further supported and closely fol- to ensure predictability of overall business lowed the kick-off and progress of the EURO1 performance to gain deeper financial in- The BRC is composed of Board members The Strategy and Policy Committee (SPC) ad- future positioning programme and accompa- sight and maintain tight control of finances; designated by the Board; meetings of the BRC dresses the longer-term planning for the posi- nied the implementation of the proposal to in- are attended by the Company’s Chief Execu- tioning and the development of the Company, troduce fluctuating maximum credit and debit • Introduction of new key performance indi- tive Officer, the Chief Risk Officer and the its payment infrastructure systems and solu- caps in the system. cators for finance and for audit; General Counsel. tions as well as potential new service offer- ings. In 2017, the Committee met five times. The Committee also provided input to and • Examination of the statutory and consoli- Four regular BRC meetings took place in 2017. guidance on the user consultation process for dated financial statements for 2017 in view One additional BRC meeting was combined In 2017 and early 2018, the SPC closely ac- STEP2, and related considerations on chang- of their closing in 2018; with a workshop on cyber security for the full companied the evolution of EBA CLEARING’s es to the STEP2 settlement model in light of Board. instant payment development project and pro- revised requirements of the SIPS Regulation. • Review of the 2018 budget; vided guidance on the way forward regarding In line with its mission, the BRC also moni- relevant strategic topics. These included, The SPC further engaged in considerations • Review of the internal audit 2017 activity tored the maintenance of the Risk Manage- among others, the access and participation around the general future positioning of the report and approval of the internal audit ment Framework and the follow-up of out- model, the provision of different connectivity EURO1, STEP1 and STEP2 Services based on plan for 2018; standing risks in accordance with the options, use of standards to ensure interoper- a close monitoring of relevant developments Company’s Risk Treatment Plan. The BRC re- ability and considerations around the provi- in the European and global payments ecosys- • Critical service providers assessment and ceived reports on the top actual and emerging sion of TIPS ‘Instructing Party’ functionality. tem. preparation of the operational audits. risks and monitored the follow-up actions re-

104 Corporate Governance lating thereto. 104 Corporate Governance eba clearing Annual Report 2017 65 eba clearing Annual Report 2017 64 e Nomination and Governance Chairman, (iv) preparing for changes to corpo- b Identical user consultation scopes of activity, which may warrant different Committee rate govenance documents including the processes for the SIPS operated by models for consultation and decision-making. Board nomination policy, and (v) assessing the Company The user say governance for the different sys- The Nomination and Governance Committee options and formulating recommendations to tems and services is designed to effectively (NGC) assists the Board in implementing and establish compliance with the requirement of Effective 2 January 2018, an identical struc- respond to the stakeholders’ needs for effi- reviewing the nomination policy and process the revised SIPS Regulation to include an ‘in- ture has been adopted for user consultation cient organisation of the different groups and for Board members and the policy and meth- dependent director’ within the meaning as de- for the two SIPS operated by the Company. their remit. odology for Board and individual Board mem- fined in the Revised SIPS Regulation. The format of the user consultation processes ber evaluation. The NGC further monitors the for the EURO1 System and the STEP2-T Sys- To allow the Board and management to take effectiveness of the Company’s governance tem involves the establishment of a Business account of the interests of the users in its de- framework. f Remuneration Committee Committee. Business Committees are consul- cision-making in relation to the design, rules, tative bodies providing recommendations to overall strategy and major changes to the var- During 2017, five meetings of the NGC were The Board is further assisted by the Remuner- the Board. ious systems and services, and, apart from the held. The NGC addressed (i) the outcome and ation Committee in establishing a sound re- business committees established for the SIPS guidance on follow-ups of the annual Board muneration framework, which fosters high All decisions affecting a system for which a operated by the Company, the Company has performance evaluation for 2016, (ii) the prep- performance and motivation of staff members business committee has been established are established the following user groups: aration of the reply by the Company to the in line with the resourcing strategy and the in- made by the Board upon consultation with the public consultation on possible amendments terests of the Company. The Remuneration relevant Business Committee; accordingly, the i rt1 Working Group to the SIPS Regulation regarding governance, Committee has delegated powers from the decision-making process for major changes to Its objective is to serve as a forum in which (iii) the nomination process for election of Board in these matters. EURO1 has changed, and those decisions will direct participants in the RT1 System can Board members at the Shareholders Meeting be made by the Board (and no longer by the discuss and provide feedback on the de- of 19 June 2017, (iv) the composition of the Shareholders Meeting). velopment, change management and evo- EURO1 Business Committee and the STEP2 3 User say governance lution of the RT1 Service, as well as related Business Committee and the preparation for Business Committees are chaired by a Board initiatives. nomination of the Chairs of such Business a Relations with users member. Committees, (v) preparations for the new re- ii STEP2 CC Group quirement of the Revised SIPS Regulation for In order to ensure that all types of users are Its objective is to serve as a forum in which at least one ‘independent director’ as defined considered in the design and evolution of its c User consultations for systems and direct participants in the STEP2 CC Ser- in the Revised SIPS Regulation, (vi) scoping systems and offerings, the Company main- services other than EURO1 and vice can discuss and provide feedback on and launch of the annual Board performance tains a broad range of communication chan- STEP2-T the development, change management evaluation for 2017, (vii) monitoring of the out- nels with its (current and potential) users and and evolution of the service. come of the oversight assessment of the re- other stakeholders. There are regular country The Company consults its users, communities form of the governance and user say arrange- or regional user meetings with the participa- of users and other stakeholders (as required) iii STEP1 User Advisory Group ments conducted during 2017, and (viii) initial tion of all respective users and attended by in the event of changes that affect the Com- Its objective is to serve as a forum of the preparations for candidate profile options for a EBA CLEARING executives, where ongoing pany’s services and/or service platforms. The STEP1 user community and as a channel replacing Chairman. activities and projects are discussed and feed- consultation process on changes is, in princi- to express requirements or proposals to- back is registered. In the context of specific ple, composed of the following steps: submis- wards the Company’s Board. From January to May 2018, the activities of projects, steering groups or task forces may sion of proposals by or to the relevant stake- the NGC were devoted to (i) the review of the be created to ensure efficient liaison through- holders; evaluation of the proposals by the outcome of the Board performance evaluation out the project or initiative. Company, including technical feasibility and for 2017, (ii) accompanying the nomination cost analysis; and submission of a proposal to process for the co-optation of one Board Furthermore, the Company organises individ- the Board for decision on implementation of member as well as for the candidates to fill ual user visits, and when appropriate or de- all or part of the recommended changes. one third of the seats on the Board, which will sired, roadshows and information campaigns. become vacant at the end of the Shareholders The adaptations to the governance arrange- Meeting in June 2018, (iii) assisting the Board ments for the SIPS operated by EBA CLEAR- in the nomination process for a replacing ING do not impair the flexibility required to ac- commodate specificities in relation to given services or initiatives as well as evolving 104 Corporate Governance 104 Corporate Governance eba clearing Annual Report 2017 67 eba clearing Annual Report 2017 66 d Expert Groups and other iii treasury and Liquidity Group (TLG) 4 Other stakeholders 5 Management expert fora Its mission is to act as an advisory expert group relating to the management and use Potential users and other stakeholders Hays Littlejohn has been serving as CEO of The following Expert Groups have been estab- of liquidity within the systems operated by Apart from the consultation and coordination EBA CLEARING since 1 May 2015. lished: EBA CLEARING. with user and expert groups mentioned above, the Company organises roadshows and infor- The CEO is responsible for the day-to-day i operations & Technical Group (OTG) Expert Groups provide expert advice for all mation sessions for wider stakeholder groups management of the Company, and delegates Its mission is to analyse and review pro- systems for which a Business Committee is when and where relevant. Consultations may authorities to the Heads of Unit and staff of the posals and to formulate recommendations established, and can be solicited for input in also take place on an ad-hoc basis. Company. As per best practice and in line with relating to operational, procedural, func- relation to other systems or services when re- the requirements of the SIPS Regulation, the tional and technical aspects of the systems quired or appropriate. Overseer and policy stakeholders Board has adopted a set of codes and policies of EBA CLEARING. The Company’s mission underpins its resolve including a code of ethics, a remuneration pol- The Company establishes other expert fora in to contribute to industry initiatives and to en- icy and a policy on selection, monitoring and ii legal Advisory Group (LAG) accordance with identified needs. For exam- gage with industry and policy stakeholders, removal of members of management. Its mission is to analyse and review pro- ple, a EURO1 Future Positioning Group was including regulators, overseers, the European posals from a legal point of view and to for- created in 2017 to assist in the analysis and Payments Council, standardisation bodies, Prior to his role as CEO of EBA CLEARING, mulate legal recommendations regarding review of options and the formulation of rec- and the constituencies entrusted with policy Hays Littlejohn held managerial and executive the same. The LAG also assists in the mon- ommendations regarding the EURO1 System setting. positions in global transaction banking at UBS itoring of legal projects and formulates and its positioning and value proposition in the AG. Having joined the Swiss bank in 1991, recommendations regarding the resourcing medium to long term. Hays covered a wide range of areas during his for given projects. international career at UBS, including informa- tion technology, operations, trade finance, product management, relationship manage- ment, sales, business development and mar- ket infrastructures. Hays also served on the Board of CLS and, for more than 10 years, on

104 Corporate Governance 104 Corporate Governance the Board of EBA CLEARING. eba clearing Annual Report 2017 69 eba clearing Annual Report 2017 68 6 Country representatives 7 Transfer of shares and changes in share capital of EBA CLEARING

The following changes occurred in 2017 and in the first few months of 2018 as far as EBA CLEARING share capital and EBA CLEARING Shareholders are concerned:

• With effect as of 1 January 2017, Banco BPM SpA became EURO1 Participant and EBA CLEARING Shareholder in replace- Janina Grönholm Eva Herskovicova Katja Heyder ment of Banco Popolare SC. Baltic Countries, Czech Republic, Hungary, Austria, Bulgaria, Croatia, Cyprus, Finland and Poland Slovakia and Slovenia Germany, Greece, Liechtenstein, Luxembourg, Malta, Romania, • With effect as of 2 January 2017 Nordea Spain and Switzerland Bank AB (publ), Finnish Branch became EURO1 Participant and EBA CLEARING Shareholder in replacement of Nordea Bank Finland plc.

• With effect as of 9 October 2017, National Westminster Bank Plc became EURO1 Participant and EBA CLEARING Share- holder in replacement of The Royal Bank of Erwin Kulk Petra Plompen David Renault Scotland Plc. Portugal Belgium France

• With effect as of 6 November 2017, Banco Popular Español S.A. withdrew as EURO1 Participant and as EBA CLEARING Share- holder.

• With effect as of 1 April 2018, The Bank of Tokyo-Mitsubishi UFG, Ltd (EURO1 Partici- pant and EBA CLEARING shareholder) changed its name to MUFG Bank, Ltd.

Jette Simson Alan Taylor Daniela Vinci • With effect as of 9 April 2018, Citibank Eu- Scandinavian Countries United Kingdom and Ireland Italy rope Plc became EURO1 Participant and EBA CLEARING shareholder in replace- ment of Citibank NA.

As of 31 December 2017, the share capital of EBA CLEARING amounted to EUR 51,000.

André Vink The Netherlands 104 Corporate Governance 104 Corporate Governance eba clearing Annual Report 2017 71 eba clearing Annual Report 2017 70 Oversight of the Payment Systems of EBA CLEARING

1 Oversight of euro1 and step2-T mined by an appraisal of financial impact, de- • Systemically Important Retail Payment may attract an ex ante or ex post oversight as- gree of market penetration, a system’s cross- Systems (SIRPS) – there are two SIRPS; sessment. The result of oversight assess- The EURO1 System is overseen by the ECB as border activity and whether the system ments is formally advised to EBA CLEARING. Competent Authority, with voluntary participa- provides settlement for other financial market • Prominently Important Retail Payment Sys- The Overseer further conducts comprehensive tion by national central banks of the Eurozone. infrastructures. No distinction is made for the tems (PIRPS) – there are nine PIRPS; oversight assessments of the systems it over- EURO1 has been under oversight of the ECB application of the Regulation between large- sees with a regular frequency. since its launch. value and retail payment systems. • Other Retail Payment Systems (ORPS) – there are 22 ORPS. An annual plan for oversight activities relating The STEP2-T System is also under the over- Under the SIPS Regulation, corrective meas- to SIPS is established by the ECB and notified sight of the ECB as Competent Authority with ures and/or sanctions may be imposed in the STEP2-T also classifies as a European Sys- to EBA CLEARING at the beginning of each the participation by national central banks of case of broad, partial or non-compliance. The temically Important Retail Payment System year as part of the exercise of continuous the Eurozone. methodology to calculate sanctions came into (ESIRPS) as opposed to a National Systemi- oversight. effect on 6 December 2017. cally Important Retail Payment System In 2014, STEP2-T and EURO1 were identified (NSIRPS). by decision of the Governing Council of the EBA CLEARING is in the unique position of 3 Oversight of step2 Card Clearing ECB as systemically important payment sys- being the SIPS Operator of two SIPS. tems under the Regulation on oversight re- 2 Dialogue with the Overseer and The primary oversight responsibility for STEP2 quirements for systemically important pay- The ECB publishes on its website the list of oversight assessments for sips CC is entrusted to the Deutsche Bundesbank ment systems (the SIPS Regulation). The SIPS systems that fall under the SIPS Regulation as lead Overseer, with the participation of the Regulation implements the Principles for Fi- and of other classified systems. In line with the Formal oversight meetings between the ECB/ ECB. nancial Market Infrastructures, issued by Revised Oversight Framework for Retail Pay- Eurosystem and EBA CLEARING are sched- CPMI and IOSCO in 2012, and applies to sys- ment Systems of the Eurosystem and with ref- uled to take place on a semi-annual basis with In accordance with the Revised Oversight temically important payment systems in the erence to the most current published list of the participation of the CEO of the Company. Framework for Retail Payment Systems of the Eurozone. The system’s importance is deter- payment systems according to the Eurosys- Regular exchanges take place on any plans Eurosystem, the Principles for Financial Mar- tem’s payment system classification, a dis- and upcoming changes in relation to topics ket Infrastructures and the Oversight expecta- tinction is made in relation to retail payment within the scope of the SIPS Regulation. A tions for links between retail payment systems

104 Oversight of the Payment Systems systems between: 104 Oversight of the Payment Systems classification is in place according to which eba clearing Annual Report 2017 72 eba clearing Annual Report 2017 73 the Overseer determines whether changes (OELRPS) form the core of the standards to be 5 Eurosystem cyber resilience applied to retail payment systems other than strategy SIRPS by the Eurosystem central banks. Nine principles of the PFMIs apply to both PIRPS The global guidance on cyber resilience for fi- and ORPS, of which six with the same level of nancial market infrastructures was published strictness and three with a slight differentia- by the Committee on Payments and Market tion (namely Governance, Participant Default Infrastructures and the Board of the Interna- Rules and Procedures, and Access and Par- tional Organisation of Securities Commissions ticipation Requirements). (CPMI-IOSCO) in June 2016. FMIs were re- quired from an oversight perspective to apply Formal classification of STEP2 CC as a retail the guidance immediately, and overseers have payment system category is based on the been working to develop an oversight ap- market share of the system at euro area coun- proach for assessing the FMIs within their ju- try level. risdiction against the guidance.

Regular formal oversight meetings take place As part of the Eurosystem’s oversight strategy between Deutsche Bundesbank/ECB and EBA for cyber resilience of financial market infra- CLEARING. Upcoming changes in relation to structures, the ECB launched a public consul- the STEP2 CC system are advised to Deutsche tation on 10 April 2018 calling on financial Bundesbank in view of a classification to de- market infrastructures (FMIs) and other inter- termine whether changes will attract a dedi- ested parties to give their input on draft cyber cated oversight assessment. resilience oversight expectations. The latter are aimed at operationalising the global CPMI- IOSCO guidance published in June 2016. 4 Oversight of RT1 FMIs and other interested parties were invited to submit comments on the draft cyber resil- EBA CLEARING’s The primary oversight responsibility for RT1 ience oversight expectations by 17:00 CET on has been assigned to the ECB, with participa- 5 June 2018. tion by Eurosystem central banks. Subsidiary PRETA On 2 May 2018, the ECB published the Euro- Prior to and in anticipation of the start of live pean Framework for Threat Intelligence-based operations of the RT1 System, RT1 has been Ethical Red Teaming (TIBER-EU), which is the classified as an Other Retail Payment System first Europe-wide framework for controlled In relation to EBA CLEARING’s fully-owned In June 2017, PRETA launched the Open (ORPS). and bespoke tests against cyber attacks in the subsidiary, PRETA S.A.S., EBA CLEARING Banking Europe Initiative to respond to market financial market. The TIBER-EU framework took note of the continued positive evolution needs for a centralised directory for account- The oversight standards for ORPS are appli- has been designed for national and European of the MyBank solution of PRETA during the servicing payment service providers (AS- cable to RT1. authorities and entities that form the core fi- period under report. In line with its business PSPs) and third-party providers (TPPs) to fulfil nancial infrastructure, including entities with plan, MyBank continued to further increase its PSD2 compliance requirements with regard to Since 2018, regular formal oversight meetings cross-border activities that fall within the regu- market penetration in Italy, Greece and Spain Access to Account. With the support of 30 finan- take place between the ECB and EBA CLEAR- latory remit of several authorities. in particular. cial institutions and industry service providers, ING. The RT1 System started live operations PRETA is currently working on the delivery of on 21 November 2017. directory services to meet these needs.

104 Oversight of the Payment Systems 104 EBA CLEARING’s Subsidiary PRETA eba clearing Annual Report 2017 74 eba clearing Annual Report 2017 75 Financial Situation: Statutory Accounts*

EBA CLEARING completed the fiscal year The Company improved its cash position, in- The revenues continued to develop positively a growth of the STEP2 market share in certain 2017 with a positive net result before consoli- creasing in 2017 the amount of its mandatory in 2017 due to an increased usage of the sys- communities, slightly offset by a small reduc- dation of EUR 4.3 M and a cash position of cash reserve to cover General Business Risk, tems, both in terms of participants and vol- tion of traffic in EURO1 (-1%). EUR 14.2 M (vs EUR 8.3 M in 2016). as foreseen under the SIPS Regulation, and umes. delivered a solid business performance. The average price per transaction in STEP2 The fixed fees amounted to EUR 18.3 M, in- continued to decrease in 2017 because of creased by EUR 583 K compared to 2016, economies of scale and more participants mainly thanks to additional participants in the signing up for large volume pricing options. Overview of revenues STEP2 Services, in spite of the anticipated consolidation of banks. The other fees amounted to EUR 2.4 M, in- The revenues increased by EUR 1.4 M creased by EUR 109 K compared to 2016, (+ 2% vs 2016), totalling EUR 67.4 M. The transaction fees amounted to EUR 46.7 which can be partially explained by one-off M, increased by EUR 660 K compared to exit fees generated from the withdrawal of 2016, due to strong growth in STEP2 traffic, EURO1 Participants and additional joining Profit & Loss Statement 2016 2017 2017 vs 2016 thanks to a market-wide volume increase and fees from new Direct STEP2 Participants.

Fixed fees 17,745 18,327 583

Transaction fees 46,036 46,696 660

Other fees 2,297 2,406 109

Revenues 66,078 67,430 1,352

* All tables in this section are in euro (EUR) thousand,

104 Financial Situation: Statutory Accounts based on rounded figures; in the text, abbreviations are 104 Financial Situation: Statutory Accounts used for thousands (K) and millions (M). eba clearing Annual Report 2017 76 eba clearing Annual Report 2017 77 Overview of direct costs Gross margin

The direct costs stabilised compared to the The gross margin went up by EUR 1.6 M (+7% 2016 level (–0.5% vs 2016), totalling EUR 43.8 M. vs 2016), totalling EUR 23.7 M.

Profit & Loss Statement 2016 2017 2017 vs 2016 Profit & Loss Statement 2016 2017 2017 vs 2016

Operating charges 39,726 40,183 531 Revenues 66,078 67,430 1,352

Other charges 4,287 3,594 (693) – Direct costs 44,013 43,777 (236)

Direct costs 44,013 43,777 (236) Gross margin 22,065 23,653 1,588

The transaction-based charges from providers The other charges amounted to EUR 3.6 M, The positive development of the gross margin amounted to EUR 40.2 M, which corresponds which corresponds to a decrease by EUR 693 was the primary driver for the continuing year- to an increase by EUR 531 K in line with K, due to the reduction of the amortisation on-year increase of the Company’s cash posi- the 2017 STEP2 traffic growth and accounts charges for the STEP2 Services and more tion, improving its ability to self-fund neces- for most of the changes under operating capitalisation of development costs compared sary investments. charges. to the previous year. 104 Financial Situation: Statutory Accounts 104 Financial Situation: Statutory Accounts eba clearing Annual Report 2017 78 eba clearing Annual Report 2017 79 Overview of operating costs The earnings before taxes (EBT) amounted to pan-European tax liabilities, included in the EUR 7.7 M, which represented an increase by EUR 562 K under the ‘Exceptional revenue, An increase of operating costs by EUR 1.4 M, EUR 206 K compared to 2016. expense’ item. total EUR 16 M, +9.5 % vs 2016, mainly due to the ongoing development of our human capital. During 2017, the Company had to create a The estimated income tax and participation new accrual for exceptional costs linked to its item stands at EUR 2.8 M for 2017.

Profit & Loss Statement 2016 2017 2017 vs 2016

Human resources 9,747 10,956 1,209

External relations 844 841 (3) Cash flow The net cash position of EBA CLEARING con- tinued to considerably gain in strength, evolv- Consultancies 841 835 (6) The cash flow generated by the Company’s ing from EUR 8.3 M in 2016 to EUR 14.2 M at Equipment, services 697 731 34 activities in 2017 was healthy at EUR 6.5 M (vs the end of 2017, benefitting from the deferral of EUR 7.7 M in 2016). investments related to STEP2 into 2018 and Rent, premises, maint. & cleaning 2,030 2,194 164 2019. Other expenses, revenues 437 423 (14)

Operating costs 14,597 15,980 1,382 Cash Flow Statement 2016 2017 2017 vs 2016

Result before consolidation 4,800 4,320 (480)

Continuous efforts in controlling and reducing Resources item increased by EUR 1.2 M, due Amortisation / Depr. / Provision reversal (+/–) 2,906 2,174 (732) operating costs maintained non-HR related to increasing activities and the launch of a new Cash flow 7,706 6,494 (1,212) costs slightly above 2016 levels. The Human service.

Combined with continuous improved cash On 28 December 2017, the Company sub- and working capital management (stable re- scribed to a capital increase of its subsidiary Overview of eba clearing resources ceivables year on year), the cash generated PRETA for an amount of EUR 2.5 M by com- from operating activities of EUR 6.5 M permit- pensation with the receivables held on PRETA. Evolution of Full-Time Equivalents (FTEs) 2016 2017 2017 vs 2016 ted the funding of new releases for the existing services and the launch of the RT1 instant The equity position of EBA CLEARING before Average annual FTEs 75.4 77.3 2 payment system. consolidation with PRETA reached EUR 24.7 M with a net result of EUR 4.3 M. FTEs at year-end 75 82 7 On the liabilities side, it should be noted that payables increased by EUR 2.6 M, mainly due Since the creation of the Company, no divi- to the collection of the second half of the cred- dends have been paid to shareholders. It is it note for the instant payment infrastructure proposed to maintain this policy and allocate project in 2017. This is foreseen to be repaid the result of the period under report to retained Overview from gross margin to net result to funding banks in the future based on ser- earnings. vice usage. Profit & Loss Statement 2016 2017 2017 vs 2016

Gross margin 22,065 23,653 1,588

– Operating costs 14,597 15,980 1,382

Earnings before taxes 7,468 7,673 206

– Exceptional revenue, expense (299) 562 861

– Income taxes and participation 2,967 2,791 (176) 104 Financial Situation: Statutory Accounts 104 Financial Situation: Statutory Accounts Net result before consolidation 4,800 4,320 (480) eba clearing Annual Report 2017 80 eba clearing Annual Report 2017 81 Statutory balance sheet

without consolidated assets and liabilities

Assets 2016 2017 2017 vs 2016

Current assets Net value Net value Net value

Cash position 8,304 14,180 5,876

Receivables 16,287 16,296 9

Receivables Total 24,591 30,476 5,885

Accounts receivable as of 31 December 2017, amounting to EUR 16.3 M, may be split by due Fixed assets date as follows: Intangible fixed assets 5,129 7,541 2,412

Before due date 1 to 30 days 31 to 60 days 61 to 90 days More than 90 days total Tangible fixed assets 751 485 (266) after due date after due date after due date after due date Intangible fixed assets – under construction 1,226 509 ( 717)

Customers Tangible fixed assets – under construction 1 92 91 14,612 7 0 56 6 14,680 Financial fixed assets 5,232 5,679 447 Other receivables Total 12,339 14,306 1,967 1,616 – – – – 1,616

99.58% 0.04% 0% 0.34% 0.04% 100% Total assets 36,930 44,782 7,852 total receivables 16,296

Liabilities 2016 2017 2017 vs 2016 Payables Payables 16,529 19,117 2,588

Accounts payable as of 31 December 2017, Provision for risk and liabilities 0 943 943 amounted to EUR 19.1 M, including EUR 5 M Equity 20,401 24,722 4,321 linked to the instant payment project collected in 2016 and 2017 that must be repaid follow- Retained earnings & shareholders’ equity 15,602 20,401 4,800 ing the delivery of the instant payment service. Result of the year 4,800 4,320 (480)

Total liabilities 36,930 44,782 7,852 Before due date 1 to 30 days 31 to 60 days 61 to 90 days More than 90 days total after due date after due date after due date after due date

Suppliers / providers 306 3,466 6,665 135 0 10,572

Other payables 3,545 – – – 5,000 8,545

20.15% 18.13% 34.86% 0.71% 26.16% 100% 104 Financial Situation: Statutory Accounts 104 Financial Situation: Statutory Accounts total payables 19,116 eba clearing Annual Report 2017 82 eba clearing Annual Report 2017 83 Seilbahnen in Österreich

Cable cars of all types carry an estimated 500 to 550 million Appendices passengers each year in Austria.

Elétricos de Lisboa

The first tramway in Lisbon entered service on 17 November 1873, as a horsecar line. On 30 August 1901, Lisbon’s first electric tramway commenced operations. Today, it comprises six urban lines. Aside from the obvious tourist attraction, those six remaining lines are still very important because sections

104 Appendices 104 Appendices of the city’s topography can eba clearing Annual Report 2017 84 eba clearing Annual Report 2017 85 only be crossed by small trams. Appendix 1 Appendix 2 List of EBA CLEARING Shareholders List of Participants in EURO1/STEP1 Status: 30 April 2018 (51 Shareholders) Status: 30 April 2018

ABN AMRO Bank N.V. ING Bank N.V. ABANCA Corporación Bancaria S.A. STEP1 Bank Allied Irish Banks Plc Intesa Sanpaolo S.p.A. ABN AMRO Bank N.V. EURO1 Participant Alpha Bank A.E. JPMorgan Chase Bank N.A. Allied Irish Banks, p.l.c. EURO1 Participant Banca Monte dei Paschi di Siena S.p.A. KBC Bank N.V. Allied Irish Bank Plc (GB) EURO1 Sub-Participant Banco Bilbao Vizcaya Argentaria S.A. Landesbank Baden-Württemberg First Trust Bank EURO1 Sub-Participant Banco BPM S.p.A. Landesbank Hessen-Thüringen Girozentrale Aktia Bank PLC STEP1 Bank Banco Comercial Português S.A. Lloyds Bank Plc Allgemeine Sparkasse Oberösterreich Bank AG STEP1 Bank Banco de Sabadell S.A. MUFG Bank, Ltd. Alpha Bank AE EURO1 Participant Banco Santander S.A. National Bank of Greece S.A. Banca del Fucino STEP1 Bank Bank of America N.A. National Westminster Bank Plc Banca di Imola S.p.A. STEP1 Bank Banque et Caisse d’Epargne de l’Etat, Luxembourg Nordea Bank AB (publ) Finnish Branch Banca Monte dei Paschi di Siena S.p.A. EURO1 Participant Banque Fédérative du Crédit Mutuel Novo Banco, S.A. Banca Widiba SpA EURO1 Sub-Participant Banque Internationale á Luxembourg S.A. OP Corporate Bank Plc MPS Leasing & Factoring S.p.A. EURO1 Sub-Participant Barclays Bank Plc OTP Bank Plc. Banca Popolare del Lazio STEP1 Bank BNP Paribas S.A. Rabobank Nederland Banca Popolare di Sondrio STEP1 Bank BPCE Raiffeisen Bank International AG Banca Sella S.p.A. STEP1 Bank CaixaBank S.A. Skandinaviska Enskilda Banken AB Banco BAI Europa SA STEP1 Bank Citibank Europe Plc Société Générale Banco Bilbao Vizcaya Argentaria S.A. EURO1 Participant Commerzbank AG Standard Chartered Bank Banco BPM S.p.A. EURO1 Participant Crédit Agricole S.A. Svenska Handelsbanken AB Banca Popolare di Milano S.p.A. EURO1 Sub-Participant Danske Bank A/S Swedbank AB Banco Comercial Português S.A. EURO1 Participant Deutsche Bank AG UBS AG Banco Cooperativo Español SA STEP1 Bank DNB Bank ASA UniCredit S.p.A. Banco de Sabadell S.A. EURO1 Participant DZ BANK AG Wells Fargo Bank, N.A. Banco Santander S.A. EURO1 Participant ERSTE Group Bank AG Banco Popular Español, S.A. EURO1 Sub-Participant Eurobank Ergasias S.A. Banco Santander S.A., Frankfurt Branch EURO1 Sub-Participant HSBC France Banco Santander Totta, SA EURO1 Sub-Participant Santander Consumer Bank AG EURO1 Sub-Participant Santander UK Plc EURO1 Sub-Participant Bank für Tirol und Vorarlberg AG STEP1 Bank Bank GPB International S.A. STEP1 Bank Bank of Åland PLC STEP1 Bank Bank of America N.A., Frankfurt Branch EURO1 Participant The Bank of New York Mellon, Frankfurt Branch STEP1 Bank Bankinter SA STEP1 Bank Banque et Caisse d’Epargne de l’Etat EURO1 Participant Banque Internationale à Luxembourg S.A. EURO1 Participant Banque Michel Inchauspé – BAMI STEP1 Bank Banque Palatine STEP1 Bank Barclays Bank Plc EURO1 Participant Barclays Bank Plc, Frankfurt Branch EURO1 Sub-Participant Berliner Sparkasse – Landesbank Berlin AG STEP1 Bank BKS Bank AG STEP1 Bank 104 Appendix 1 104 Appendix 2 eba clearing Annual Report 2017 86 eba clearing Annual Report 2017 87 BNP Paribas S.A. EURO1 Participant DNB Bank ASA, Filial Finland EURO1 Participant Banca Nazionale del Lavoro S.p.A. EURO1 Sub-Participant DNB Bank ASA, Filial Danmark EURO1 Sub-Participant BGL BNP Paribas EURO1 Sub-Participant DNB Bank ASA, Filial Sverige EURO1 Sub-Participant BNP Paribas Fortis EURO1 Sub-Participant DNB Bank ASA, Filiale Deutschland EURO1 Sub-Participant BPCE EURO1 Participant DNB Bank ASA, London Branch EURO1 Sub-Participant BRED Banque Populaire EURO1 Sub-Participant DNB Bank ASA, Norway EURO1 Sub-Participant NATIXIS EURO1 Sub-Participant DZ Bank AG EURO1 Participant BPER Banca S.p.A. STEP1 Bank Emirates NBD PJSC STEP1 Bank CaixaBank S.A. EURO1 Participant ERSTE Group Bank AG EURO1 Participant Caixa Central de Crédito Agrícola Mútuo STEP1 Bank Eurobank Ergasias S.A. EURO1 Participant Cassa di Risparmio di Cesena S.p.A. STEP1 Bank Hellenic Bank Public Company Ltd. STEP1 Bank Cassa di Risparmio di Fermo S.p.A. STEP1 Bank HSBC France EURO1 Participant Cassa di Risparmio di Ravenna S.p.A. STEP1 Bank HSBC Bank Plc EURO1 Sub-Participant CECABANK, S.A. STEP1 Bank ICCREA Banca STEP1 Bank Caja de Ahorros y Monte de Piedad STEP1 Sub-Participant ING Bank NV EURO1 Participant de Ontinyent Bank Mendes Gans N.V. EURO1 Sub-Participant Cajasur Banco, S.A. STEP1 Sub-Participant ING Bank NV, France EURO1 Sub-Participant Colonya Caixa Pollença STEP1 Sub-Participant ING Bank Slaski S.A. EURO1 Sub-Participant Liberbank, S.A. STEP1 Sub-Participant ING Belgium N.V./S.A. EURO1 Sub-Participant Unicaja Banco, S.A. STEP1 Sub-Participant ING Luxembourg S.A. EURO1 Sub-Participant Citibank Europe Plc EURO1 Participant Intesa Sanpaolo S.p.A. EURO1 Participant Citibank N.A. EURO1 Sub-Participant Intesa Sanpaolo Bank Luxembourg S.A. EURO1 Sub-Participant Commerzbank AG EURO1 Participant Intesa Sanpaolo S.p.A. (France) EURO1 Sub-Participant Crédit Agricole S.A. EURO1 Participant Joh. Berenberg, Gossler und Co. KG STEP1 Bank CA-CIB - Crédit Agricole Corporate EURO1 Sub-Participant JPMorgan Chase Bank, N.A. EURO1 Participant and Investment Bank J.P. Morgan Bank (Ireland) Plc EURO1 Sub-Participant Crédit Agricole CariParma SpA EURO1 Sub-Participant J.P. Morgan Bank Luxembourg S.A. EURO1 Sub-Participant Crédit Agricole CariSpezia SpA EURO1 Sub-Participant JPMorgan Chase Bank, N.A., Madrid Branch EURO1 Sub-Participant Crédit Agricole Friuladria SpA EURO1 Sub-Participant JPMorgan Chase Bank, N.A., Paris Branch EURO1 Sub-Participant Crédit Lyonnais EURO1 Sub-Participant JPMorgan Chase Bank, N.A., London Branch EURO1 Sub-Participant Crédit Mutuel - CIC Banques EURO1 Participant JPMorgan Chase Bank, N.A., Amsterdam Branch EURO1 Sub-Participant Crédit Industriel et Commercial EURO1 Sub-Participant JPMorgan Chase Bank, N.A., Brussels Branch EURO1 Sub-Participant Crédit Mutuel Arkéa STEP1 Bank JPMorgan Chase Bank, N.A., Milan Branch EURO1 Sub-Participant Credito Valtellinese STEP1 Bank KBC Bank N.V. EURO1 Participant Credito Siciliano SpA STEP1 Sub-Participant Kookmin Bank International Ltd. STEP1 Bank Danske Bank A/S EURO1 Participant Kutxabank S.A. STEP1 Bank Danske Bank A/S, Sweden Branch EURO1 Sub-Participant La Banque Postale STEP1 Bank Danske Bank A/S, Ireland Branch EURO1 Sub-Participant Caja Laboral Popular, Coop. de Crédito STEP1 Bank Danske Bank A/S, Norway Branch EURO1 Sub-Participant Landesbank Hessen-Thüringen (HELABA) EURO1 Participant Danske Bank A/S, Finland Branch EURO1 Sub-Participant Lloyds Bank Plc EURO1 Participant Northern Bank Ltd (trading as Danske Bank) EURO1 Sub-Participant Mashreq Bank psc STEP1 Bank Deutsche Bank AG EURO1 Participant MUFG Bank, Ltd. EURO1 Participant Deutsche Bank Privat- und Geschäftskunden AG EURO1 Sub-Participant National Bank of Greece S.A. EURO1 Participant

104 Appendix 2 104 Appendix 2 National Westminster Bank Plc EURO1 Participant eba clearing Annual Report 2017 88 eba clearing Annual Report 2017 89 Royal Bank of Scotland Plc EURO1 Sub-Participant Appendix 3 List of Direct Participants in step2-t Status: 30 April 2018

Nexi SpA STEP1 Bank STEP2 SCT Barclays Bank Plc – Spain Nordea Bank AB (publ), Finnish Branch EURO1 Participant Barclays Bank UK Plc Nordea Bank AB (publ), Filial i Norge EURO1 Sub-Participant ABN AMRO Bank N.V. Belfius Bank SA/NV Nordea Bank AB (publ), Frankfurt Branch EURO1 Sub-Participant Adyen B.V. BGL BNP Paribas Nordea Bank AB (publ), Sverige EURO1 Sub-Participant Aktia Bank Plc BNP Paribas – Dublin Branch Nordea Danmark, Filial af Nordea Bank AB (publ) EURO1 Sub-Participant Allied Irish Banks, Plc BNP Paribas Fortis SA/NV Oberbank AG STEP1 Bank Alpha Bank Cyprus Ltd BNP Paribas S.A. Oberbank AG, Germany STEP1 Sub-Participant Arbejdernes Landsbank A/S Bonum Bank Plc Oberbank AG, Slovakia STEP1 Sub-Participant AS LHV Pank BPCE OP Corporate Bank Plc EURO1 Participant AS SEB Pank bpost SA de droit public OP Corporate Bank PLC, Estonian Branch EURO1 Sub-Participant Banca Carige SPA BRED Banque Populaire OP Corporate Bank PLC, Latvia Branch EURO1 Sub-Participant Banca d’Italia Bunq B.V. OP Corporate Bank PLC, Lithuania Branch EURO1 Sub-Participant Banca Monte dei Paschi di Siena SpA Caixa Central de Crédito Agrícola Mútuo OTP Bank Plc. EURO1 Participant Banca Popolare di Sondrio SCPA Caixa Geral de Depósitos S.A. Rabobank Nederland EURO1 Participant Banca Sella Holding SpA CaixaBank S.A. Raiffeisen Bank International AG EURO1 Participant Banco Bilbao Vizcaya Argentaria S.A. Cassa Centrale Banca – Raiffeisenlandesbank Oberösterreich AG STEP1 Bank Banco BPI S.A. Credito Cooperativo del Nord Est SpA Raiffeisen-Landesbank Tirol AG STEP1 Bank Banco BPM S.p.A. Cassa Depositi e Prestiti SpA S-Bank Ltd. STEP1 Bank Banco Comercial Português S.A. Cassa di Risparmio di Parma e Piacenza SpA SECB Swiss Euro Clearing Bank GmbH STEP1 Bank Banco de España CECABANK S.A. Skandinaviska Enskilda Banken EURO1 Participant Banco de Sabadell S.A. Central Bank of Savings Banks Finland Plc AS SEB Pank, Estonia EURO1 Sub-Participant Banco Popular Español S.A. Citibank Europe Plc SEB AB (publ.) Frankfurt Branch EURO1 Sub-Participant Banco Santander S.A. Clydesdale Bank Plc SEB Banka, Latvia EURO1 Sub-Participant Banco Santander Totta S.A. Commerzbank AG Skandinaviska Enskilda Banken S.A., EURO1 Sub-Participant Bank of Aland Plc Co-operative Central Bank Ltd Luxembourg Bank of America, NA, Frankfurt Branch Crédit Agricole S.A. Skandinaviska Enskilda Banken, Denmark EURO1 Sub-Participant Bank of Cyprus Public Company Ltd Crédit Mutuel – CIC Banques Société Générale EURO1 Participant Bank of Greece S.A. Crédit Mutuel Arkéa Crédit du Nord EURO1 Sub-Participant Bank of Ireland Credit Suisse (Schweiz) AG Sparekassen Sjælland STEP1 Bank Bank of Slovenia – Banka Slovenije Credito Emiliano SpA Standard Chartered Bank Germany Branch EURO1 Participant Bankia S.A. Danske Bank A/S Svenska Handelsbanken EURO1 Participant Bankinter S.A. Danske Bank A/S, Finland Branch Handelsbanken, Denmark EURO1 Sub-Participant Banque de France De Nederlandsche Bank N.V. Handelsbanken, Norway EURO1 Sub-Participant Banque de Luxembourg Deutsche Bank AG Swedbank AB (publ.) EURO1 Participant Banque Eni S.A. Deutsche Bundesbank Swedbank AB, Lithuania EURO1 Sub-Participant Banque et Caisse d’Epargne de l’Etat Deutsche Postbank AG Swedbank AS, Estonia EURO1 Sub-Participant Banque Internationale à Luxembourg S.A. DNB Bank ASA Swedbank AS, Latvia EURO1 Sub-Participant Barclays Bank Plc DNB Bank ASA, Filial Finland UBS AG (UK) EURO1 Participant Barclays Bank Plc – France DZ BANK AG UBS Europe SE, Germany EURO1 Sub-Participant Barclays Bank Plc – Portugal DZ Bank AG Düsseldorf UniCredit S.p.A. EURO1 Participant UniCredit Bank AG (Hypovereinsbank) EURO1 Sub-Participant UniCredit Bank Austria AG EURO1 Sub-Participant

104 Appendix 2 Wells Fargo Bank, N.A., London Branch EURO1 Participant 104 Appendix 3 eba clearing Annual Report 2017 90 eba clearing Annual Report 2017 91 Elavon Financial Services Limited Raiffeisen Landesbank Südtirol AG STEP2 SDD CORE BPCE ERSTE Group Bank AG Royal Bank of Scotland Plc BPER Banca S.p.A. First Investment Bank AD Santander Consumer Bank AG ABN AMRO Bank N.V. bpost SA de droit public Hellenic Bank Public Company Ltd Satabank Plc Aktia Bank Plc BRED Banque Populaire HSBC Bank Plc S-Bank Ltd. Allied Irish Banks, Plc Bunq B.V. HSBC France SECB Swiss Euro Clearing Bank GmbH Banca Carige S.p.A. Caixa Central de Crédito Agrícola Mútuo ICCREA Banca S.p.A. – Skandinaviska Enskilda Banken AB (publ) Banca d’Italia Caixa Geral de Depósitos S.A. Istituto Centrale del Credito Coop. Skandinaviska Enskilda Banken S.A., Banca Generali S.p.A. CaixaBank S.A. ING Bank NV Luxembourg Banca Monte dei Paschi di Siena S.p.A. Cassa Centrale Banca – ING Belgium NV/SA Société Générale Banca Popolare di Sondrio SCPA Credito Cooperativo del Nord Est S.p.A. ING Luxembourg S.A. Société Générale Bank and Trust S.A. Banco Bilbao Vizcaya Argentaria S.A. Cassa Depositi e Prestiti S.p.A. Intesa Sanpaolo S.p.A. Spar Nord Bank Banco BPI S.A. Cassa di Risparmio di Parma e Piacenza S.p.A. J.P. Morgan AG Sparekassen Kronjylland Banco BPM S.p.A. CECABANK S.A. Jyske Bank AS Sparkasse Bank Malta Plc Banco Comercial Português SA Central Bank of Savings Banks Finland Plc KBC Bank N.V. Standard Chartered Bank Germany Banch Banco de España Citibank Europe Plc Københavns Andelskasse Starling Bank Limited Banco de Sabadell S.A. Commerzbank AG La Banque Postale Svenska Handelsbanken AB Banco Popular Español S.A. Crédit Agricole S.A. Lån & Spar Bank A/S Swedbank AB (publ) Banco Santander S.A. Crédit Mutuel – CIC Banques Landesbank Baden-Württemberg Sydbank A/S Banco Santander Totta S.A. Crédit Mutuel Arkéa Landesbank Hessen-Thueringen (HELABA) UBS AG Bank of America, NA, Frankfurt Branch Credit Suisse (Schweiz) AG Latvijas Banka UBS Europe SE Bank of Greece S.A. Credito Emiliano S.p.A. Lietuvos Bankas – Bank of Lithuania UBS Switzerland AG Bank of Ireland Danske Bank A/S Lloyds Bank Plc UniCredit Bank AG (HypoVereinsbank) Bank of Slovenia – Banka Slovenije De Nederlandsche Bank N.V. MUFG Bank, Ltd UniCredit Bank Austria AG Bankia S.A. Deutsche Bank AG Narodowy Bank Polski – UniCredit S.p.A. Banque de France Deutsche Bundesbank National Bank of Poland Banque de Luxembourg Deutsche Postbank AG National Bank of Slovakia – Banque Eni S.A. DZ BANK AG Národná Banka Slovenska Banque et Caisse d’Epargne de l’Etat DZ Bank AG Düsseldorf National Westminster Bank Plc Banque Internationale à Luxembourg S.A. Elavon Financial Services Limited National Westminster Bank Plc, Barclays Bank Plc ERSTE Group Bank AG Netherlands Branch Barclays Bank Plc – France HSBC Bank Plc NEXI SpA Barclays Bank Plc – Portugal HSBC France Nordea Bank AB Finnish Branch Barclays Bank Plc – Spain ICCREA Banca S.p.A. – Novo Banco S.A. Barclays Bank UK Plc Istituto Centrale del Credito Coop. Oesterreichische Nationalbank Belfius Bank SA/NV ING Bank NV OP Corporate Bank Plc. BGL BNP Paribas ING Belgium NV/SA OTP Bank Plc. BNP Paribas – Dublin Branch ING Luxembourg S.A. Promsvyazbank PJSC, Cyprus Branch BNP Paribas Fortis SA/NV Intesa Sanpaolo S.p.A. Rabobank Nederland BNP Paribas S.A. J.P. Morgan AG Raiffeisen Bank International AG Bonum Bank Plc KBC Bank N.V. 104 Appendix 3 104 Appendix 3 eba clearing Annual Report 2017 92 eba clearing Annual Report 2017 93 La Banque Postale STEP2 SDD B2B BPCE La Banque Postale Landesbank Baden-Württemberg BPER Banca S.p.A. Landesbank Baden-Württemberg Landesbank Hessen-Thueringen (HELABA) ABN AMRO Bank N.V. bpost SA de droit public Landesbank Hessen-Thueringen (HELABA) Lietuvos Bankas – Bank of Lithuania Banca 5 S.p.A. BRED Banque Populaire Lloyds Bank Plc Lloyds Bank Plc Banca Carige S.p.A. Bunq B.V. MUFG Bank, Ltd MUFG Bank, Ltd Banca d’Italia Caixa Central de Crédito Agrícola Mútuo National Bank of Slovakia – National Bank of Slovakia – Banca Generali S.p.A. Caixa Geral de Depósitos S.A. Národná Banka Slovenska Národná Banka Slovenska Banca Monte dei Paschi di Siena S.p.A. CaixaBank S.A. National Westminster Bank Plc, National Westminster Bank Plc, Banca Popolare di Sondrio SCPA Cassa Centrale Banca – Netherlands Branch Netherlands Branch Banco Bilbao Vizcaya Argentaria S.A. Credito Cooperativo del Nord Est S.p.A NEXI SpA NEXI SpA Banco BPI S.A. Cassa Depositi e Prestiti S.p.A Nordea Bank AB Finnish branch Nordea Bank AB Finnish Branch Banco BPM S.p.A. Cassa di Risparmio di Parma e Piacenza S.p.A Novo Banco S.A. Novo Banco S.A. Banco Comercial Português SA CECABANK S.A. Oesterreichische Nationalbank Oesterreichische Nationalbank Banco de España Citibank Europe Plc Rabobank Nederland OP Corporate Bank Plc. Banco de Sabadell S.A. Commerzbank AG Raiffeisen Bank International AG Rabobank Nederland Banco Popular Español S.A. Crédit Agricole S.A. Raiffeisen Landesbank Südtirol AG Raiffeisen Bank International AG Banco Santander S.A. Crédit Mutuel – CIC Banques Santander Consumer Bank AG Raiffeisen Landesbank Südtirol AG Banco Santander Totta S.A. Crédit Mutuel Arkéa SECB Swiss Euro Clearing Bank GmbH Santander Consumer Bank AG Bank of America, NA, Frankfurt Branch Credit Suisse (Schweiz) AG Skandinaviska Enskilda Banken AB (publ) Satabank Plc Bank of Greece S.A. Credito Emiliano S.p.A Société Générale S-Bank Ltd. Bank of Slovenia – Banka Slovenije Danske Bank A/S Spar Nord Bank A/S SECB Swiss Euro Clearing Bank GmbH Bankia S.A. De Nederlandsche Bank N.V. Svenska Handelsbanken AB Skandinaviska Enskilda Banken AB (publ) Banque de France Deutsche Bank AG UBS Europe SE Société Générale Banque de Luxembourg Deutsche Bundesbank UniCredit Bank AG (HypoVereinsbank) Spar Nord Bank A/S Banque Eni S.A. Deutsche Postbank AG UniCredit Bank Austria AG Standard Chartered Bank Germany Branch Banque et Caisse d’Epargne de l’Etat DZ BANK AG UniCredit S.p.A. Starling Bank Limited Banque Internationale à Luxembourg S.A. ERSTE Group Bank AG Unione di Banche Italiane S.C.P.A. Svenska Handelsbanken AB Barclays Bank Plc HSBC France UBS Europe SE Barclays Bank Plc – France ICCREA Banca S.p.A. – UniCredit Bank AG (HypoVereinsbank) Barclays Bank Plc – Portugal Istituto Centrale del Credito Coop. UniCredit Bank Austria AG Barclays Bank Plc – Spain ING Bank NV UniCredit S.p.A. Barclays Bank UK Plc ING Belgium NV/SA Unione di Banche Italiane S.C.P.A. Belfius Bank SA/NV ING Luxembourg S.A. BGL BNP Paribas Intesa Sanpaolo S.p.A BNP Paribas Fortis SA/NV J.P. Morgan AG BNP Paribas S.A. KBC Bank N.V. 104 Appendix 3 104 Appendix 3 eba clearing Annual Report 2017 94 eba clearing Annual Report 2017 95 Appendix 4 Appendix 5 Appendix 6 List of Direct Participants in RT1 List of Direct Participants Annual Accounts for 2017 Status: 30 April 2018 in STEP2 CC Status: 30 April 2018

RT1 STEP2 CC The annual accounts for 2017 (and for 2016) ABN AMRO Bank N.V. Citibank Europe Plc are attached separately. AS SEB Pank Commerzbank AG Banca Patrimoni Sella & C. S.p.A. Deutsche Bank AG Banca Sella Holding S.p.A. Deutsche Postbank AG Banca Sella S.p.A. Landesbank Hessen-Thueringen (HELABA) Banco Bilbao Vizcaya Argentaria S.A. Santander Consumer Bank AG Banco Sabadell S.A. UniCredit Bank AG (HypoVereinsbank) Banco Santander S.A. Bankia S.A. Bunq B.V. Caixabank S.A. ERSTE Group Bank AG Intesa Sanpaolo S.p.A. Latvijas Banka Lietuvos bankas NEXI S.p.A. Raiffeisenbank International AG Raiffeisenlandesbank Oberoesterreich AG SATABANK Plc. UniCredit Bank AG (HypoVereinsbank) UniCredit S.p.A. 104 Appendices 4 & 5 104 Appendix 6 eba clearing Annual Report 2017 96 eba clearing Annual Report 2017 97 Imprint Caption credits

L’aéroport de Roissy-Charles-de-Gaulle © 2018 EBA CLEARING https://en.wikipedia.org/w/index.php?title=Charles_de_Gaulle_ All rights reserved Airport&oldid=840124952 (last visited 15 May 2018) Estación de Atocha https://de.wikipedia.org/w/index.php?title=Bahnhof_Madrid_ Atocha&oldid=171375777 and http://www.gomadrid.com/ Concept and text transport/atocha.html both (last visited 15 May 2018)

EBA CLEARING Haven van Rotterdam https://en.wikipedia.org/w/index.php?title=Port_of_ 40 rue de Courcelles Rotterdam&oldid=833040537 (last visited 15 May 2018)

F-75008 Paris Channel Tunnel / Le tunnel sous la Manche https://en.wikipedia.org/w/index.php?title=Channel_ Tunnel&oldid=839981855 (last visited 15 May 2018)

Graphic design Piazza Gae Aulenti https://www.introducingmilan.com/piazza-gae-aulenti and formfellows http://milanostyle.com/unicredit-pavilion/ (both last visited 15 May 2018) Kommunikations-Design Via Appia Frankfurt am Main https://en.wikipedia.org/w/index.php?title=Appian_ Way&oldid=838831948 (last visited 15 May 2018)

Jäänmurtaja Photographs https://finland.fi/business-innovation/finnish-icebreakers-clear- a-polar-path/ (last visited 15 May 2018) Johannes Haas Fotografie, Berliner Fernsehturm Rösrath https://en.wikipedia.org/w/index.php?title=Fernsehturm_ Berlin&oldid=840155413 (last visited 15 May 2018) iStock by Getty Images Seilbahnen in Österreich https://en.wikipedia.org/w/index.php?title=List_of_aerial_ tramways&oldid=838059785 (last visited 15 May 2018)

Reproductions Elétricos de Lisboa https://en.wikipedia.org/w/index.php?title=Trams_in_ ORT GmbH Lisbon&oldid=839747608 (last visited 15 May 2018)

Frankfurt am Main Pont du Gard https://en.wikipedia.org/w/index.php?title=Pont_du_ Gard&oldid=825327991 (last visited 15 May 2018)

Printing Le quartier européen de Bruxelles / De Europese buurt in Brussel https://en.wikipedia.org/w/index.php?title=Brussels_and_the_ Kuthal Print GmbH & Co. KG European_Union&oldid=829479074 (last visited 15 May 2018) Mainaschaff Dzelzceļa Tilts https://en.wikipedia.org/w/index.php?title=Railway_Bridge,_ Riga&oldid=832013470 (last visited 15 May 2018)

Contact Münchner U-Bahn https://en.wikipedia.org/w/index.php?title=Munich_ [email protected] U-Bahn&oldid=836540451 (last visited 15 May 2018)

Philharmonie Luxembourg https://www.visitluxembourg.com/en/place/concert/philharmonie- luxembourg and https://en.wikipedia.org/w/index. php?title=Philharmonie_Luxembourg&oldid=836123873 (both last visited 15 May 2018)

Trinity College https://en.wikipedia.org/w/index.php?title=Trinity_College_ Library&oldid=821266742 (last visited 15 May 2018) Pont du Gard

Pont du Gard is an ancient Roman aqueduct that crosses the Gardon River near the town of Vers-Pont-du-Gard in southern France. It is the highest of all elevated Roman aqueducts, and one of the best preserved. The aqueduct bridge is part of the Nîmes aqueduct, a 50-kilometre water system built in the first century AD.

0618/500 Le quartier européen de Dzelzceļa Tilts Bruxelles / De Europese Riga’s Railway Bridge buurt in Brussel crosses the Daugava river. The much-frequented rue It was inaugurated in de la Loi or Wetstraat in 1914 and is nowadays the Brussels leads into the only railway bridge in the European Quarter, where capital of Latvia. The bridge the European Commission, will be duplicated as part the European Council and of the new Rail Baltica line the European Parliament through Riga. are located.

Münchner U-Bahn

The Munich subway system is an electric rail rapid transit network. It began operation in 1971. The Munich subway system currently comprises eight lines, serving 96 stations and encompassing 103.1 kilo- metres of routes. The trains operate at speeds up to 80 km per hour, which is the top speed among German U-Bahns. Philharmonie Luxembourg Back cover Trinity College The Philharmonie Luxembourg is a concert hall located on The Library of Trinity College the Kirchberg plateau in the Dublin serves Trinity College city of Luxembourg. Every year and the University of Dublin. it is visited by more than It is the largest library in 150,000 music lovers. The Ireland and the permanent Philharmonie features a home to the famous Book of striking design: 823 slender Kells. The Long Room, the white pillars give the building main chamber of the Old and its elliptical foyer a Library shown in the picture, transparent envelope, within was built between 1712 and which visitors find three very 1732 and houses 200,000 different auditoria. of the Library’s oldest books.