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The Eurosystem supports the creation of the Single Euro Payments Area (SEPA), which will enable retail payments in euro to be made throughout the euro area under the same basic conditions from a single account, regardless of its location. Infrastructures play an important role in achieving the objectives of SEPA. Acting as a catalyst, the Eurosystem has therefore defined four criteria that infrastructures should fulfil in order to be considered SEPA-compliant in the view of the Eurosystem. Compliance with these requirements should be assessed by the infrastructure providers themselves. The criteria were published in the 5th Progress Report on SEPA and represent the Eurosystem’s long-term vision for the processing of payments, interoperability among infrastructures, sending and receiving capacity and choice for banks. The Eurosystem foresees that relevant infrastructures in the euro area will gradually develop towards compliance with all four criteria, but neither expects nor requires all infrastructures to do so.
Infrastructure providers that offer interbank funds transfer systems to banks and that intend to become SEPA-compliant in accordance with these criteria should publish self-assessments to demonstrate their compliance. The Eurosystem does not expect entities to undertake self-assessment if they offer this service in a limited scope only (i.e. an intra-bank and/or intra-group clearing and settlement arrangement, typically where both the originator/creditor and beneficiary/debtor have their accounts within the same bank or group), or if SEPA-compliance by infrastructures is not relevant (i.e. in the case of a form of purely bilateral non-structured clearing and settlement, such as correspondent banks) [2].
This document provides terms of reference, i.e. questions to be answered by infrastructure providers in their self-assessments. The terms of reference relate directly to the four criteria already published. To be SEPA-compliant according to these criteria, an infrastructure would need a positive answer (i.e. a ‘yes’) for all applicable numbered questions. As some infrastructures may not be SEPA-compliant in the short term, the subquestions are intended to bring transparency to the market during the migration phase.
To achieve the desired transparency, the Eurosystem expects major infrastructure providers aiming to meet the SEPA compliance criteria to conduct self-assessments on a regular basis and make them publicly available. The terms of reference in this document provide guidance for this purpose.
To promote the SEPA–compliance of infrastructures, infrastructures are asked to comply with the requirements of the PEACH/CSM Framework, the SCT Rulebook and/or the SDD Rulebook(s), the Implementation Guidelines and the associated UNIFI (ISO 20022) XML standards, and to be ready to support scheme testing as planned by the EPC.
To promote the SEPA–compliance of infrastructures, infrastructures are asked to adopt interoperability rules, i.e. interface specifications and business procedures for the exchange of SEPA credit transfers and SEPA direct debit payment orders between banks and infrastructures, and between infrastructures, that are preferably mutually agreed upon by the relevant CSMs, and undertake to establish a link with any other infrastructure upon request, based on the principle that the cost for establishing the link is borne by the requesting infrastructure.
To promote the SEPA–compliance of infrastructures, infrastructures are asked to be able to send or receive euro payments to and from all banks in the euro area, either directly or indirectly through intermediary banks, or through links between infrastructures (in other words, to provide full reachability)
To promote the SEPA–compliance of infrastructures, infrastructures are asked to enable financial institutions to make infrastructure choices based on service and price, and therefore not to apply undue access restrictions, nor to set obligations for users to process certain types of payment in a specific infrastructure, or via specific proprietary standards, nor to impose participation obligations on users of other infrastructures, and to ensure full transparency of services and pricing
[1] Infrastructure providers in this context are entities offering an interbank funds transfer system (IFTS). An IFTS is a formal arrangement based on private contract or law, with multiple membership, common rules and standardised arrangements, for the transmission, clearing, netting and/or settlement of monetary obligations arising between the members, in which all (or almost all) participants are credit institutions.
[2] These two categories of infrastructures correspond to CSM (Clearing and Settlement Mechanism) categories 4 and 5 in the European Payments Council’s (EPC) “Framework for the evolution of the clearing and settlement of payments in SEPA” (January 2007).