Marketing de afiliados OPM: Affiliate Marketing Management.
Frank Ravanelli projeta, lança, cresce e gerencia programas afiliados (além de outros projetos de marketing de desempenho e marketing de crescimento) em nome de seus clientes. Ele é um marketeer de performance, especializado em eCommerce, eGaming, Fintech, B2B Saas. Ele está na eMarketing desde 1995. Ele liderou os cassinos das principais empresas de eGaming e os programas de afiliados dos principais comerciantes de e-commerce dos EUA (Saas, imóveis, armazenamento em nuvem, etc.).
Seus serviços incluem:
& # 8211; planejamento de novos programas afiliados: análise, estratégias e táticas do setor.
& # 8211; (re) lançamento de programas afiliados: identificação de oportunidades para crescer e implementá-los.
& # 8211; gestão contínua do programa de afiliados: afiliação crescente, negociação de novas parcerias.
& # 8211; treinamento de gerentes afiliados.
& # 8211; marketing e negócios crescentes de eGaming.
& # 8211; compra de mídia, colocações de redes de CPA, etc.
Frank Ravanelli não é um consultor que fala sobre idéias abstratas, ele faz o trabalho e produz resultados.
Frank aguarda para ouvir de você e para expandir seus negócios. Se o seu foco é a World Wide eGaming ou a US eCommerce, a Frank é o seu parceiro de negócios ideal.
Notícias de Marketing de afiliados.
Conferências de marketing de afiliados: algumas das conferências / eventos de afiliados em que falei:
Artigos de Marketing de afiliados: Algo valioso para ler para se manter à frente da concorrência.
Entre em contato com Frank Ravanelli.
Frank Ravanelli é um marketeer de performance, especializado em eCommerce, eGaming, Fintech, B2B SaaS. Mais detalhes e uma visão geral de suas conquistas estão disponíveis no linkedin / in / frankravanelli. Ele está na eMarketing desde 1995, no marketing de afiliados desde 1999, e na eGaming desde 2002. Ele liderou os cassinos das principais empresas de eGaming e os programas de afiliados dos principais comerciantes de e-commerce dos EUA (Saas, imóveis, armazenamento em nuvem etc.) .
Frank aguarda para ouvir de você e para expandir seus negócios. Se o seu foco é a World Wide eGaming ou a US eCommerce, a Frank é o seu parceiro de negócios ideal.
Noticias & Eventos.
Arquivo de comunicados de imprensa integrais.
Alguns sites podem exigir registro ou assinatura para ler o artigo completo.
Aproveite a oportunidade de conhecer a equipe Integral nessas conferências e eventos.
Localização: Hotel Eden Roc Miami Beach, Miami Beach, FL.
A Integral é patrocinadora e expositora da TradeTechFX USA 2018. Venha nos visitar no stand # 6 para conhecer nossas ofertas para investidores institucionais. Se você quiser agendar uma reunião com antecedência, entre em contato conosco por e-mail.
Para mais informações sobre o show, acesse: tradetechfxus. wbresearch.
Local: Webinar com a FX Week, 15:00 PM GMT.
Com a corrida para cumprir com a MiFID II a menos de dois meses, a FX Week e a Integral examinam as vantagens das soluções baseadas em nuvem e quais opções ainda estão disponíveis antes de 3 de janeiro.
Localização: O Westin Chicago River North, Chicago, IL.
Visite-nos no estande número 2 da P & L Forex Network Chicago para saber mais sobre a OCX, a mais moderna bolsa FX OTC. Se você deseja agendar uma reunião com antecedência, entre em contato conosco por e-mail.
Para mais informações sobre a conferência, por favor visite: P & L Forex Network Chicago.
Localização: Centro de Convenções de Dublin, na Irlanda.
Visite-nos no estande 12 do ACI World Congress em Dublin para saber mais sobre o BankFX, a plataforma eFX mais abrangente e confiável do mundo. Se você quiser agendar uma reunião com antecedência, entre em contato conosco por e-mail.
Para mais informações sobre a conferência, por favor visite: acidublin2017.
Localização: Omni Parker House, Boston.
Uma presença regular nesta importante conferência de gestores de investimentos, não perca esta oportunidade de conhecer a Integral e aprender sobre as recentes inovações de produtos. Estamos ansiosos para conhecê-lo em Boston. Se você quiser agendar uma reunião com antecedência, entre em contato conosco por e-mail.
Para mais informações sobre o programa, acesse: fxinvestna / static / home.
Localização: Eden Roc Nobu Resort, Miami.
A Integral está patrocinando o Evento Pré-Conferência de Avaliação da Plataforma (Mesa Redonda no. 8), bem como a Conferência principal. Venha nos visitar no estande # 5 para conhecer nossas ofertas para investidores institucionais. Também estamos promovendo um bate-papo ao pé da lareira às 14:40 no dia 1 (Track A, "The Daily Side Juggling Act". Como os comerciantes estão otimizando a melhor execução e os desafios regulatórios em 2017? & # 8221; ). Se você quiser agendar uma reunião com antecedência, entre em contato conosco por e-mail.
Para mais informações sobre o show, acesse: tradetechfxus. wbresearch.
Localização: O Westin Chicago River North, Chicago.
Integral como regular neste evento marco estará presente com um estande no chão expo e contribuir para a discussão, participando de um painel. Fique ligado para mais informações. Se você quiser agendar uma reunião com antecedência, entre em contato conosco por e-mail.
Localização: Palais des Sports, Limassol, Chipre.
Mais uma vez este ano, a Integral tem um estande na iFX EXPO, uma das maiores feiras de varejo de FX deste ano. Visite-nos no estande 11 para saber mais sobre nossas inovações recentes em torno do MarginFX. Nossa equipe está ansiosa para uma conversa cara a cara com você. Se você quiser agendar uma reunião com antecedência, entre em contato conosco por e-mail.
Para mais informações sobre o show, por favor, vá para: ifxexpo.
Localização: Hotel St. Regis Moscou Nikolskaya, Moscou.
Mais uma vez este ano, Integral é um parceiro orgulhoso da ACI Rússia. Teremos um estande e compartilharemos nossas ideias, contribuindo para um painel de discussão no evento. Se você quiser agendar uma reunião com antecedência, entre em contato conosco por e-mail.
Localização: etc. venues, 155 Bishopsgate, Londres.
Visite nosso estande (# 7) nesta importante feira européia de FX e saiba mais sobre nossas inovações recentes. Estamos ansiosos para conhecê-lo lá. Se você quiser agendar uma reunião com antecedência, entre em contato conosco por e-mail.
Localização: O Langham Boston Hotel, Boston.
A regular nesta importante conferência de gestores de investimentos, Integral novamente terá um estande. Também participamos do painel às 11:10 sobre "Plataformas E-FX e capacidades de execução no contexto de crescentes demandas regulatórias e um mercado em mudança". Não perca esta oportunidade de conhecer nossa equipe e aprender sobre inovações recentes de produtos. Estamos ansiosos para conhecê-lo em Boston. Se você quiser agendar uma reunião com antecedência, entre em contato conosco por e-mail.
Para mais informações sobre o show, acesse: fxinvestna /
Localização: Sofitel Sydney Wentworth Hotel, Sydney.
Integral terá um estande neste importante encontro de profissionais de FX em Sydney, na Austrália. Não perca esta oportunidade de conhecer nossa equipe e aprender sobre inovações recentes de produtos. Estamos ansiosos para conhecê-lo em Sydney. Se você quiser agendar uma reunião com antecedência, entre em contato conosco por e-mail.
Para mais informações sobre o show, acesse: FXWeekAustralia /
Localização: NH Grand Hotel Krasnapolsky, Amsterdã.
Como todos os anos, somos um dos pilares do show FX Invest Europe da FX Week, que acontece em Amsterdã pela primeira vez. Nós teremos um estande na área da Expo e estamos participando da discussão do painel do meio-dia sobre como manter o ritmo com as últimas tendências em negociação e execução de e-FX. Esperamos ver você lá. Não perca este importante espectáculo monetário na Europa Continental, pois existem poucos e distantes entre si. Se você quiser agendar uma reunião com antecedência, entre em contato conosco por e-mail.
Para mais informações sobre o programa, acesse: FXInvestEurope.
Localização: Eden Roc Hotel, Miami.
A Integral está voltando à TradeTechFX novamente este ano com um estande (# 6) para promover nossas ofertas para investidores institucionais. Aproveite a oportunidade de parar, conhecer a equipe e aprender sobre nossas inovações de produtos recentes. Também estamos realizando um bate-papo à lareira às 15h05 do primeiro dia (Canal A) sobre formas modernas de negociar moedas. Não perca isso. Se você quiser agendar uma reunião com antecedência, entre em contato conosco por e-mail.
Para mais informações sobre o show, acesse: TradeTechFXUS.
Localização: Centro de Convenções e Exposições de Hong Kong, Hong Kong.
A iFX Expo, como todos os anos, reúne bancos e corretores pan-asiáticos e outros participantes do mercado de câmbio em Hong Kong. Integral continua uma tradição de vários anos, tendo um estande no chão da exposição. Olhe para nós no estande # 73. Visite nosso site para conversar com a equipe e aprender sobre nossas mais recentes inovações em produtos e como elas podem ajudá-lo a expandir seus negócios de FX. Se você quiser agendar uma reunião com antecedência, entre em contato conosco por e-mail.
#LHCOIN É UMA CAPACIDADE DE UTILIDADE PARA NEGOCIAÇÃO DE MARGENS.
EM MERCADOS FOREX, CFD E CRYPTO *
#LHCoin será usado como requisito de margem para negociação em Forex, CFDs e mercados de criptografia. Além disso, ele será usado como comissão do agente para parceiros LH-Crypto.
Limite atual de US $ 10,81 milhões.
Você pode lembrar que nossa empresa distribuirá tokens de bônus entre os investidores do projeto se a campanha da OIC for bem-sucedida: 500.000 fichas após a OIC e 500.000 a mais um ano depois se o valor arrecadado for inferior a US $ 10.000.000 e 1.000.000 fichas após a OIC com outro 1.000.000 se a campanha trouxer mais de US $ 10.000.000.
Estamos combinando os saldos de recompensa e os tokens padrão do projeto. Para transferir tokens LHCoin_b para LHCoin, você precisa fazer o login em sua carteira e executar o procedimento de conversão. Você pode realizar este procedimento após o recebimento de moedas em sua carteira e se você tiver ETH em seu saldo para pagar a transação. O procedimento é extremamente simples e não vai demorar muito tempo.
Temos o prazer de informar que o bônus antecipado está disponível para retirada. Agora você pode visitar sua Área Pessoal em nosso site, a seção Bônus de Reserva Antecipada, e ativar o botão Retirada. De acordo com o parágrafo 3.2 de nossos "Termos e Condições", todos os Bônus Antecipados serão instantaneamente convertidos para tokens LHCoin com a melhor taxa de câmbio da nossa OIC: 1 LHCoin = 0,1287 USD. Por favor, converta seus bônus em tokens até o dia 15 de fevereiro. Todos os bônus, incluindo bônus antecipado, bônus de bónus e brindes serão enviados para as carteiras dos investidores até 25 de fevereiro.
A LHCoin está representada nas bolsas de valores ETHERDELTA e YOBIT e, num futuro próximo, o número de bolsas será aumentado. Também vamos realizar um procedimento KYC (conhecer o seu cliente) para entrar em tal troca como POLONIEX e BITTREX. O site do corretor de criptografia será lançado em abril e, em junho, planejamos implantar nossos próprios nós e organizar o processamento em tempo real para as principais moedas criptografadas nas contas do LH-CRYPTO. Em julho - agosto, começaremos a aceitar fundos de clientes para negociação de margem e ativar o programa CASHBACK.
LH-Crypto adiciona "tempo extra" para comprar os tokens do projeto! No dia 31 de janeiro completamos o POST ICO do projeto, mas quase imediatamente recebemos centenas de pedidos para estender a venda pelo menos por um dia, por isso a empresa decidiu atender aos desejos dos investidores e estender o POST ICO para outro 72 horas
Já temos um modelo de negócios em funcionamento. Além disso, tem uma longa história e temos uma grande base de clientes. A Larson & Holz não é apenas um site, é uma empresa real. Estamos no mercado desde 2004, temos um grande número de escritórios e parceiros em diferentes países da Ásia, Europa e América Latina. Mais de cem profissionais de primeira linha, fluentes em 10 idiomas, são empregados pela Companhia. Precisamos apenas ajustar o atual modelo de negócios eficiente e a campanha de marketing ao ambiente criptográfico.
O cliente de uma empresa pode ser qualquer indivíduo com um depósito de 10 USD. Graças a essas condições democráticas, a empresa tem em sua base várias centenas de milhares de contas de comerciantes de todo o mundo - Ásia, África, América Latina, Europa e Rússia.
Votando cidadãos, pax.
Capacidade prospectiva, pax.
Número de indivíduos envolvidos conforme as solicitações de pesquisa do Google, por exemplo, pax.
Clientes perspectiva com a alta atividade, pax.
Capacidade de expansão do banco de dados do cliente.
Votando cidadãos, pax.
Capacidade prospectiva, pax.
Número de indivíduos envolvidos conforme as solicitações de pesquisa do Google, por exemplo, pax.
Clientes perspectiva com a alta atividade, pax.
Capacidade de expansão do banco de dados do cliente.
Votando cidadãos, pax.
Capacidade prospectiva, pax.
Número de indivíduos envolvidos conforme as solicitações de pesquisa do Google, por exemplo, pax.
Clientes perspectiva com a alta atividade, pax.
Capacidade de expansão do banco de dados do cliente.
Votando cidadãos, pax.
Capacidade prospectiva, pax.
Número de indivíduos envolvidos conforme as solicitações de pesquisa do Google, por exemplo, pax.
Clientes perspectiva com a alta atividade, pax.
Capacidade de expansão do banco de dados do cliente.
Votando cidadãos, pax.
Capacidade prospectiva, pax.
Número de indivíduos envolvidos conforme as solicitações de pesquisa do Google, por exemplo, pax.
Clientes perspectiva com a alta atividade, pax.
Capacidade de expansão do banco de dados do cliente.
Votando cidadãos, pax.
Capacidade prospectiva, pax.
Número de indivíduos envolvidos conforme as solicitações de pesquisa do Google, por exemplo, pax.
Clientes perspectiva com a alta atividade, pax.
Capacidade de expansão do banco de dados do cliente.
06 de janeiro - por 5%, 11 de janeiro - por 7%, 16 de janeiro - 8%, 21 de janeiro - 10%, 26 de janeiro - por 20%.
Toda a marcação de token será distribuída entre os investidores anteriores do POST ICO. Isso significa que, por exemplo, a marcação de 11 a 16 de janeiro será destinada àqueles que investiram entre os dias 6 e 11 de janeiro. A venda será suspensa em 31 de janeiro e os tokens #LHC só estarão disponíveis nas trocas.
Observe que o valor do CASHBACK não depende do lucro do corretor: é o total de todos os pagamentos dos clientes em suas contas de negociação. São dezenas de milhões de dólares, e a quantidade crescerá à medida que o número de traders de criptografia aumentar. Esses pagamentos são totalmente automatizados e garantidos pelo próprio contrato inteligente.
As garantias de rendimento mínimo do token são fornecidas da seguinte forma: Para cada investidor da ICO, o corretor Larson & Holz abre uma conta pessoal e registra uma conta de negociação real no programa Metatrader, o mesmo que para o cliente de qualquer outra corretora. Essa conta pode ser usada como uma conta de negociação normal, ou seja, reabastecer, retirar fundos ou realizar operações de negociação.
Mas o objetivo principal desta conta para o investidor é um reflexo do valor dos Tokens comprados e do movimento dos fundos associados ao Token # LHCoin. Se em 1 ano após o início do leilão de Token # LHCoin na bolsa seu valor for menor que o valor nominal + 20%, o corretor cobrará o valor faltante na conta pessoal do investidor como um valor de bônus de acordo com o padrão do corretor. procedimentos.
Você pode alterar esse valor para qualquer outro ativo da lista do corretor, negociá-lo ou retirá-lo da conta, de acordo com as regras padrão do corretor. Este mecanismo para manter o valor de troca do nosso Token é chamado de "Sistema de Seguro de Taxa de Token".
$ 0,05 LH-Crypto Broker é compensado pelos investidores.
Como ganhar convidando novos investidores para a OIC?
Você pode ganhar simplesmente recomendando nossa empresa. Pagamos 3% do valor arrecadado na ETH. Ou pagamos em fichas de recompensa (# LHCoin_b) na proporção de 1 a 10. Ou seja, se o investidor que você atraiu comprou de nós 100 fichas #LHCoin, você transferirá 10 bênçãos de fichas # LHCoin_b.
Você escolhe como deseja receber recompensas. Sob a forma de dinheiro (ETH) ou na forma de fichas # LHCoin_b.
Para participar do programa de indicação, você precisa se registrar em nosso site. Após o registro, você receberá um código exclusivo de seis dígitos. Você pode atrair investidores para o nosso projeto através da Internet, distribuindo informações sobre a nossa empresa e colocando um link para o nosso site no formulário lh-crypto. io/Your_Code. Por exemplo, se seu código é 123456, você precisa colocar o link lh-crypto. io/123456.
Quando alguém o cruza em nosso site, o computador dessa pessoa será marcado com um código especial, o chamado cookie (tecnologia de cookies). Além disso, quando essa pessoa, ou seja, sua indicação, comprar nossos Tokens, você receberá uma recompensa por ela e a verá em sua Área Pessoal.
(de 30/10/17 a 12/02/17).
Semana 2 (12/11/2017 - 17/12/2017)
Semana 3 (18/12/2017 - 24/12/2017)
Semana 4 (25/12/2017 - 31/12/2017)
De acordo com este programa de bônus, o preço simbólico aumentará 5 vezes:
6 de janeiro - em 5%
11 de janeiro - por 7%
16 de janeiro - por 8%
21 de janeiro - em 10%
26 de janeiro - em 20%
1.2 Pagamentos de bônus de alta gerência - 1%
1.3 Recrutar “Team Leaders” para tarefas urgentes - não está programado neste plano.
2.2 Bônus para funcionários - 3%
2.3 Despesas de treinamento e re-treinamento - 100ETH.
2.4 O recrutamento de funcionários que falam idiomas raros para o suporte ao cliente - não está programado neste plano.
2.5 Expandindo o departamento de vendas, recrutando funcionários locais em diferentes regiões - 1%
3.2 Abertura de novos escritórios de representação - não está programado neste plano.
4.2 Estender a licença atual do Metaquotes para o Metatrader - não está programado neste plano.
4.3 Expansão do parque de servidores de negociação e criação de estações extras de backup - 100 ETH.
4.4 Integração nos maiores mercados de câmbio criptográfico - 1 mercado de câmbio (-s)
5.2 Para as atividades operacionais da empresa - 2%
6.2 A aquisição de licenças nos países de mercados de criptografia regulados (Japão, etc.) - não está programada neste plano.
1.2 Pagamentos de bônus de alta gerência - 1%
1.3 Recrutar “Team Leaders” para tarefas urgentes - não está programado neste plano.
2.2 Bônus para funcionários - 4%
2.3 Despesas de treinamento e re-treinamento - 100ETH.
2.4 O recrutamento de funcionários que falam idiomas raros para o suporte ao cliente - não está programado neste plano.
2.5 Expandindo o departamento de vendas, recrutando funcionários locais em diferentes regiões - 2%
3.2 Abertura de novos escritórios de representação - 3.
4.2 Estendendo a atual licença do Metaquotes para o Metatrader - 300 ETH.
4.3 Expansão dos servidores de negociação estacionados e criação de estações extras de backup - 200 ETH.
4.4 Integração nos maiores mercados de câmbio criptográfico - 3 mercado de câmbio (-s)
5.2 Para as atividades operacionais da empresa - 2%
6.2 A aquisição de licenças nos países de mercados de criptografia regulados (Japão, etc.) - não está programada neste plano.
1.2 Pagamentos de bônus de alta gerência - 1%
1.3 Recrutando “Líderes de Equipe” para tarefas urgentes - 2%
2.2 Bônus para funcionários - 5%
2.3 Despesas de treinamento e re-treinamento - 100ETH.
2.4 Recrutando funcionários que falam línguas raras para o suporte ao cliente - 1%
2.5 Expandir o departamento de vendas, recrutando funcionários locais em diferentes regiões - 3%
3.2 Abertura de novos escritórios de representação - 5.
4.2 Estendendo a atual licença do Metaquotes para o Metatrader - 900 ETH.
4.3 Expansão do parque de servidores de negociação e criação de estações extras de backup - 500 ETH.
4.4 Integrando nos maiores mercados de troca de criptografia - 5.
5.2 Para as atividades operacionais da empresa - 2%
6.2 Adquirir licenças nos países de mercados de criptografia regulamentados (Japão, etc.) - Aplicativo de licenciamento.
1.2 Pagamentos de bônus de alta gerência - 1%
1.3 Recrutando “Líderes de Equipe” para tarefas urgentes - 2%
2.2 Bônus para funcionários - 6%
2.3 Despesas de treinamento e re-treinamento - 100ETH.
2.4 Recrutando funcionários que falam línguas raras para o suporte ao cliente - 2%
2.5 Expandindo o departamento de vendas, recrutando funcionários locais em diferentes regiões - 4%
3.2 Abertura de novos escritórios de representação - 10.
4.2 Estendendo a atual licença do Metaquotes para o Metatrader - 1200 ETH.
4.3 Expansão do parque de servidores de negociação e criação de estações extras de backup - 1000 ETH.
4.4 Integração nos maiores mercados de câmbio criptográfico - 5 mercado de câmbio (-s)
5.2 Para as atividades operacionais da empresa - 2%
6.2 Adquirir licenças nos países de mercados de criptografia regulamentados (Japão, etc.) - Aplicativo de licenciamento.
1. Início de vendas 2. O preço de mercado de token #LHCoin é calculado.
1. O capital inicial é levantado para iniciar o projeto 2. O objetivo ideal é 10 milhões de USD.
1. Determinação do resultado financeiro 2. Preparativos do processo de trabalho 3. Venda de tokens à esquerda.
1. Organização de transferências automatizadas em criptografia de e para as contas do corretor. 2. Adaptação e configuração do software de corretagem para criptomoedas. 3. Reciclagem do pessoal da empresa. 4. Fazer um acordo com os mercados de ações para incluir #LHCoin.
1. Aceitar pagamentos de clientes em criptografia. Ativando o sistema de dividendos mensais de acordo com o CASHBACK 2. Detectando e corrigindo bugs nas operações do corretor de criptografia 3. Lançamento da campanha de marketing.
1. Aceitar pagamentos de clientes em criptografia. Ativando o sistema de dividendos mensais de acordo com o CASHBACK 2. Detectando e corrigindo bugs nas operações do corretor de criptografia 3. Lançamento da campanha de marketing.
1. O preço de mercado da #LHCoin dobra seu tamanho 2. A base da clientela dobra 3. Os escritórios de vendas adicionais são abertos.
1. Incluindo tokens de alta liquidez de outras empresas na lista de instrumentos em termos de “margem de negociação” 2. Preparando-se para aceitar tokens #LHCoin como um meio de pagamento e uma moeda de depósitos de traders.
1. Aceitar tokens #LHCoin como meio de pagamento 2. Ativar o sistema de seguro de taxa simbólica #LHCoin.
Joseph Steinberg Consultor Principal.
Pavel Salas WhitePaper Auditor.
John Larson Key Investor e Fundador.
Georgy Pavloff, diretor de operações.
Alexandr Smirnoff Diretor executivo de auditoria.
Nikita Baishev Diretora de Inovação.
Romany Sedhom Blockchain integrador.
Alena Narinyani Diretora de marketing.
Thabo Pereko ICO marketing e promoção.
Catherine Elizabeth Smit Chefe do Departamento de Suporte.
Valeriy Tatishvili, Diretora Técnica da OIC.
Ekaterina Novak Relações Públicas.
Marina Shuiskaya Chefe do Departamento Jurídico.
Chiu, Yun-Fang Publicidade e PR / Divisão Asiática.
Chen, Departamento de Suporte de Chao-Han / Divisão Asiática.
Vycheslav Prockonin Programação inteligente de contratos.
Antonis Lapos Mesa de Negociação.
Anatol Slissenko Phd da Paris Est University. Modelo matemático da OIC.
Andrei Dirgin Financial Expert.
Vladimir Kuzovlev Consultor financeiro e palestrante da RBC TV.
Oleg Dmitriev Consultor financeiro e palestrante da RBC TV.
Yan Art Vice-Presidente da Associação dos Bancos Russos.
Miklushevsky Andrey Especialista em Forex.
Para enviar um ticket, você precisa indicar seu endereço de e-mail e o número da conta da carteira ethereum usada para comprar tokens #LHCoin.
6 / F Yen Sheng Center.
64 Hoi Yuen Road.
Kwun Tong, Hong Kong.
Exposição Internacional de Investimento e Finanças / Guangzhou, China /
Conferência de Engenharia de Software (Rússia) / SECR 2017 /
Conferência «RUSSIA BLOCKCHAIN WEEK 2017».
ICO. INTRO / Moscou, Rússia /
Finance Magnates / London Summit 14-15th /
Hackathon Blockchain #BZRTC #Universa / Sochi, Rússia /
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Os lobos de Tel Aviv: o extenso golpe de opções binárias amorais de Israel exposto.
Uma indústria que gera centenas de milhões de dólares, empregando milhares de pessoas, está trapaceando cinicamente ingênuos potenciais investidores em todo o mundo através de uma série de práticas corruptas. Está causando danos terríveis a suas vítimas e corre o risco de fazer o mesmo com a reputação de Israel.
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Simona Weinglass é uma repórter investigativa do The Times of Israel.
Quando Dan Guralnek imigrou da Austrália para Israel em 2012, ele não previu se envolver em um esquema internacional de internet.
"Eu sempre quis mudar para Israel", diz Guralnek, que frequentou uma escola judaica em Sydney.
Ele estava trabalhando na administração de uma fábrica na Austrália quando seu chefe morreu repentinamente e, aos 28 anos, ele percebeu que era um bom momento para ele se mudar para Israel. "Eu pensei: 'eu sou livre, sem compromisso, eu posso ir'"
Guralnek se matriculou no Ulpan Etzion de Jerusalém para aprender hebraico, depois mudou-se para a vibrante e movimentada cidade de Tel Aviv, onde conseguiu uma série de empregos de salário mínimo para NIS 25 (pouco mais de $ 6) por hora: cortar legumes em um restaurante, dirigindo uma pessoa com deficiência, trabalhando no turno da noite em uma barraca de cachorro-quente.
Mas em uma cidade com aluguéis altíssimos e um custo de vida em relação aos salários (PDF) perdendo apenas para o Japão, Guralnek não poderia sobreviver. Ele ouviu que empregos em uma indústria chamada opções binárias pagavam o dobro do que ele estava ganhando, mais comissão.
& # 8216; & nbsp; jogos de azar e nós somos um bookie & # 8217; & # 8212; ex-vendedor de opções binárias.
“Assim que comecei a procurar emprego, recebia ligações de empresas de opções binárias todos os dias”, lembra ele. "Eles dominam o espaço de anúncio de emprego."
Nem Guralnek teve qualquer dificuldade em conseguir um emprego.
“Você entra e eles fazem um grande show como se estivessem avaliando se querem ou não você. Mas eles querem você.
No dia em que Guralnek entrou nos luxuosos escritórios de seu novo empregador na cidade litorânea de Herzliya Pituah, ele sabia que havia chegado.
"Havia café grátis, comida de graça", diz Guralnek. “Meu salário era de 7.500 shekels (US $ 1.900) por mês, mais comissão.”
Guralnek estava em um call center com cerca de 50 outros funcionários, muitos dos quais eram novos imigrantes fluentes em vários idiomas. Seu trabalho era chamar as pessoas ao redor do mundo e persuadi-las a "investir". em um produto financeiro ostensivo chamado "opções binárias". Os clientes seriam encorajados a fazer um depósito & # 8212; para enviar dinheiro para sua empresa & # 8212; e depois usar esse dinheiro para fazer os "negócios": os clientes tentariam avaliar se uma moeda ou commodity subiria ou cairia nos mercados internacionais dentro de um certo período de tempo curto. Se eles previram corretamente, eles ganharam dinheiro, entre 30 e 80 por cento da soma que tinham colocado. Se eles estivessem errados, eles perderam todo o dinheiro que eles puseram no negócio. & # 8221; Guralnek logo percebeu que, quanto mais negociações um cliente fazia, mais perto ficava de perder todo o depósito inicial.
Ele havia sido instruído a apresentar a opção binária como um "investimento" e a si mesmo como um "corretor", embora soubesse que eles provavelmente perderiam todo o seu dinheiro. “O cliente não está realmente comprando nada. O que ele está comprando é uma promessa da nossa empresa que vamos pagar a ele. É o jogo e nós somos um bookie, ”ele diz agora.
Antes de iniciar o trabalho, a empresa deu a Guralnek um curso de vendas de uma semana, no qual aprendeu suficiente conhecimento financeiro para soar bem a um cliente que sabia menos que ele. Ele também foi instruído em táticas de vendas de alta pressão.
"Eles nos ensinaram como deixar as pessoas desconfortáveis, como responder a objeções, como mantê-las ao telefone."
A sessão de treinamento era conhecida como "curso de conversão" e o objetivo era aprender como transformar um lead telefônico em um cliente, fazendo o primeiro depósito. Em sua empresa, os vendedores não podiam fazer um depósito de menos de US $ 250.
Durante o curso de vendas, a gerência da empresa deu conselhos a Guralnek que o assombraram mais tarde. "Eles nos disseram para deixar nossa consciência na porta."
Isso é legal?
À medida que as semanas se passaram, mais e mais perguntas se formaram na mente de Guralnek & # 8212; perguntas que sublinhavam o bizarro submundo financeiro em que ele havia entrado. Por que ele não conhecia os sobrenomes de seus gerentes? Por que os trabalhadores eram proibidos de falar hebraico ou trazer celulares para o call center? Quem foi o CEO da empresa? Por que estava tudo bem para a equipe árabe-israelense da empresa vender opções binárias em lugares como a Arábia Saudita, enquanto outros países, como Israel, Estados Unidos e Irã, estavam fora dos limites?
Ainda pior, Guralnek começou a suspeitar que, além das probabilidades pobres que os clientes tinham de ganhar dinheiro, e além das táticas de vendas agressivas, o que a empresa estava fazendo era absolutamente ilegal.
Por exemplo, cada vendedor foi convidado a inventar um nome e uma biografia falsos. O call center usava a tecnologia de Voz sobre Protocolo de Internet (VoIP), que exibia um número de telefone local para clientes em qualquer lugar do mundo. O site da empresa listou um endereço em Chipre.
“Disseram-me para dizer às pessoas que eu tinha anos de experiência no mercado, que havia estudado em Oxford e trabalhado para o Bank of Scotland.”
Guralnek diz que lhe disseram para se apresentar como um corretor que fez uma comissão sobre os negócios e para enfatizar quanto dinheiro o cliente poderia ganhar enquanto subestimava o risco. De fato, em vez de ajudar os clientes a fazer transações inteligentes, os "corretores" O verdadeiro interesse era que eles fizessem previsões mal sucedidas e perdessem seu dinheiro.
Guralnek diz que também ficou cada vez mais inquieto com o que aconteceu quando os clientes tentaram sair. É quando eles seriam solicitados por muita papelada.
"Nós diríamos:" Você quer se retirar? ESTÁ BEM. Precisamos confirmar sua identidade antes de liberarmos os fundos. Você precisa nos enviar uma fotocópia da sua conta de luz, sua carteira de habilitação, seu passaporte, seu cartão de crédito ”” & # 8212; requisitos, escusado será dizer, que não tinha sido mencionado quando o cliente colocar dinheiro dentro
Enquanto o cliente estava reunindo e enviando esta documentação, um agente de “retenção” os chamaria e passaria por seus negócios, supostamente descobrindo o que deu errado e convencendo-os a continuar negociando. "Nós poderíamos atrasar essa retirada por um longo tempo."
& # 8216; Por que eu deveria ser culpado por vender algo para pessoas estúpidas? Se alguém tem mais de 18 anos e quer álcool, cigarros, uma faca, uma conta de opção binária, é sua própria responsabilidade & # 8217; & # 8212; Postagem no Facebook.
Se um cliente era persistente, diz Guralnek, muitas vezes a empresa parava de atender suas chamadas, ou enviava um e-mail dizendo "suspeitamos de fraude" e congelamos todos os seus fundos. Como o cliente não sabia o nome real ou a localização do vendedor, "eles não tinham onde recorrer para recuperar o dinheiro", explica Guralnek.
Mas a parte mais sombria do trabalho do jovem imigrante era pedir dinheiro a pessoas que pareciam pobres e desalentadas.
“Eles acreditam que estão fazendo algo bom: estão fazendo um investimento, fazendo algo responsável. E eles não são. Toda história é triste. Todos têm pessoas dependendo deles. Muitas pessoas estão finalmente se recuperando depois de um problema de drogas ou algo assim.
O pior foi quando um cliente lhe disse: "Estou no hospital".
“Quando alguém diz 'eu estou no hospital e tenho câncer', nós ainda devemos vendê-los. Mas eu jogaria a venda toda vez. Eu não pude fazer isso.
Uma indústria vasta e desonrosa.
Se você digitar as palavras "opções binárias" ou "forex" em grupos do Facebook que atendem a novos olim (imigrantes para Israel), você encontrará longas filas de trocas aquecidas.
"Algum de vocês que está envolvido em opções Forex / Binary percebe que este é um negócio altamente desregulamentado que está solicitando jogos de azar para pessoas mal informadas ou sem educação?", Diz um desses posts no popular grupo Secret Tel Aviv.
"Por que eu deveria ser culpado por vender algo para pessoas estúpidas?", Responde uma mulher. "Se alguém tem mais de 18 anos e quer álcool, cigarros, uma faca, uma conta de opção binária, é sua própria responsabilidade."
“Você venderia para sua avó?”, O pôster original dispara de volta.
No grupo “Keep Olim in Israel Movement” do Facebook, uma mulher escreve: “Oi pessoal, alguém pode me explicar o que são empregos binários e Forex e por que as pessoas são tão anti-trabalhistas nessas indústrias em Israel?”
"Este campo é desonroso", diz uma resposta. “Eu fiz isso e não senti nada além de vergonha e auto-aversão por assediar as pessoas que nunca pediram por essa ligação e tentaram tirar dinheiro delas que é improvável que elas voltem”.
"Se você não gosta, não faça", diz outro. “Trabalhe o que você acha que é um trabalho 'honesto', faça seus 6.000 shekels (aproximadamente 1.500 dólares) por mês, gaste metade do aluguel e viva como um roedor com o resto.” Ele continua: “Enquanto o Binário e A indústria Forex e eu pagamos 50% de impostos sobre nossos salários para pagar seus cuidados de saúde, segurança social e segurança, eu posso falar por todos nós, não precisamos ser julgados. ”
Ninguém parece saber exatamente quão grandes são as opções binárias e as indústrias forex em Israel. Nem mesmo a Autoridade de Valores Mobiliários de Israel, que, quando fez a pergunta, respondeu por mensagem de texto: "Como a indústria ainda não está regulamentada, não temos a visão completa".
Mas estimativas conservadoras colocam o número de pessoas empregadas na indústria em vários milhares, principalmente em Tel Aviv e nos seus subúrbios, como Herzliya e Ramat Gan, enquanto a receita anual pode estar entre centenas de milhões e mais de um bilhão de dólares.
Globalmente, o termo forex normalmente se refere ao comércio legítimo em moeda estrangeira, enquanto as opções binárias são o nome de um instrumento financeiro. No jargão popular israelense, entretanto, “opções binárias” e “forex” são muitas vezes agrupadas como parte da mesma indústria: quando os israelenses se referem a empresas forex, elas geralmente significam empresas que “negociam”; as opções binárias em moedas. Às vezes, os termos Forex e opções binárias são usados de forma intercambiável para se referir a transações rápidas, com tudo ou nada, em uma série de ativos.
Em algumas empresas de opções binárias, a plataforma on-line é manipulada para fornecer resultados falsos que garantem a perda do cliente.
O & # 8220; comércio & # 8221; processo pode funcionar da seguinte forma, The Times of Israel foi dito. Tendo transferido seu primeiro depósito financeiro para a empresa, os clientes entram em uma plataforma de negociação on-line, conforme indicado pelos vendedores da empresa, e colocam dinheiro em uma previsão de que o preço de uma moeda ou mercadoria vai subir ou descer na mercados internacionais em, digamos, os próximos cinco minutos. Se o cliente prevê corretamente, ele lucra com certa porcentagem e a empresa perde dinheiro. Se o cliente estiver errado, ele perde todo o dinheiro que colocou no negócio e a empresa o mantém. Os negociadores de opções profissionais consultados pelo The Times of Israel disseram que mesmo um gênio financeiro não pode prever com confiança o que, digamos, o preço do ouro fará nos próximos cinco minutos; em vez de um investimento, a transação não é mais do que uma aposta.
A deturpação do jogo como investimento responsável seria bastante ruim.
O que é pior, no entanto, e flagrantemente corrupto, o Times of Israel foi dito, é que, em algumas empresas, a casa é dobrada. Uma variedade de artifícios são usados. O potencial pagamento para uma previsão correta é complexo, opaco e calculado para minimizar a perda da empresa. Se um ativo estiver se comportando de maneira previsível, & # 8212; digamos, o preço do cobre começa a subir após um terremoto no Chile & # 8212; a empresa extrairá esse ativo da plataforma on-line. Em algumas empresas de opções binárias, a plataforma on-line é manipulada para fornecer resultados falsos que garantem a perda do cliente.
As estimativas do número de opções binárias e empresas forex em Israel variam de 20 a várias centenas. O IVC Research Center, uma empresa que fornece informações sobre o setor de tecnologia de Israel, estimou em seu anuário de 2015 que existem 100 empresas de comércio on-line em Israel, a esmagadora maioria das quais se enquadra nas categorias de opções forex e binárias. O IVC estima que essas empresas empreguem mais de 2.800 pessoas em Israel. No entanto, o anuário afirma que "é difícil avaliar o tamanho real da indústria de negociação financeira on-line em Israel", em parte porque a indústria é "discreta" e seu "nexo israelense é frequentemente subestimado".
Um relatório de 2014 sobre a indústria de Internet israelense pela incubadora de startups TheTime diz que das 90 empresas de Internet israelenses que ganham receita de US $ 10 milhões ou mais por ano, 15 eram plataformas de negociação online, muitas delas negociando opções binárias e forex. Três destes, de acordo com o relatório, foram avaliados para ter uma receita de pelo menos US $ 100 milhões por ano. Algumas outras empresas da lista incluíam iForex, bForex, AnyOption, 4XPlace, Optionbit e Banc de Binary. Com base nessas avaliações, a indústria israelense de forex e de opções binárias tem um faturamento anual de centenas de milhões, possivelmente bilhões de dólares.
Quantos são fraudulentos?
Não se sabe qual é a porcentagem de empresas de trading financeiro on-line que se envolvem em práticas antiéticas, ilegais e / ou fraudulentas. Uma distinção que muitas pessoas entrevistaram para este artigo foi entre empresas não reguladas e reguladas.
Várias empresas grandes e mais conhecidas, com fundadores israelenses ou grandes operações de vendas e marketing em Israel, são regulamentadas em Chipre, o que lhes dá licença para vender produtos financeiros em países individuais da UE, mesmo que eles não sejam regulamentados nesses países.
Muitas empresas de opções binárias e forex que operam em Israel, no entanto, não são regulamentadas.
Sam C., um imigrante recente de Israel dos Estados Unidos, descreve sua experiência trabalhando em uma empresa de opções binárias desregulamentada no verão passado.
Muitos clientes tinham clicado em um anúncio tentando vender dinheiro em casa. & # 8216; Eles realmente acreditam que eles vão se tornar um milionário apenas fazendo isso & # 8217; & # 8212; ex-funcionário de atendimento ao cliente em uma empresa de opções binárias.
"Eles fazem com que seja extremamente difícil para os clientes sacarem seu dinheiro", diz Sam, que trabalhou no atendimento ao cliente e pediu que seu nome real não fosse usado.
"Você tem que encontrar uma cópia da licença do seu motorista, uma cópia da sua conta e há tantas regras e exigências." Metade das ligações com as quais tive de lidar eram apenas reclamações de pessoas, dizendo que já faz meses e preciso do meu dinheiro agora. Preciso pagar por isso ou aquilo. Praticamente a empresa simplesmente se recusa a desistir ”.
Na verdade, Sam diz que “não pode confirmar” que qualquer cliente já recebeu pagamento ou retirou seu dinheiro durante seus poucos meses trabalhando na empresa.
“As pessoas telefonavam de volta e ligavam de volta. E, eventualmente, às vezes um dos meus gerentes dizia: "Não atenda mais às ligações dessa pessoa e feche a conta." Eles diziam: "Acabamos com ele e com todo o dinheiro". # 8217; não importa. Não ligue mais para ele. '”
A maioria dos clientes da empresa de Sam era dos Estados Unidos, embora seja contra a lei dos EUA que as empresas vendam opções binárias para cidadãos americanos dessa maneira. Clientes adicionais eram da África, Qatar e Arábia Saudita. Muitos clicaram em um anúncio que apregoava maneiras de "ganhar dinheiro em casa" ou assistia a um vídeo que dizia revelar estratégias secretas de investimento.
“A maioria parecia ser & # 8230; a pessoa burra estereotipada ”, lembra Sam. “Você nem percebe que pessoas assim existem fora do cinema. Eles realmente acreditam que eles vão se tornar um milionário apenas fazendo isso. E é quase triste.
Perguntado sobre seus gerentes, Sam disse que eram jovens israelenses que pareciam pensar que era legal enganar as pessoas.
“Eles pareciam ter acabado de assistir 'The Wolf of Wall Street' e queriam imitar os personagens. As brincadeiras que eles teriam, seria como, oh sim, eu não posso acreditar que ele caiu por isso, eu não posso acreditar que você conseguiu investir $ 300.
Sam diz que um de seus gerentes de fato citaria os argumentos de vendas de Leonardo DiCaprio do filme ao vivo, ao telefone, ao tentar vender opções binárias.
& # 8220; & # 8216; Olá, John. Como vai você hoje? Você enviou minha empresa algumas semanas atrás, solicitando informações sobre um investimento que tinha enorme potencial de valorização com muito poucos riscos negativos, & # 8217; ele citaria de memória. & # 8216; Isso soa um sino? '& # 8221;
"Eu achei meio patético, para ser honesto," # 8221; lembra Sam.
Manipulando software.
Em 2013, os Estados Unidos proibiram a comercialização de opções binárias para seus cidadãos, exceto em algumas trocas regulamentadas. Em seu site, a Commodity Futures Trading Commission (CFTC), uma agência governamental independente dos EUA, alerta os investidores sobre “esquemas fraudulentos envolvendo opções binárias e suas plataformas de negociação. Esses esquemas supostamente incluem recusar-se a creditar contas de clientes, negar reembolso de fundos, roubo de identidade e manipulação de software para gerar negociações com perda. ”
“Negociar opções binárias pode ser uma proposta extremamente arriscada”, alerta outra agência reguladora dos EUA, a Financial Industry Regulatory Authority (FINRA), em seu site. “Ao contrário de outros tipos de contratos de opções, o & # 8221; Segundo a FINRA, uma SRO que regulamenta as corretoras membros e os mercados de câmbio, as opções binárias são proposições “tudo ou nada”. Quando uma opção binária expira, ela faz uma quantia de dinheiro pré-especificada ou nada, em cujo caso o investidor perde todo o seu investimento. Negociar opções binárias é ainda mais arriscado por esquemas fraudulentos, muitos dos quais se originam fora dos Estados Unidos ”.
Em Israel, muitas das chamadas empresas “forex” estão realmente vendendo opções binárias, o que significa que um cliente aposta se uma moeda vai subir ou descer, em vez de comprar a moeda, explica Jared K., ex-corretor de Wall Street, ao The Times. de Israel.
“Forex tradicional é que compro a 3,50, vendo a 3,60. Binary forex (isto é, forex no mundo das opções binárias) está dizendo 'se for para 3.60 eu ganho dinheiro, digamos 20% mais do que eu aposto, mas se for para 3.50 ou menor, eu perco '”
A negociação de opções binárias é ainda mais arriscada por esquemas fraudulentos, muitos dos quais se originam fora dos Estados Unidos & # 8212; Aviso do governo dos EUA.
Graham P., que atualmente trabalha em marketing para uma grande empresa de opções binárias regulamentada pelo Chipre, em Tel Aviv, diz que conhece os esforços para manipular software conforme descrito pela CFTC & # 8212; intervenção cínica por firmas de opções binárias para garantir que elas ganhem, o equivalente da indústria de uma roleta fraudada em um cassino.
“Falei com um cara com quem eu potencialmente trabalharia e ele realmente desenvolveu uma plataforma de opções binárias. Ele disse que todos que ele conheceu e que estava interessado em comprar a plataforma (para começar sua própria empresa) queriam que ele criasse uma porta dos fundos ”.
Por “porta dos fundos”, Graham quer dizer que as empresas querem ser capazes de manipular um “trade”; no último minuto, se um cliente ou grupo de clientes parece estar ganhando muito.
“Digamos que 70% dos traders estão, por algum motivo, apostando que o petróleo vai subir. Então, as empresas dizem que, se ganharmos apenas 30%, poderemos manter muito mais dinheiro. E o algoritmo faz isso. É muito fácil dizer ao cliente, oh, a linha ficou um pouco abaixo da sua posição. & # 8221;
Se o cliente trouxer a prova de que o preço do petróleo realmente subiu até o ponto previsto, a empresa indicará as letras miúdas, que afirmam que a empresa possui algoritmos próprios que podem diferir do tempo real.
"As taxas de negociação atribuídas aos ativos em nosso site são aquelas nas quais nossa empresa está disposta a vender opções binárias a seus clientes no ponto de venda," # 8221; lê um aviso típico em muitos sites de opções binárias. "Como tal, eles podem não corresponder diretamente aos níveis de mercado em tempo real no momento em que ocorre a venda de opções."
Graham, cuja empresa é regulada em Chipre, disse que, em sua opinião, “toda a indústria de opções binárias é fraudulenta”. Se for assim, isso representa uma corrupção cínica e sistemática em grande escala - # 8212; superando escândalos tão danosos quanto a venda ilegal de produtos do Mar Morto por israelenses em quiosques em shoppings ao redor do mundo & # 8212; impensadamente permitido florescer, com repercussões potenciais extremamente graves para Israel.
Por alguma razão louca, é legal na Europa. Nações europeias individuais estão deixando as opções binárias voarem. Enquanto países como os Estados Unidos cheiraram a besteira há muito tempo e a tornaram ilegal ”.
Graham disse que, no nível do intestino, ele gostaria de ver a indústria desligada, mas ele está preocupado.
“Há tanto dinheiro entrando na cidade; é literalmente uma indústria aqui & # 8212; Estou incluindo forex também. Provavelmente está pagando pelo sistema de metrô que estamos instalando. Você pode imaginar milhares de pessoas em Tel Aviv desempregadas?
"Uma má reputação"
Chaya Berkowitz, uma veterana de oito anos de empresas forex em Israel, diz ao Times of Israel que sua própria experiência na indústria tem sido boa. “Eu não sou indiferente. Estou ciente de que tem uma reputação muito ruim. Eu não acho que 100% é justificado. ”
Berkowitz afirma que existem empresas legítimas no setor e divulga os nomes FXCM, Alpari e FXPro, nenhum deles baseado em Israel.
“Se você tem dez empresas forex, provavelmente seis ou sete delas têm má reputação, o que dá aos outros uma má reputação. É lamentável, porque os outros levam seus negócios a sério e se importam com os clientes ”, diz ela.
Perguntado se aqueles seis ou sete são culpados de fraude, Berkowitz afirma: "Eu não diria que eles estão cometendo fraudes. Eles têm a reputação de mentir para seus clientes e publicidade enganosa. Isso definitivamente existe, mas há uma razão pela qual algumas das grandes corretoras ainda estão por aí. É porque eles costumam jogar pelo livro & # 8212; caso contrário, eles não estão por aí por muito tempo ”.
Berkowitz estima que, em empresas legítimas de divisas, dois ou três de cada dez clientes ganham lucros e podem facilmente sacar seu dinheiro. Perguntada sobre como saber se uma empresa é legítima, ela diz: "Eu procuraria uma regulamentação mais rígida, e não uma empresa regulada em alguma ilha em algum lugar, mas regulada no Reino Unido, nos Estados Unidos ou na Austrália".
Chipre, ela afirma, tornou-se mais rigorosa nos últimos anos. "Está se tornando uma agência reguladora mais reconhecida".
“Eu também perguntaria a amigos ou outros investidores. A palavra pessoal é enorme. Eu faria meu dever de casa. Procure online para ver quem tem uma boa reputação. Gostaria de fazer perguntas ao pesquisar um corretor. Eu tenho acesso fácil ao meu dinheiro? Você oferece educação?
Enrolando os clientes em.
Depois de obter seu mestrado em Israel e se casar com uma israelense, Lynne R., uma californiana nativa, começou a procurar emprego, mas ficou decepcionada com o que estava por aí.
“Foi realmente chocante para mim, uma vez que comecei a ir a empresas, descobrir quão baixos os salários eram. Eu queria encontrar algo mais competitivo, mais parecido com o que eu estava ganhando nos Estados Unidos. ”
As pessoas mencionaram a Lynne que os trabalhos de opções binárias pagavam bem. Ela postou o fato de que ela estava olhando para alguns sites de emprego no Facebook, e "eu provavelmente tinha 25-30 pessoas ligar para marcar entrevistas".
Lynne foi em cinco ou seis entrevistas, onde ela aprendeu que era elegível para dois tipos de trabalhos.
“Há conversão e retenção. Para os trabalhos de conversão, eles me diziam que eu ganharia cerca de 15.000 shekels (US $ 3.850) por mês e, para trabalhos de retenção, eles me diziam que eu poderia ganhar de 30.000 a 40.000 (US $ 7.700 a US $ 10.250) por mês.
Em cada entrevista, Lynne examinou extensivamente a natureza do trabalho. Cada empresa tem seus próprios métodos de marketing, muitas vezes envolvendo vídeos que contam a história de uma pessoa que aprendeu um método secreto de extrair dinheiro do mercado, diz ela. Uma firma disse a ela que atraía clientes com um robô "& # 8221 ;:
“Eles disseram que, basicamente, usamos um programa, que chamamos de robô. Nós comercializamos isso para as pessoas e dizemos que ele pode fazer pequenos negócios para você, como US $ 100 ou US $ 200, e há um programa de Internet que faz, você sabe, um pouco de mágica e faz algumas centenas de dólares extras por mês. "
O trabalho de Lynne seria chamar pessoas que pagaram US $ 200 para usar o robô e persuadi-los a aprofundar seu envolvimento.
& # 8220; Você os chama e diz: "Bem, você tem esse robô, mas não é realmente um ótimo programa"; foi vendido a você por uma afiliada nossa. Se você quer ganhar muito dinheiro, precisa começar a negociar, e podemos dizer-lhe como. Somos comerciantes especializados. Tudo o que você precisa fazer é fazer um depósito maior, e você terá uma conta personalizada conosco e com um trader pessoal. Tudo que você precisa fazer é fazer um depósito de $ 500 e nós vamos começar. ”
Lynne foi finalmente oferecido um trabalho de retenção, e foi matriculado em um curso de formação de duas semanas. A primeira coisa que lhe disseram foi para nunca revelar que ela estava ligando de Israel. Toda a equipe de retenção foi solicitada a posar como corretores treinados trabalhando em um escritório em Londres. Eles foram obrigados a retocar o tempo do dia em Londres, bem como o que estava acontecendo nos noticiários.
“Você teve que se fazer uma biografia. Você precisava pensar em uma escola de negócios e dizer que foi para lá. Você precisava dizer que era um negociante, que havia trabalhado para um banco de investimentos ou para Wall Street. Se você é uma mulher, eles o incentivam a dizer que você é solteiro porque os rapazes provavelmente depositarão com você. Se você é um cara, você quer ter uma esposa e dois filhos, porque isso faz você se relacionar.
A empresa, ela disse, foi regulamentada em Chipre. “A indústria é certificada para a Europa, mas você não é fortemente regulamentado. É uma forma de ser credenciado pela UE sem muita supervisão. ”(A Finance Magnates, uma publicação comercial da indústria de comércio financeiro on-line de Israel, escreveu no passado que Chipre tem uma reputação de regulamentação negligente.)
& # 8216; Quando oferecemos treinamento para eles, compartilhamos a área de trabalho deles e os orientamos pelo site. Foi-nos dito que procurássemos a sua área de trabalho por pornografia, slots online ou outros sinais de comportamento compulsivo, porque isso significa que é mais provável que façam um depósito & # 8217; & # 8212; antigo agente de retenção de opções binárias.
Lynne diz que o ponto de venda de sua empresa, sobre o qual se gabava, era que era mais ético do que outras empresas de opções binárias. "Se alguém pedisse para sacar seu dinheiro, nós o daríamos dentro de 48 horas", diz ela.
Quando Lynne começou a brincar com a plataforma de opções binárias de sua empresa, ela percebeu que era divertido e viciante, "quase como um jogo de azar".
Houve muita adrenalina.
“Se você colocar dinheiro em sua conta de investimento hoje, isso pode gerar retornos de 3% a 6%. No binário, você vê 70% chegando imediatamente. ”
Se fosse esperado que os agentes de conversão fizessem com que um cliente fizesse seu primeiro depósito, os agentes de retenção, como Lynne, receberam a tarefa de trazer o grande dinheiro. O primeiro passo foi dimensionar o cliente.
“Eles nos disseram que procurássemos as casas das pessoas no Google Maps para ver o quanto elas pareciam ricas e checar suas informações de cartão de crédito para ver se tinham status de ouro ou platina. Além disso, quando oferecemos treinamento para eles, compartilhamos a área de trabalho deles e os percorremos pelo site. Fomos informados para [abusar desse acesso e] procurar em sua área de trabalho por pornografia ou caça-níqueis on-line ou outros sinais de comportamento compulsivo, porque isso significa que é mais provável que eles façam um depósito. ”
“Você liga para alguém e diz que meu nome é Jane Smith. Estou ligando de Londres, onde sou banqueiro de investimentos para essa empresa incrível. Estou ligando para falar sobre o quanto você realmente quer fazer. Vimos que você investiu US $ 300, mas sabemos que US $ 300 não farão nada para você. Então, o que você realmente quer fazer daqui a um ano?
“Então, as pessoas diziam: 'Eu quero ganhar $ 100.000'. 'Eu quero comprar uma casa' ou 'quero viajar'.” # 8221;
“Eles dizem algo que eles querem e então você diz: 'então você levará 6-8 meses para conseguir isso. Se você quiser alcançá-lo, você precisa negociar todos os dias. Eu vou trabalhar com você. Eu vou lhe dar informações sobre quais escolhas fazer todos os dias.
Lynne disse que o "corretor" faria check-in com os clientes regularmente, incentivando-os, ensinando-os sobre o mercado e oferecendo dicas. Quando o corretor escolheu uma ação para apostar, as ações geralmente se comportariam como prometido. Quando eles chegaram na plataforma e fizeram suas próprias escolhas, eles começaram a perder. Então o corretor voltaria e os ajudaria a fazer boas ligações, e eles ganhariam novamente.
"Então, basicamente, você se depara como um grande profissional, mas na realidade você está apenas tentando fazer com que o volume de negociações seja o mais alto possível."
O próximo passo, lembra Lynne, foi pedir um depósito de US $ 10.000.
"Os clientes costumam recusar e dizer: 'Não é possível depositar US $ 10.000'. Então você os pressiona e diz: 'Se você não está realmente empenhado em ganhar dinheiro, por que estamos falando agora?' Os comerciantes tentam tudo. Alguns são realmente doces, alguns tentam se identificar com eles, alguns tentam fazê-los se sentirem estranhos & # 8212; seja qual for a técnica que os faça depositar. A técnica favorita é dizer: "Se você depositar US $ 5.000, eu lhe darei um bônus de US $ 5.000." Os clientes ouvem isso e dizem "Isso é loucura". Eu vou depositar. '”
Mas o bônus, explica Lynne, é uma armadilha.
“Você não tem permissão para sacar qualquer parte do seu dinheiro até que você use esse bônus em dinheiro de 30 a 40 vezes. Digamos que eu lhe dê um bônus de US $ 1.000. Você precisaria negociar isso até obter um lucro de pelo menos US $ 30.000, e então pode sacar seu dinheiro. Mas você nunca chegará a essa quantia. Digamos que você faça $ 10.000 com isso e disser que quer se retirar, no contrato ele dirá que você não pode desistir. Você pode retirar seu dinheiro original, mas não pode levar o bônus ou o dinheiro que ganhou com o bônus. ”
“Assim, os clientes ficam presos no sistema, porque não querem perder todo o seu dinheiro e, quando trocam 30 vezes o valor do bônus, perdem tudo.”
Quanto mais tempo você troca, mais dinheiro perde, diz Lynne. "Você não pode ir tão longe normalmente e ter sucesso."
No entanto, Lynne diz novamente, com sua empresa, se você resistiu à tentação de receber o bônus, e se você fizer um pedido, a empresa lhe enviará seu dinheiro.
“Eles realmente se gabavam do fato de que eram bons em dar às pessoas seu dinheiro imediatamente. In fact, they encouraged people to take small withdrawals. If a customer had $10,000, they would say, why don’t you take $2,000 and take your wife on a small trip? It’s very calculated with how much they’re giving out and how much leeway to try to give the customers.”
Lynne quit her binary options job soon after the training course because she said she couldn’t stomach taking the savings of “schoolteachers and truck drivers.” Asked whether she thought what she had been assigned to do was unethical or illegal, she replies: “It was certainly unethical. When I tell people about this job, they are shocked. They say, that could never be legal, there’s no way Israel would ever allow that.”
‘Economic terrorism’
In November 2014 a man by the name of Ariel Marom, who described himself as a former employee of several companies in the forex industry, sent a strongly worded letter to both the Finance and the Ethics committees of the Knesset, as reported in Israel’s financial daily Globes.
“I am calling on the regulator in charge of banking services and the Knesset Finance Committee to immediately take action to stop the wave of plundering, theft, fraud, money laundering, and crime on an international scale that is managed and operated in Israel that is hurting thousands of customers around the world.”
Marom described the forex industry as “economic terrorism” targeting the citizens of many countries.
“When this information becomes public knowledge through investigative reports by the media, which is bound to happen sooner or later, Israel’s status in the world will be damaged and it will unleash a wave of hatred toward the Jewish people and Israel, causing tremendous damage.”
‘When this information becomes public knowledge through investigative reports by the media… Israel’s status in the world will be damaged and it will unleash a wave of hatred toward the Jewish people and Israel, causing tremendous damage’ & # 8212; letter sent to Knesset committees.
Marom said in the letter that he had been searching for a job in recent months and as a Russian speaker had interviewed with forex companies that operate in Israel and target customers abroad. He said he was surprised at the sheer magnitude of the fast-growing industry.
“There are hundreds of jobs currently available to Arabic, Russian, English, Spanish and French speakers as these companies seek new workers for their expanding departments.”
Marom added that after years in the traditional banking industry, he was shocked at the practices he witnessed in several forex companies.
“In the absence of any regulation, they are simply robbing customers. Many people compare forex to a casino, but it’s worse than a casino. A casino hands you your winnings immediately. Forex companies — and I’m talking about most of them — simply do not allow people to withdraw money.”
Marom goes on: “Many forex customers have no idea that the company operates from Israel, especially when we’re talking about the Arabic-speaking desks. Their complaints never reach our justice system and so the industry is not exposed. How is it possible that this has been happening for years, with no local regulation? What happens when thousands of Turks, Russians, Spaniards, Italians and French figure out that the scam they fell for was carried out from here, in Israel? Are our regulators waiting for synagogues to start blowing up all over the world to shut this thing down?”
It is not clear what the Knesset Finance Committee did in response to Marom’s letter. The Times of Israel tried to track Marom down, but the CEO of FeeX, a high-tech startup he used to blog for, said he had not heard from Marom for a few years and had no contact information. Marom’s LinkedIn profile placed him at a high-tech company in Brazil where no one who answered the phone seemed to speak English. A phone call to an “Ariel Marom” listed near Haifa was answered by a woman who said her husband is an astronomer, not a finance professional.
“You’re the third journalist who has called looking for Ariel Marom in the last two weeks,” she said. “Now I’m curious.”
The Times of Israel asked for the help of SixGill, a cybersecurity high-tech firm that specializes in the dark web, to track down Marom, but after a brief automated search, Tommy Ben-avi, a senior analyst at Sixgill, concluded that either “Ariel Marom is not his real name or he doesn’t want to be found.”
The cyber intelligence company did, however, make some interesting observations about the forex and binary options industries. Ben-avi mentioned several companies known to be operating from Israel.
“This industry is a bit shady. It’s hard to get to the owners and CEOs of some of these companies. Most of the time, when you have a company that large, you can see the owner, you can see the shareholders.”
Ben-avi conducted an automatic search with a system that scours hundreds of thousands of sites and closed dark web forums. “It seems like they’re trying to hide their identity. Maybe a few companies have the same owner, and they want to hide that fact,” he mused. “Or maybe their business is not 100 percent legitimate.”
How it’s done on Wall Street.
Jared K., a licensed stockbroker from the United States who now lives in Tel Aviv, says that he sees several problems with the local forex and binary options industries.
“On Wall Street, brokers are regulated, transactions are regulated, the money is regulated. Where is it coming from and where is it going? There are rules as to how someone can access money in a claim.”
‘I am shocked that Israel hasn’t shut this down’ & # 8212; US-licensed stockbroker who lives in Tel Aviv.
Furthermore, says Jared, in the United States, a license to sell securities or handle client investments would require a person to meet certain ethical standards. If they don’t look out for the best interest of their client’s investments, it is a criminal offense.
“On Wall Street I can’t put someone in an investment that doesn’t fit them. That is fraudulent. If I called up your parents and said put money in this investment and they lost it all, in theory I could be arrested and go to jail.
“Binary doesn’t have that, there are no repercussions. What happens if someone loses money? Nothing.”
“I am shocked that Israel hasn’t shut this down,” he sums up.
A product that invites fraud.
Yaron Zelekha, Israel’s former accountant-general, became known as the country’s foremost whistle-blower in 2007 when he exposed the financial improprieties of a sitting prime minister, Ehud Olmert.
‘I personally would not advise any Israeli to trade with any of these companies’ & # 8212; Yaron Zelekha, Israel’s former accountant-general.
Zelekha told The Times of Israel that he doesn’t want to tar all its players with the same brush, but that binary options and some instruments related to forex are designed in a way that creates a strong incentive for fraud.
“There is a very wide information gap between the public and these players, and they are exploiting it to their advantage. The broker is not giving you a service like in a bank; he is personally betting against you. This is a flagrant conflict of interest, because you’re betting on something, and the person reporting the outcome wants you to lose.”
Such circumstances invite fraud, says Zelekha, and “there is no small number of companies that simply defraud the customer. Sometimes that fraud is very sophisticated.”
Asked whether the entire industry should be shut down, Zelekha responds, “There is no need to throw out the baby with the bathwater, although I personally would not advise any Israeli to trade with any of these companies.”
What the industry does need, he says, is real-time regulation. He says there is software that can now do real-time monitoring of a company’s transactions.
“The Israel Securities Authority (ISA) must have real-time access to these companies’ computer systems.”
Zelekha says the ISA has fought a long battle to regulate the online financial trading industry. “They deserve credit for their efforts, although the regulation won’t be effective if it isn’t done in real time.”
ISA: ‘We probably won’t allow binary options’
The Israel Securities Authority is housed in a 1920s Eclectic-style building in one of Tel Aviv’s loveliest neighborhoods, near the stock exchange. Itzik Shurki, director of the ISA’S Exchange and Trading Platforms Supervision, is a soft-spoken man, but he has harsh words for binary options.
Shurki says a new law to regulate online financial trading industries went into effect in May 2015. The companies that wanted to continue to offer their products to Israeli customers had to request a license from the ISA. Twenty-one companies requested licenses. One was disqualified, because its controlling shareholder, Aviv Talmor, had fled to Cyprus to escape arrest for alleged financial misdeeds. Talmor has since returned to Israel and is currently under house arrest. Two other companies withdrew their applications, leaving 18. Of these, four are primarily binary options companies, while the others seek to offer other types of CFDs, or contracts for differences, as well.
‘With binary options we’ve already informed the companies that our intention is probably not to approve this product’ & # 8212; Itzik Shurki of the Israel Securities Authority.
Almost a year later, none of the applicants has been approved. Shurki says that the industry is currently in a transition period while the ISA reviews the applicants. During this period, the 18 companies have permission to continue to operate.
“If we decide yes, they will become fully regulated companies; if we decide no, they will have to stop their operations.”
Which way is the ISA leaning? “With binary options we’ve already informed the companies that our intention is probably not to approve this product. Sua base é problemática. Because ultimately — I don’t want to use the word ‘gambling’ because it is a financial product — but in the way it is offered and in the short time frame, and with all its complexity, in our view it brings it closer to a guessing game than a financial product where you can evaluate its worth.”
CFDs, or contracts for differences, a high-risk financial instrument that is also banned in the United States except on registered security exchanges, will be allowed in Israel, says Shurki. However, Shurki says CFDs will be regulated in real-time and aggressive or deceptive sales tactics will be rendered illegal. The ISA will monitor the prices of every product offered to make sure they are transparent and fair; traders will need to be licensed; and traders will also be prohibited from offering advice or tips to their customers.
“You can’t be in a position to give advice when their earnings are your loss,” Shurki explains.
This all sounds quite impressive. Once the ISA makes it decision, one might be forgiven for thinking, the binary options fraudsters will be out of business. But there’s a catch — a great big catch that potentially excludes the overwhelming proportion of binary options trading from effective supervision in Israel: The new regulations apply only to companies that target Israeli customers. If a binary options or forex company targets customers abroad exclusively, it will not be regulated by the ISA. Thus, to ensure that the new law not apply to them, companies need only exclude Israeli clients.
A quick visit to the websites of several binary options firms does indeed prompt messages saying the service is not available to Israelis.
Shurki says he is aware that the new regulations will not solve the problem of call centers that are defrauding people abroad, but says that such activity is not under the ISA’s jurisdiction, in the same way that the Financial Conduct Authority (FCA) only protects British citizens and the CFTC only protects Americans.
“If an American company tried to sell securities to Israelis, it would be our job to protect our citizens, not the Americans’ responsibility,” he explains, although he adds that the ISA does have very good information exchanges with its foreign counterparts.
Yes, but when an Israeli company steals from people in another country, is that not a crime?
“It is a crime,” says Shurki, but it’s not a crime for his authority to investigate. “There’s no such thing as a vacuum of authority. If an Israeli commits fraud or misrepresentation, that’s the purview of the Israel Police.”
The French connection.
Perhaps nowhere is the hand-wringing and acrimony over Israel-based forex and binary options trading more anguished than in the community of French Jews living in Israel.
In January of this year, a cover story of the French-language “Israel Magazine,” a monthly glossy magazine and website serving the French-speaking community in Israel and the Diaspora, was titled, “Forex, is it kosher?”
‘A generation of young people is in the process of perverting themselves into worshipers of the golden calf’ & # 8212; journalist in a piece warning about Forex.
In the introduction to the piece, journalist Andre Darmon writes, “The point of this article is not to point a finger at some of our fellow citizens or co-religionists, because the phenomenon is global, but to raise awareness that a generation of young people is in the process of perverting themselves into worshipers of the golden calf. And that earning a living does not mean everything is permissible!”
“These call centers hire lost young souls,” writes journalist Ilana Mazouz in Alliance, a French-Jewish Internet magazine, “many who do not speak Hebrew or English, and for a short time provide the illusion of a normal life in Israel.”
Some rabbis have forbidden people from working in the industry, calling it “theft,” while rabbinic lectures on the Internet in French bear titles like “Forex, dirty work and Amalek.”
Again, numbers are hard to come by for how many young French speakers are employed in the industry. Didier F., a French-Jewish businessman, told The Times of Israel that after he graduated from the IDC-Herzliya, many of his fellow students were recruited by forex and binary options companies.
Didier asserts that many owners of forex websites are members of a French-Jewish community of conmen who are hiding from French law enforcement in Israel, where the police, he alleges, don’t bother them over-much.
As previously reported in The Times of Israel, about 10 recent immigrants from France were charged last year with cyber crimes and telephone scams, while France has reportedly sent Israel 70 additional formal requests for judicial assistance for cases of suspected fraud. A movie was recently made in France about one of these alleged fraudsters. The movie is called “Je Compte sur Vous, French for “I’m counting on you.”
“I love when they say French aliyah has increased so much; now it’s 7,000 people,” says Didier. “It’s great, I’m happy about it. But then you see that many of them are working in the forex industry or binary options industry. You go to Tel Aviv today, when you say to someone in the French community, I work in finance, they immediately think that you work in this shit.”
Adds Didier: “Even if it’s a small amount of money, they’re stealing money from poor people. It’s destroying families. Some people have killed themselves.”
According to a report in Le Nouvel Observateur, a French news weekly, l’Autorite des Marches Financiers, the French securities authority, received a staggering 4,500-plus complaints about forex and binary options fraud in 2014. Those forex and binary options complaints constituted 37 percent of all complaints about securities fraud received by the authority in that year. The majority of the forex transactions that prompted those complaints originated in Israel, the article claims.
What does Google have to do with this?
There is yet another piece of the binary options empire, and it relates to the way Israeli firms manage to reassure customers of their ostensible integrity, via Google.
Let’s say you are a potential binary options customer. A company has approached you about making a deposit, but you are not sure, so you decide to do your homework. You Google, “Are binary options legitimate?”
You will get a list of results, one or two of which may be fraud warnings from the US regulatory body, the CFTC. The first few pages of search results, however, are dominated by sites that purport to warn you away from “scam” binary options sites and steer you toward legitimate ones. Upon closer examination, however, many of these “helpful” sites themselves turn out to be affiliates of the binary options companies.
Next, you might Google, “Are binary options legal in the United States?” Once again, many of the top results turn out to be websites affiliated with the industry itself, rather than an objective source of information. Some of these sites offer misleading statements and half-truths like “There are at this moment no laws both on the federal and state level that forbid US citizens from trading binary options online.”
US law banning binary options is directed at the companies that market them, not the customers who buy them, so there is some truth in that statement. However, the SEC and CFTC clearly warn investors that “they may not have the full safeguards of the federal securities and commodities laws if they purchase unregistered binary options that are not subject to the oversight of U. S. regulators.”
Many countries, including Canada, publish updated lists of unregistered binary options companies that solicit customers in Canada in violation of the law. A recent Canadian list is here. The list features 37 companies. The Times of Israel went to the website of each company on this list. Some were no longer in operation. Others blocked users from Israel (presumably to avoid trouble with the Israel Securities Authority). One now hosts a porn site. Most were hard to pin down to a geographic location. However, based on first - and secondhand sources, The Times of Israel suspects that more than half of these companies, if not the overwhelming majority, operate from Israel.
“Investing with offshore companies operating outside of Canada can be risky and is a common red flag of investment fraud,” the Canadian Securities Authority warns. Yet if you Google “Canada, binary options, blacklist,” once again, many of the top search results appear to be industry-affiliated sites, some of which recommend as legitimate the very same sites that are on the Canadian government’s blacklist.
Bryan Seely, a Seattle-based cybersecurity expert, tells The Times of Israel he is not surprised to hear of these Google search results, which, he explains, show Google’s search engine being manipulated.
“Google doesn’t make a point of censoring stuff; you can find drugs, you can find steroids, you don’t have to go to the Silk Road. Google indexes the Internet and ranks things where it ranks them.”
Asked why, if this industry allegedly has so many victims, their voices don’t show up higher in Google rankings, Seely says, “the victims aren’t as good at promoting what happened to them as the people in the binary options industry are at promoting the stuff they’re selling. The victims aren’t all going to each other’s pages” — so each victim’s page would typically have only a low Google ranking.
Seely, who has been battling to raise public awareness of massive search engine manipulation in the locksmith industry — another area, incidentally, where systemic fraud in the United States, with large-scale Israeli involvement, has caused scandal in recent years — adds, “here’s the underlying issue: Is Google safe to use? Or Bing?”
What he’s really asking, when it comes to the binary options industry, is whether searching Google will lead a potential investor who fears being defrauded to the independent, credible and accurate information he is seeking. The answer, it would appear, is no.
Search engine optimization and the secret of success.
Over the last decade, Israel earned the nickname “start-up” nation for its high-tech prowess. But not many people are aware that the country is also a global leader in online marketing and search engine optimization (SEO), an expertise it acquired in the “shadow industries” of porn, online gambling and binary options, according to TheTime’s 2014 report on the Israeli Internet industry. That expertise has plainly been applied by fraudulent binary options firms, whose affiliated sites show up high in Google searches — sending unsuspecting and naive clients their way.
Yoni S., an Israeli high-tech entrepreneur and SEO consultant, explains that without effective SEO, a fraudulent local player remains local, defrauding perhaps a few hundred victims in his vicinity. But with the power of Internet marketing, the scammer’s reach can go global.
The Times of Israel sent Google a request for an interview about the manipulation of its search platform by allegedly fraudulent businesses in the binary options industry, but Google did not respond.
What do the police have to say?
The Times of Israel contacted the Israel Police repeatedly to ask them about alleged fraud in the forex and binary options industries. Their answers underlined how law enforcement is struggling to grapple with the soaring, fast-moving challenge of Internet crime.
“If there are investigations going on into fraud, etc., I don’t have information on this. If someone has filed a complaint to the police, then let me know,” Israel Police spokesman Micky Rosenfeld replied.
A second police spokesperson, Luba Samri, told The Times of Israel, “We got lost in your question. Please focus it more. Who filed a complaint against whom?”
Finally, The Times of Israel called a third spokesperson, Merav Lapidot, and asked her what the police are doing about suspected fraud on a vast scale in the forex and binary options industries in Israel.
“This is something you’re claiming. Se ninguém se queixou disso, não há problema. You want us to check every company in Israel and see if by chance they are committing crimes?”
Told that people who worked inside the industry have described widespread potentially fraudulent behavior on the order of hundreds of millions of dollars, affecting tens of thousands of people, Lapidot replied: “But no one has complained. I don’t know what happens in every company. That’s not our job. You could start a business tomorrow selling jewelry over the Internet. Will the police come to investigate your business?”
To the suggestion that there may be thousands of victims abroad, Lapidot said, “If there is someone who complained, we need to check that specific complaint. We’re not going to check a whole issue.”
Is it possible that an entire industry, much of it allegedly corrupt, is slipping through the cracks between Shurki’s Israel Securities Authority, which doesn’t handle crimes hatched in Israel whose victims are abroad, and the police, which won’t act unless specific complaints are filed with them?
Zvika Rubins, a PR consultant for the Israel Securities Authority, says the law simply hasn’t caught up with the dubious and crooked methods people have devised to make money on the Internet.
“When you talk about bits and bytes, it’s not that simple. Was there a crime? Where did it take place? For instance, let’s say you have a company and it’s incorporated in the British Virgin Islands and its servers are in India and it has a trading room in Israel. Is it an Israeli company? I don’t know.”
Rubins, who stresses that he is not an expert on criminal law, muses that if someone in Israel commits a crime against someone in, say, France, over the Internet, then it might be the responsibility of the French to open an investigation, trace the crime to Israel, and approach the Israeli police about it.
Yoni S., the SEO expert, is outraged by this approach. “In Israel it’s against the law to murder, but if I establish a company in Israel that murders people through the Internet in Malaysia, that’s okay?”
Seely sees the problem as extremely serious and growing: “We’re becoming a global culture and global economy, and physical borders don’t exist on the Internet. It’s become easier to scam people all over the world. We have no protections in place to prevent it and it’s getting worse.”
“It’s a jungle out there,” says Yoni, referring to the fact that people do all sorts of things on the Internet that would be illegal within their own borders.
“The Internet came in, no one has passed any regulation yet, and now there is an opportunity to make tons of money in the jungle.”
A response from inside the industry.
Tali Yaron-Eldar, Israel’s income tax commissioner from 2002 to 2004, in 2007 founded eTrader, a binary options firm that targets Israelis, along with Shay Ben-Asulin, who also co-founded AnyOption, one of Israel’s largest binary options companies with revenues in the tens of millions of dollars. In 2011, Ben-Asulin was indicted by the United States for securities fraud, and last month he was convicted of fraud by an Israeli court for helping an Israeli credit card company, ICC-CAL, illegally clear billions of shekels of charges from porn, binary options and gambling websites, as well as conceal the number of canceled transactions. For his crimes, Ben-Asulin will do five months of community service and pay a fine of less than $1 million.
In a 2014 interview (Hebrew) with Israel’s Channel 10 news, when asked if she was discomfited by the fact of young demobilized soldiers and old pensioners losing all their money trading binary options, Yaron-Eldar responded: “Ask the people who invested and lost their money. All of them knew they were entering something risky.”
The Times of Israel contacted Yaron-Eldar to ask her about alleged fraud within the binary options industry.
To the extent that this is true, she said, it applies to unregulated companies.
“The companies with a license are very careful,” ela diz. “AnyOption [a company she is associated with] has a Cypriot license. It is very careful to follow the law. It is being watched all the time.”
In Yaron-Eldar’s view, and contrary to the opinions of other people interviewed for this article, Cypriot regulation is very tough, on a par with the UK’s Financial Conduct Authority (FCA).
Asked about the fact that the Canadian government has included AnyOption on a list of companies illegally soliciting Canadian citizens, Yaron-Eldar replies, “Not that I am aware of.”
In fact, Yaron-Eldar insists that AnyOption is not an Israeli company at all.
“AnyOption does not have offices in Tel Aviv. It’s a company that operates from Cyprus.”
Indeed, a perusal of anyoption reveals no references to Israel. Nevertheless, it is no secret that hundreds of employees go to work each day at AnyOption’s offices at 38 Habarzel Street in Tel Aviv’s Ramat Hachayal neighborhood. How does she explain this discrepancy?
“They’re not working for the same company,” ela diz. “They’re working for AnyOption Israel, not AnyOption Cyprus. The company they work for is a service provider to the company in Cyprus.”
In other words, AnyOption (like many other binary options companies with similar corporate structures) is not in fact an Israeli company, according to Yaron-Eldar’s reasoning. This means that it, and many others like it, is subject to Cypriot law and regulation, not Israeli law. Since much of the regulated part of the binary options industry is subject to Cypriot regulation, the honesty or dishonesty of those firms may hinge on the strength and honesty of Cypriot law enforcement.
Where are the victims?
The Times of Israel contacted the FBI to see if anyone had complained about forex or binary options call centers in Israel, but the agency did not respond.
ASIC, the Australian Securities and Investments Commission, replied in an email, “We don’t comment on operational matters, this includes confirming or denying if we have received complaints about a particular matter or not.”
A French government spokeswoman, however, confirmed that France has been having problems with forex fraud emanating from Israel.
“Yes, there are some cases of fraud, as you say,” ela disse. “Forex is not per se a fraud but it can be used for fraudulent objectives. We have had some cases between France and Israel, and we are in touch with the Israeli authorities about this. There is a very good cooperation between the two countries and the two services on this issue.”
Back to Australia.
Ariel Marom, the mysteriously disappeared former forex employee who wrote that anguished 2014 letter to the Knesset, warned of the fallout when the extent of the corruption in the binary options industry in Israel is exposed.
“What happens when thousands of Turks, Russians, Spaniards, Italians and French figure out that the scam they fell for was carried out from here, in Israel?” he asked in his letter. “Are our regulators waiting for synagogues to start blowing up all over the world to shut this thing down?”
Dan Guralnek, the Australian immigrant, has drawn his own conclusions. “This amount of dishonesty would never be allowed to exist in Australia,” ele diz. “They would shut down [the industry] overnight.”
Guralnek recently became engaged to an Israeli woman. But he hopes to persuade her to move back to Australia with him, in part because of the high cost of living that drove him to work in binary options in the first place, and in part because of the corruption he has encountered.
“Now I see corruption everywhere I look,” ele diz. “Anywhere where there’s no light shining on the corruption in this country, it feels like it’s growing.”
CoursTorah, the website of a Francophone synagogue near Tel Aviv’s Hamedina Square, has a page on its website warning against the binary options industry, headlined “Stop the Scam!”
“Many people you know work directly or indirectly for these scam websites,” reads the page, warning that binary options and the majority of forex companies operating from Israel are fraudulent. It advises congregants to “run away from these companies!”
And it issues an evidently all too necessary reminder: “Let us remember the eighth commandment, ‘Thou shalt not steal.'”
Tag: cross border payment and settlement systems.
Cross Border/Offshore Payment and Settlement Systems.
Cross Border/Offshore Payment and Settlement Systems.
There are several ways by which international payment transactions are done around the globe.
Main mechanisms for payment and settlements are as follows:
Correspondent Banks Network – loosely coupled network of private banks. Clearing Bank Model - using international clearing banks – China’s RMB Clearing Banks Cross border RTGS – used mainly in regional economic and monetary blocs such as EMU – TARGET2. Clearing House model – Offshore Payment, Clearing, and settlements through systems such CHIPS in USA and CIPS in China.
Central Banks also have created a Currency Swap network for providing liquidity in international financial markets.
Recently, there has been a decline in correspondent banks network transactions. Many global banks have withdrawn correspondent relationships with other banks due to increased regulations.
There is also a newer trend in using ACH networks for international transactions. SEPA in Europe and FedGlobal ACH in USA are two examples.
SWIFT and CLS bank also play a critical role in international payments.
There is also very large OTC FX market in which 5.1 trillion USD per day are traded. I am not yet sure about the clearing and settlements of these transactions.
There are some newer technology platforms which have started providing Global payment services. Earthport in UK and Ripple Labs are two such examples.
Large Value Transfer Methods (B2B Transfers)
Cross border, Same Currency – TARGET2, SEPA, EURO1 Offshore, currency specific – CHIPS for USD, CIPS for RMB Cross border, multiple currencies – SWIFT, CLS Offshore Clearing Houses – Hong Kong, Singapore, London, Japan, Frankfurt, USA OTC FX markets (FX SWAPS, FX SPOT, FX Forward, FX Futures) Network of Correspondent Banks Network of Clearing Houses CB FX Swap Network Intra bank payment networks: Multinational Banks (Branch or subsidiary in a foreign country) FEDGlobal ACH Hawala System.
Regional Blocs (where new RTGS are being developed)
East Africa Community (EAC) West African Monetary Zone (WAMZ) Common Market for East and South Africa (COMESA) South African Development Community (SADC) – SIRESS RTGS Automated Clearing House in Common Monetary Area (CMA) ASEAN AEC ? South Asian (Asian Clearing Union) ?
LVPS used for International Payments.
EURO1 ( Pan Europe) euroSIC (Frankfurt) used for Euro transactions between countries in EU but not in EMU. FXYCS (Japan) EAF (Germany) SIC (Switzerland) CHIPS ( USA) CHAPS (UK) LVTS (Canada) CIPS (China)
I am not sure how many of these networks are currently operational since countries in EU have migrated to TARGET2 since 2008.
G-LVTN (Global Large Value Transfer Networks)
There are several newer solutions for international payment and money remittances at retail level. B2C and C2C international money transfers. They are listed here along with old solutions but are not discussed in this post.
New and Old Solutions (Retail B2C, C2C)
Block chain Ripple Earthport Transferwise Xoom (A Paypal service) Paypal Bitcoins Western Union (Old) MoneyGram (Old) Money2India/ICICI Bank State Bank of India Global ACH with FX Conversion International ACH Transactions.
One of the main reasons for this discrepancy is the inadequacy of the infrastructure for cross-border renminbi payments. Cross-border payments are currently made via a patchwork of clearing hubs and correspondent banks. These payments are hindered by complicated routing procedures, the need to maintain multiple foreign correspondent accounts, liquidity shortages in some offshore RMB centers, different hours of operations between clearing centers, a lack of common standards between international and Chinese domestic payment systems, and China’s capital controls.
Despite these hurdles, the use of the renminbi as an international payments currency has continued to grow rapidly. In the first half of 2015, there were more than RMB 5.7 trillion (USD 866.7 billion) worth of payments made to and from China using the renminbi. Currently, around a third of payments between China and the Asia Pacific region are conducted using renminbi. These numbers are projected to increase substantially over the coming years due to the desirability for Chinese businesses to use their own currency for trade transactions.
The increased use of the renminbi has led to around RMB1.5 trillion (USD 231 billion) in offshore renminbi deposits, with the largest amounts in Hong Kong, Taiwan and Singapore, respectively. As more renminbi accumulate outside of China, investors will increase their demands for channels to repatriate funds back onshore.
China’s Cross-border Inter-bank Payment System (CIPS) seeks to address many of the existing problems facing cross-border renminbi payments. CIPS provides one-point entry by participants and a central location for clearing renminbi payments It allows participation by both onshore and offshore banks and provides direct access to China National Advanced Payment System (CNAPS). These features reduce the need for banks to navigate complicated payment pathways via offshore clearing hubs or through correspondent banks. This should result in faster payment processing and reduced costs for cross-border payments.
CIPS is a real time gross settlement system, meaning that banks settle payments immediately between each other on a gross rather than a net basis. This reduces credit risks that can arise in systems where payments are netted before settlement.
Payment messages sent within CIPS are written in both English and Chinese. This eliminates the necessity of translating messages into Chinese before they can be transmitted to CNAPS. CIPS utilizes the ISO20022 messaging standard, a widely used international messaging scheme for cash, securities, trade and foreign exchange transactions. CIPS will also utilize SWIFT bank identifier codes, rather than CNAPS clearing codes. These factors will allow CIPS to smoothly process payments flowing between offshore banks using SWIFT and mainland banks using CNAPS. As a result, cross-border payments made through CIPS should be able to achieve straight through processing.
CIPS operating hours will extend from 9:00am to 8:00pm Shanghai-time. This allows the system to overlap with business hours in Europe, Africa, Oceania, and Asia. Banks within these jurisdictions will be able to settle renminbi transactions during their business day. Though North and South America are not currently covered, the People’s Bank of China (PBoC) has stated that an expansion of CIPS’ operating hours is possible.
As of the launch in October 2015, CIPS had 19 direct participants and 176 indirect participants. The initial direct members of CIPS include 11 Chinese banks and the Chinese subsidiaries of 8 foreign banks. There is currently only one American bank that is a direct participant in the system, Citibank. Of the indirect participants, 38 were Chinese banks and 138 are foreign banks.
Details on plans for the future development of CIPS are sparse. Chinese officials have spoken of a Phase II for CIPS that will improve liquidity management and the efficiency of cross-border clearing and settlement. PBoC officials have also stated that Phase II will include longer operating hours, support for securities settlement and central counterparties.
The creation of CIPS is an important milestone on the renminbi’s road to becoming a major global currency. It has the potential to significantly improve the efficiency of cross-border payment transactions and increase liquidity in the offshore market. CIPS provides a more direct pathway for processing transactions, improving speed and lowering fees. Liquidity in the offshore renminbi market will be improved due to the large number of participating financial institutions and the direct link the system has with CNAPS.
The fact that the renminbi has progressed so quickly despite the underlying deficiencies in the payments infrastructure is a testament to the global demand for the currency. CIPS seeks to rectify these deficiencies and is likely to play a critical role in the renminbi’s future growth as an international payments currency.
The Clearing House Interbank Payments System (CHIPS) is a bank-owned, privately operated electronic payments system.
CHIPS is both a customer and a competitor of the Federal Reserve’s Fedwire service.
The average daily value of CHIPS transactions is about $1.2 trillion a day.
The Clearing House Interbank Payments System (CHIPS) is an electronic payments system that transfers funds and settles transactions in U. S. dollars. CHIPS enables banks to transfer and settle international payments more quickly by replacing official bank checks with electronic bookkeeping entries. As of January 2002, CHIPS had 59 members, including large U. S. banks and U. S. branches of foreign banks.
The New York Clearing House Association, a group of the largest New York City commercial banks, organized CHIPS in 1970 for eight of its members with Federal Reserve System membership. Participation in CHIPS expanded gradually in the 1970s and 1980s to include other commercial banks, Edge corporations, United States agencies and branches of foreign banks, and other financial institutions.
Until 1981, final settlement, or the actual movement of balances at the Federal Reserve, occurred on the morning after a transfer. Sharply rising settlement volumes raised concerns that next-day settlement exposed funds unduly to various overnight and over-weekend risks. In August 1981, the Federal Reserve agreed to provide same-day settlement to CHIPS participants through Fedwire, the Fed’s electronic funds and securities transfer network.
The number of CHIPS members has fallen from about 140 in the late 1980s, mainly because of consolidations in the banking industry. Membership might have fallen even more sharply if CHIPS had not acted in 1998 to eliminate a requirement that members maintain an office in New York City.
CHIPS is governed by a ten-member board consisting of senior officers of large banks that establishes rules and fees and admits and reevaluates participants. CHIPS handles about 240,000 transactions a day with a total dollar value of about $1.2 trillion. Historically, CHIPS specialized in settling the dollar portion of foreign exchange transactions, and CHIPS estimates that it handles 95 percent of all U. S. dollar payments moving between countries. However, the CHIPS focus has shifted to domestic business since CHIPS introduced intraday settlement in January 2001.
Until January 2001, CHIPS conducted all of its settling at the end of the business day. Now, however, CHIPS provides intraday payment finality through a real-time system. CHIPS settles small payments, which can be accommodated by the banks’ available balances, individually. Other payments are netted bilaterally (e. g., when Bank A has to pay $500 million to Bank B, and Bank B has to pay $500 million to Bank A), without any actual movement of funds between CHIPS participants.
Other payments are netted multilaterally. Suppose Bank A must pay $500 million to Bank B, and Bank A is also expecting to receive $500 million from Bank C. Without netting, Bank A would send $500 million to Bank B, and it would thus experience a decline in its available cash while it was awaiting the payment from Bank C.
Using the CHIPS netting system, however, Bank A submits its $500 million payment for Bank B to a payments queue, where it waits until Bank C’s offsetting payment is received. The effect of matching and netting these payments is that Bank A’s cash position is simultaneously reduced by its payment to Bank B and increased by receipt of its payment from Bank C. The overall effect on Bank A’s cash position is thus zero.
Payments for which no match can be found are not made until the end of the day, but each payment is final as soon as it is made. To facilitate the working of the intraday netting system, each participant pre-funds its CHIPS account by depositing a certain amount between 12:30 and 9:00 a. m. The size of this “security deposit,” which is recalculated weekly, is set by CHIPS based on the number and size of the bank’s recent CHIPS transactions, and none of it can be withdrawn during the day. At the end of the day, CHIPS uses these deposits to settle any still-unsettled transactions. Any participant that has a negative closing position at the end of the day (that is, it owes more than what it has in its security deposit) has 30 minutes to make up the difference. The 30-minute period is referred to as the final prefunding period. If any banks do not meet their final prefunding requirement, CHIPS settles as many of the remaining payments as possible with funds that are in the system, and any payments still unsettled must be settled outside of CHIPS.
Banks that have positive closing positions at the end of the day receive the amounts that they are due in the form of Fedwire payments. Because the ultimate CHIPS settlements are provided by Fedwire, CHIPS is a customer, as well as a competitor, of Fedwire. The vast majority of CHIPS members are also Fedwire participants, and the daily value of CHIPS transfers is about 80 percent of Fedwire’s non-securities transfers.
CHIPS has recently added electronic data interchange (EDI) capability to its payment message format. EDI allows participants to transmit business information (such as the purpose of a payment) along with their electronic funds transfers.
USA FedGlobal ACH Payments.
To facilitate this mapping process, the Federal Reserve Bank of Atlanta joined with U. S. and foreign depository institutions, international clearing and settlement service providers, and other interested parties to form the International Payments Framework Association (IPFA). The IPFA is a nonprofit membership association comprising 29 members representing Brazil, Canada, Europe, Japan, South Africa, the United Kingdom, and the United States whose purpose is to create a framework for bridging national formats for non-urgent international credit transfers. IPFA establishes rules, standards, and operating procedures for the exchange of these payments. The first effort by IPFA was to create rules that would facilitate a bridge between the IAT format for ACH credit transfers and the payment format, ISO 20022, which supports the several retail networks within the single euro payments area (also known as SEPA), under the SEPA credit transfer scheme. The next step underway is to leverage the framework created for the United States and SEPA in order to add other countries—such as Brazil, Canada, and South Africa—that want to exchange payments with the United States or SEPA ACH networks.
The Reserve Banks, through FedGlobal, launched their first commercial international ACH service with Canada in 1999.43 The service began as a pilot program for outbound commercial ACH transfers from the United States to Canada and became a production service in December 2001. Subsequent to the Canadian service, the Reserve Banks launched individual services to Europe, Mexico, Panama, and Latin America, covering 34 countries in total.44 In 2010, the Reserve Banks processed 1.3 million international ACH transfers—accounting for about 20 percent of the total volume of international payments being cleared and settled through the U. S. ACH network.45.
The Reserve Banks offer FedGlobal account-to-account services to Canada, Mexico, Panama, and 22 countries in Europe. The Reserve Banks offer FedGlobal A2R services to Argentina, Brazil, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Peru, and Uruguay.
Europe Cross Border LVPS.
Target 2 Euro1 SEPA CLS/SWIFT STEP 2 STEP 1.
EU EBA Clearing – EURO1, STEP1, STEP2, MyBank.
EBA Clearing is a provider of pan-European payment infrastructure with headquarters in Paris. It is wholly owned by its shareholders.
Its initial mission consisted in the operation of the clearing and settlement system for single euro transactions of high value EURO1, which the Euro Banking Association (EBA) had transferred to EBA Clearing for the launch of the system in 1999. Besides EURO1, EBA Clearing also owns and operates STEP1, a payment system for single euro payments for small and medium-sized banks, and STEP2, a Pan-European Automated Clearing House (PE-ACH) for euro retail payments. In March 2013, EBA CLEARING launched MyBank, an e-authorisation solution for online payments, which is geared at facilitating the growth of e-commerce across Europe.[1]
Both EURO1 and STEP2 have been identified as Systemically Important Payment Systems (SIPS) by the European Central Bank (ECB). EBA CLEARING is also planning to deliver a pan-European instant payments infrastructure solution in the course of 2017.
The organisation is based in Paris and has representative offices in Brussels, Frankfurt and Milan.
EURO1 is a RTGS-equivalent large-value payment system on a multilateral net basis, for single euro transactions of high priority and urgency, and primarily of large amount. EURO1 is owned and operated by EBA CLEARING. It is open to banks that have a registered address or branch in the European Union and fulfil a number of additional requirements. EURO1 is subject to German law (current account principle/single obligation structure) and is based on a messaging and IT infrastructure provided by SWIFT.
Since 2000, EBA CLEARING has been offering a payment service named STEP1 for small and medium-sized banks for single euro payments of high priority and urgency. The technical infrastructure is the same as that of the EURO1 system, both use the messaging and IT infrastructure of SWIFT.
STEP2 was put into operation in 2003 with Italian payment system provider SIA S. p.A. It processes mass payments in euro. STEP2 is a Pan-European Automated Clearing House (PE-ACH). This means that it complies with the principles set by the European Payments Council (EPC) for a PE-ACH Compliant Clearing and Settlement System.
From the beginning of Single Euro Payments Area (SEPA) on 28 January 2008, STEP2 has been offering SEPA Credit Transfer processing services across all SEPA countries through its SEPA Credit Transfer (SCT) Service. Since 2 November 2009, the transposition date of the Payment Services Directive, EBA CLEARING has been processing SEPA Direct Debits with its STEP2 SDD Core and STEP2 SEPA Direct Debit (“Business to Business”) Services. Through its SEPA Credit Transfer and Direct Debit offerings, STEP2 provides banks across Europe with one channel through which they can send and receive their SEPA Credit Transfers and SEPA Direct Debits. The STEP2 platform reaches nearly 100 percent of all banks that have signed the SCT and SDD Scheme Adherence Agreements of the European Payments Council (EPC).
MyBank is a pan-European e-authorisation solution for online payments that was launched in March 2013 by EBA CLEARING. The solution enables customers across Europe to pay for their online purchases via their regular online or mobile banking environment without having to disclose confidential data to the merchant or other third parties. The solution can be used for authorising SEPA Credit Transfers as well as the creation of SDD mandates. At a later stage, MyBank may also be used for transactions in currencies other than euro or for e-identity services.
Today, MyBank is owned and managed by PRETA S. A.S., a wholly owned subsidiary of EBA CLEARING.[2]
ECB identifies systemically important payments systems.
Four systems were identified: TARGET2, EURO1, STEP2-T and CORE(FR);
Goal is to ensure efficient management of risks and sound governance arrangements.
The European Central Bank (ECB) has identified four key payment systems that are now under the new ECB Regulation on oversight requirements for systemically important payment systems (SIPS), which entered into force on 12 August 2014. The regulation covers large-value and retail payment systems in the euro area operated by both central banks and private entities, and aims at ensuring efficient management of legal, credit, liquidity, operational, general business, custody, investment and other risks as well as sound governance arrangements, namely with a view towards promoting the smooth operation of safe and efficient payment systems in the euro area.
The four systems identified today are: TARGET2, operated by the Eurosystem; EURO1 and STEP2-T, operated by EBA CLEARING; and CORE(FR), operated by STET, a joint initiative of six major French banks. They were identified according to the combination of at least two of four main criteria, i. e. the value of payments settled, market share, cross-border relevance and provision of services to other infrastructures. The Eurosystem will review this list annually on the basis of updated statistical data.
From CLS Bank & the World of FX Settlement.
Starting my career as a trader on Wall Street, one of the big mysteries I had, was just how all these trades on the NYSE got executed and reported. Within the maze of specialist booths and flying paper, trades were being crossed and buyers and sellers were recognized. While the occasional errors occur, the wild system is highly efficient at reporting and settling trades.
In the world of OTC, settlement represents a larger factor, as participants are not bound by a central exchange system that insures against counterparty risk. As such, companies are on their own to ensure that trades are settled correctly with their counterparties, and an exchange of funds takes place.
In Forex Magnates’s Q1 2013 Industry Report, we took a look at the world of FX settlement and post-trade flow and researched CLS Bank and Traiana. We wanted to know just what they did, and how their products help FX players handle their settlement needs, create efficient markets, and lower overall transaction costs. In this first part, we focus on CLS Bank.
Launched in 2002, CLS Bank was created as a private sector initiative, to deliver and operate services to mitigate settlement risk in the FX market. Owned and operated by member institutions and working alongside central banks, CLS offers members the ability to settle trades within a central location, thus, providing efficiencies to FX markets.
To understand what CLS does, it is first important to know how settlement works. Settlement is the process in which the payment and securities of a transaction are delivered. Within the securities world, this occurs in a three day window. For example, if a trader buys 100 shares of IBM stock at $100/share, the broker has three days to collect the $10,000 from the client, transfer it to the seller, and collect the shares back for the client.
Within FX, settlement does not involve securities, but instead different currencies. Therefore, in a EUR/USD trade, the seller sends dollars while receiving euros. For OTC participants, one of the greatest worries is settlement risk, which occurs when a counterparty is unable or unwilling to provide either the payment or transfer of securities.
While a deal between two parties can easily be voided, thus limiting impact of a problematic counterparty, the greater concern is the systemic risk. As traders are simultaneously trading with multiple parties, if one party fails to honor a transaction, it can affect counterparties and could prevent them from having the funds and/or securities to settle other trades.
Jake Smith, Head of Communications at CLS, explained that “FX settlement risk is also known as ‘Herstatt Risk’ ”. The name is derived from the failure of a privately owned German bank in 1974. At the time, Bankhaus Herstatt had received delivery of Deutsche marks from US counterparty banks, but had been put into receivership before the corresponding dollars were sent, due to the time zone difference.” Smith explained that, while this occurred nearly 40 years ago, “due to volumes growing substantially since that time, settlement risk has grown significantly.”
To mitigate this risk, CLS was created. Currently, there are over 60 members, who represent some of the largest financial institutions from around the world. CLS provides a central settlement network for FX transactions between its members and their customers. To facilitate settlement, all members are required to have a single multi-currency account with CLS, supporting the 17 currencies that are settled by its system.
After conducting a trade, members send transactional details to CLS Bank, including trade details, counterparties, and settlement data. On the day of settlement, CLS Bank multilaterally nets all the instructions between the settlement members, calculating each institution’s pay-in obligations for the day, to ensure settlement of all their instructions on a payment-versus - payment basis. As settlement completes, pay-out of multi-laterally netted long balances will occur.
Example: GBP/USD = 1.50, EUR/USD = 1.25.
Member 1: Buys 1,000,000 GBP/USD from Member 2.
Member 2: Buys 1,000,000 EUR/USD from Member 3.
Member 3: Buys 1,000,000 GBP/USD from Member 1.
Member 1: Owes 1.5M USD & 1M GBP, collects 1.5M USD & 1M GBP.
Member 2: Owes 1.25M USD & 1M GBP, collects 1M EUR & 1.5 USD.
Member 3: Owes 1.5M USD & 1M EUR, collects 1.25M USD & 1M GBP.
CLS then multi-laterally nets the total obligations:
Member 1: Pays 0.0.
Member 2: Pays 1M GBP.
Member 3: Pays 0.25M USD & 1M EUR.
These obligations are funded into each member’s respective multi-currency account.
CLS then redistributes the obligations to the corresponding members.
Member 1: Receives 0.0.
Member 2: Receives 1M EUR & 0.25M USD.
Member 3: Receives 1M GBP.
By multi-laterally netting (also known as trade compression) payment obligations for each currency, CLS eliminates the need to fund trades on an individual basis per currency, resulting in approximately 96% netting efficiency. This increases to 99% with In/Out Swaps (an In/Out Swap is an intraday swap consisting of two equal and opposite FX transactions.)
That means, that for every $1 trillion of In/Out swaps settled, members need to provide funding for less than $10 billion, and $40 million for spot FX. With CLS handling nearly $5 trillion worth of daily settlements, the netting rates are a key element in allowing firms to grow their transactional volumes, while substantially reducing the amount of funding required. According to Smith, “CLS believes this safer and efficient process is one of the factors that led to the increase in FX volumes over the last 10 years.”
Smith explained that CLS provides a number of benefits to the FX industry, including, settlement risk mitigation, multi-lateral netting, operational and IT efficiencies, business growth opportunities, and the ability to develop industry solutions best practices, common standards and rules that benefit the FX market.
Within settlement risk mitigation also comes credit recognition. By being CLS members, credit departments have a greater understanding of each other and the counterparty risk. This allows firms to allocate less risk between trades to other members. For example, while a bank may decide to trade up to $10 billion with another member, they are more likely to limit their trade exposure to non-members.
In terms of operational efficiencies, a key factor is with regard to CLS’s one rule and oversight committee. Having one set of guidelines for members and central banks, provides all participants with a clearer understanding of their counterparties. When adding a new currency, the corresponding central bank needs to follow the standardized guidelines. These rules provide protection for members who benefit from the increased transparency a participating central bank will need to follow.
In July 2012, the critical role that CLS plays in global financial markets was recognised by the US Department of the Treasury’s Financial Stability Oversight Council, when it designated CLS as a systemically important Financial Market Utility (FMU). CLS’s importance was highlighted further in November 2012, with the announcement of the US Treasury Department’s exemption of FX swaps and forwards from the clearing requirements required for many financial products under the Dodd-Frank legislation. The role that CLS plays in the mitigation of FX settlement risk was believed to be a contributing factor towards that decision.
CLS’s increased investment in technology, has enabled it to materially expand peak capacity as it updated core technologies, to meet the elevated standards required of a systemically important FMU. The result is that CLS can now accommodate trade matching volumes of up to five times the average daily volume, and process 20 per cent of a peak day’s volume in a one hour period.
Furthermore, CLS has put in place a flexible technology infrastructure, which enables “capacity on demand”, supporting future software upgrades to be delivered to increase capacity in a matter of days and weeks. This structure, allows CLS to pay for technology only when required, while fulfilling obligations to the market to settle all eligible FX settlement instructions.
The need to build capacity was demonstrated on January 22, 2013, when CLS settled more than 2.6 million instructions, 18 per cent more than the previous high, recorded on 19 September, 2012.
Looking to the future, as emerging markets grow, CLS has received interest from settlement members to include additional currencies. As such, CLS has been evaluating the addition of the Brazilian real, Chilean peso, Chinese renminbi, Russian ruble and Thai baht, amongst others.
Another area where CLS is extending its services is in same day settlement. A significant percentage of USD/CAD trades are intra-day and are not currently included in CLS settlement, due to the time of day. CLS is developing a same day settlement service between US and Canadian dollars to address this settlement risk, which has a proposed launch date in late 2013.
From The complexity of correspondent banking.
Correspondent Banking Network.
Correspondent banking, which can be broadly defined as the provision of banking services by one bank (the “correspondent bank”) to another bank (the “respondent bank”), is essential for customer payments, especially across borders, and for the access of banks themselves to foreign financial systems. The ability to make and receive international payments via correspondent banking is vital for businesses and individuals, and for the G20’s goal of strong, sustainable, balanced growth. At the extreme, if an individual bank loses access to correspondent banking services, this may affect its viability and if a country’s banks more generally face restricted access then it may affect the functioning of the local banking system. In addition, loss of correspondent banking services can create financial exclusion, particularly where it affects flows such as remittances which are a key source of funds for people in many developing countries.
Banks have traditionally maintained broad networks of correspondent banking relationships, but there are growing indications that this situation might be changing. In particular, some banks providing these services are reducing the number of relationships they maintain and are establishing few new ones. The impact of this trend is uneven across jurisdictions and banks. As a result, some respondent banks are likely to maintain relationships, whereas others might risk being cut off from international payment networks. This implies a threat that cross-border payment networks might fragment and that the range of available options for these transactions could narrow.
Rising costs and uncertainty about how far customer due diligence should go in order to ensure regulatory compliance (ie to what extent banks need to know their customers’ customers – the so-called “KYCC”-) are cited by banks as among the main reasons for cutting back their correspondent relationships. To avoid penalties and the related reputational damage correspondent banks have developed an increased sensitivity to the risks associated with correspondent banking. As a consequence, they have cut back services for respondent banks that (i) do not generate sufficient volumes to overcome compliance costs; (ii) are located in jurisdictions perceived as very risky; or (iii) provide payment services to customers about which the necessary information for an adequate risk assessment is not available.
The regulatory framework, and in particular the AML/CFT (Anti-Money Laundering/Counter Financing of Terrorism) requirements and the related implementing legislation and regulations in different jurisdictions, are taken as given in this report. It is acknowledged that these requirements, as agreed by the competent authorities, along with strict implementation, are necessary to prevent and detect criminal activities and ensure a healthy financial system.
From Redefining the Landscape of Payment Systems.
Regional Integration of Payment Systems.
Cross-border and cross-currency commercial and financial payments have traditionally been made through regional and global correspondent banking networks. Correspondent banking networks typically involve multiple levels of intermediation to link national payment systems. Similar arrangements exist for cross-border securities and other market-based transactions. Such decentralized, highly-tiered cross-border arrangements for payment and securities transfer, clearing and settlement involve substantial liquidity, operating and user costs. Moreover, the services provided are often too slow and unreliable for the rising volume of payments associated with closer regional commercial and financial ties. Consequently, more tightly organized and integrated regional and even inter-regional payment and securities infrastructures are developing as a result of integration initiatives in the African, Asian and Latin American regions, among others. The discussions around the theme of regional integration of systems extended even further to the need for harmonized development of central bank payment system and monetary policies.
Integration in Wholesale Systems.
The regional integration of national payment systems directly links the large-value payment systems of the participating countries. The link-up is through a distributed payment communications network involving either bilateral connectivity and system-to-system intra-regional payment settlement or connectivity to a central hub operating an intra-regional clearing and settlement facility. With large-value payment systems typically operated by national central banks, the distributed connectivity model of a regional payment system can substitute for the private correspondent banking network. The correspondent central banking arrangement concentrates intra-regional payments into a single central bank correspondent that participates in a network having more standardized service levels and agreements than the private system (i. e. correspondent banking). Over the medium-term, relative liquidity, operating and user costs should generally be lower and intra-regional payment settlement faster and more predictable than in the private system. A centralized model with a regional settlement bank can facilitate even greater standardization and more effective settlement risk control and, given a common settlement currency, permits multilateral netting that can lower liquidity costs even more as payment values and volumes rise.
The successful regional integration of national large-value payment systems does, however, require several pre-conditions. In addition to the obvious business case, the most critical pre-conditions are the harmonization of key institutional and structural elements in the national systems of the member countries and a sustainable commitment to the regional payment system, and the regional commercial and financial initiatives that underpin it. Experiences cited in a number of regional payment system initiatives indicate that unreasonable expectations of immediate pay-offs from integration and inadequate harmonization of key institutional elements during network expansion, such as those involving sound legal and oversight requirements, cause commitment to the project to waver and can sometimes cause the initiative to collapse. Organized and focused collaboration among all the key stakeholders and cooperation among the overseers of the national payment systems of the member countries is considered critical to sustaining commitment to the regional integration program.
Although several national securities depositories and securities settlement systems have developed bilateral system-to-system links in recent years, only a few have begun to integrate regionally or inter-regionally into an organized multilateral system. While the most developed cross-border systems are within the Eurozone, others have begun to develop elsewhere, as in the South African Development Community. The discussion concerning the role of CCPs in securities and derivatives settlement extended to consideration of regional, and even global, developments.
Integration of Retail Payment Systems.
Aside from the major global card payment systems, which are expanding their products and services into new payment applications for cross-border retail payments, there are only a few bilateral and multilateral system-to-system links that facilitate the clearing and settling of cross-border payments. Correspondent banking arrangements, even for the ultimate settlement of cross-border card payments, are still the primary network arrangements for the ultimate settlement of cross-border retail payments. The regional integration of large-value payment systems, in conjunction with the integration of retail and large-value payment systems at the national level, has spawned some initiatives for the regional integration of national retail payment systems. The SEPA (Single European Payment Area) initiative is perhaps the most ambitious of these integration initiatives. Triggered by policy action and driven by industry initiatives, SEPA is aimed at creating a single integrated market for retail payment instruments and services throughout the Eurozone. The most critical challenges faced by the SEPA initiative have been the set-up of public and private sector collaboration mechanisms for decision-making, user support from public sector administrations, and the harmonization of national legal barriers. SEPA-compliant credit and debit transfers are now in place and work is proceeding on the introduction of SEPA-compliant card payments and on the development of SEPA-based online and mobile payment channels.
Transnational Payment Systems.
While once there were only domestic payment channels in each country, we have witnessed the emergence of transnational systems such as TARGET, CLS (Continuous Linked Settlement), the Federal Reserve’s International ACH Project, known as FedACH International and the proposed pan-European automated clearinghouse known as PE-ACH. On the other end of the spectrum, card systems such as those operated by Visa and MasterCard are truly global in scope and have been expanding from consumer based transactions into commercial payments for more than a decade. Transnational systems have traditionally focused on providing payments within a region or to a small number of countries and usually support a single currency. Although none of these systems are yet global in scope, it is likely they will continue to expand their coverage to additional countries and currencies. Networks such as Visa and MasterCard are examples of global payment systems that also support multiple currencies, though they are primarily used for retail payments and ad hoc/T&E commercial transactions. Recently, in countries like Switzerland and Hong Kong13, new arrangements have been developed for the settlement of local payments in foreign currency. These arrangements neither fit perfectly in the traditional category of “correspondent banking” or in that of “payment systems”. The main common characteristic of these arrangements or systems is that they do not settle in central bank money but across accounts held with a commercial bank and that they are based on clearly defined and transparent rules for payment activities. Compared to traditional correspondent banking, these new solutions are standardized and settle payments in real time with continuous finality. In 1999, Swiss financial institutions established a cross-border solution in order to facilitate their cash management in euros. This solution involves a fully licensed bank in Germany, Swiss Euro Clearing Bank (SECB). To process euro transactions, SECB uses the euroSIC platform in Switzerland, which is often referred to as the euro payment system of Switzerland. EuroSIC is a replication of the Swiss franc RTGS system, Swiss Interbank Clearing (SIC). SIC and euroSIC are operated by Swiss Interbank Clearing AG. SECB is the settlement institution and shares the role of settlement agent with the operator SIC AG. SECB is also the liquidity provider in euroSIC. It extends intraday and overnight credit to the participants of euroSIC against collateral. SECB provides a link to the euro area, as it is a direct participant in RTGSPLUS through which access to TARGET is established. In Hong Kong, the U. S. dollar and euro clearing systems, USD CHATS (Clearing House Automated Transfer System) and Euro CHATS, were introduced in 2000 and 2003, respectively. They enhance the safety and efficiency of settling these foreign currencies in the local time zone. These systems are almost exact replicas of the Hong Kong dollar RTGS system (HKD CHATS). The key functions of both systems are to enable settlement of foreign exchange transactions between HK dollars, US dollars and euros in their respective currencies through a linkage with the Central Moneymarkets Unit (CMU) in Hong Kong.
The Hong Kong Monetary Authority has appointed the Hong Kong and Shanghai Banking Corporation as the settlement institution for USD CHATS and Standard Chartered Bank (Hong Kong) Limited as the settlement institution for Euro CHATS. Both institutions provide intraday liquidity to the direct participating banks by means of repos as well as overdraft facilities. One of the key benefits of both the US dollar and euro systems is the same day clearing of transactions. Also driving transnational systems is the implementation of “straight through processing (STP)” standards for transfers between banks as well as between banks and customers. To ensure simultaneous and dependable deliveries, payment-versus-payment (PVP), delivery-versus-payment (DVP), and delivery-versus-delivery (DVD) processes have also been established. The growth in transnational systems can improve the efficiency of cross-border payments by reducing clearing and settlement times, minimizing float. Better visibility of funds flows supports improved cash forecasting. Finally, standardized formats will reduce costly errors and repairs.
Intra bank Payments Networks – Multinational Banks.
Mergers and acquisitions have been the single biggest force reshaping the global payments landscape over the past two decades. The most recent round of consolidation has left a disparity between large and small never before seen. For example, we have witnessed the emergence of mega banks such as the combining of Bank of America and Nations Bank, as well as JP Morgan Chase combining Chase Manhattan Bank, Manufacturers Hanover Bank, Morgan Guaranty Trust and Bank One. In a scale-driven, technology-intensive business like payments, the emergence of true mega-players may lead to markedly different competitive dynamics. Acting as their own transnational systems, large international banks such as JP Morgan Chase, Citibank, Bank of America, and Hongkong Shanghai Banking Corporation operate their own internal global payments networks. Through these, they can route payments to destinations in different countries. Such internal networks do not necessarily differentiate between domestic and cross-border payments as these flows are all within the bank. The trend toward consolidation in the banking sector, both globally and in domestic markets, exerts influence on payment systems. Increased concentration of payment flows may have important credit, liquidity and operational risk implications. For example, the credit exposures that arise within a payments system that does not achieve intraday finality are likely to become concentrated on a smaller number of banks. Operational problems experienced by a single large bank could have significant repercussions for other participants in the system. A concentration of payment flows in commercial banks has emerged to reflect the increasing role that modern commercial banks, especially large global banks, have played in the payment systems around the world. The volumes and values settling across their books are, in some countries, quite substantial. Such traffic has often been accompanied by increased formalization of the correspondent relations within, as well as across, national boundaries. Banks that achieve global economies of scale can further drive down per transaction costs and derive higher revenues by keeping payments within their own networks. For global corporations, it has allowed them to match their global needs with a handful of banks rather than managing a large number of local relationships.
From The Inefficiencies of Cross-Border Payments: How Current Forces Are Shaping the Future.
A survey of major systems facilitating cross-border payments.
American Express : is a publicly traded company that issues charge and credit card products both directly and through nearly 100 financial institutions around the world. American Express had $484 billion in global sales in 2005.15.
CHAPS (Clearing House Automated Payment System) : CHAPS, established in 1984, is the United Kingdom’s high-value payment system, consisting of two systems: CHAPS Sterling and CHAPS Euro, which provide settlement facilities for sterling and euro payments, respectively. Over a dozen large banks and building societies are “direct” or settlement members, while there are also over 400 “indirect” members – typically smaller banks and building societies – who have access to the system through a settlement member.
CHIPS (Clearing House Interbank Payment System) : CHIPS is a bank-owned, privately operated, real-time, multilateral electronic payments system that transfers funds and settles transactions in U. S. dollars. CHIPS began operations in 1970 with 9 participating banks and, as of mid 2006, it processes about 300,000 payments a day with an average daily amount of $1.5 trillion. It currently has 46 participants from 19 countries around the world, including large U. S. banks and U. S. branches of foreign banks. The payments transferred over CHIPS are often related to international interbank transactions, including the payments resulting from foreign currency transactions (such as spot and currency swap contracts) and Euro placements and returns.
CLS (Continuous Linked Settlement) : The CLS system is the private sector response to a G-10 strategy to reduce foreign exchange settlement risk. CLS was founded in 1997 to create the first global settlement system, eliminating settlement risk in the foreign exchange market. Formed in response to regulatory concern related to the temporal and systemic risks (Herstatt risk) associated with foreign exchange transactions, CLS simultaneously settles both sides of foreign exchange trades using a multi-currency payment-versus-payment (PVP) mechanism. CLS is a unique real-time process enabling simultaneous foreign exchange settlement across the globe, eliminating the settlement risk caused by delays arising from time-zone differences. CLS settles well over $1 trillion per day, accounting for a substantial majority of cross-currency transactions across the globe.
Eurogiro : owned by 16 banks/postal financial service companies, is an electronic payment network for postal and giro (postbank) organizations that exchange cross-border credit transfers and cash-on-delivery orders. Established in 1989, Eurogiro has more than 40 participants from 37 countries in Europe, Asia, Africa, South America and the U. S. Members act as correspondents for one another and hold reciprocal accounts with each other to execute payments.
EURO1 : a private sector-owned high-value payment system, operated by the EBA Clearing Company for cross-border and domestic transactions in euro between banks operating in the European Union, and it is the largest of Europe’s four large-value, net settlement systems, processing on average 170,000 payments a day with a total value of about €170 billion. Launched in 1998, EURO1 was developed to provide an efficient, secure and cost-effective infrastructure for large-value payments in the new single currency environment of the EU. EURO1 is based on state-of-art messaging infrastructure and computing facilities supplied by SWIFT.
FedACH International Services : This international gateway arrangement service is owned and operated by the Federal Reserve System. Currently, the Federal Reserve Banks offer a suite of FedACH International Services as part of FedACH Services and provide U. S.- originating depository financial institutions with the ability to send international non-time-critical payments via the same process used to send domestic transactions for many decades. FedACH International Services offer an integrated, uncomplicated method to ensure straight-through processing (STP) of cross-border transactions, using NACHA formats that are supported by most software vendors.
Fedwire (Federal Reserve Wire Network) : This is a high-speed electronic network through which the U. S. Federal Reserve provides the Fedwire Funds Service, the Fedwire Securities Service, and the National Settlement Service. The Fedwire Funds Service provides an RTGS system in which more than 9,500 participants initiate funds transfers that are immediate, final, and irrevocable when processed.
LVTS (Large Value Transfer System) : The fully electronic LVTS, Canada’s real-time gross settlement system, became operational in early 1999. As Canada’s wire payment mechanism, it facilitates the electronic transfer of Canadian dollar payments across the country in real-time. Canada’s national payments system has been operated by the Canadian Payments Association (CPA) since 1980.
MasterCard : is a publicly-traded company that operates a global payment system. In addition to the MasterCard brand, the Maestro and Cirrus brands are also part of the company. MasterCard branded cards generated $1.7 trillion in global sales in 2005.16.
RTGSPLUS : is the German Bundesbank’s new liquidity-saving RTGS, which became operational in November 2001. It combines the risk-reducing benefits of gross settlement of the former German RTGS system known as the Euro Link System (ELS) with the advantages of liquidity-saving processing of the former hybrid system known as Euro Access Frankfurt (EAF).
SWIFT (Society for Worldwide Interbank Financial Telecommunications) : SWIFT is an industry-owned limited liability cooperative that supplies secure messaging services and interface software for financial transactions to more than 7,650 banks, securities brokers and investment managers in more than 200 countries.
SWIFT payment messages are processed by the Financial Information Network (FIN), which operates on a secure IP network called SWIFTNet. SWIFT is integrating into the ACH market segment as a payment service provider via its FileAct messaging service. ACH networks such as the EBA Clearing Company and the South African Automated Clearing Bureau are already using SWIFT’s messaging platform.
STEPS (Straight Through Euro Payment System) : The STEPS program was launched by the Euro Banking Association (EBA) to offer a full range of euro payments across Europe. STEPS has evolved into two systems aimed at accommodating a broad base of processing needs within the European Union: STEP1 (a pan-European system designed to process single cross-border, low-value retail payments) and STEP2 (a pan-European ACH for bulk/high volume, low-value, cross-border and domestic interbank payments).
STEP2 : a pan-European ACH solution, is a joint venture between the EBA and Italy’s ACH operator SIA. STEP2 processes high-volume, commercial and retail payment orders sent to the system via files through a secure network. Characteristics of payment orders that are processed via STEP2 are commercial and retail transfers in euro that are formatted to agreed technical standards. Accessible through SWIFTNet, STEP2 offers payment processing and settlement in euro.
TARGET (Trans-European Automated Real-time Gross Settlement Express Transfer) : The Eurosystem, which comprises the European Central Bank (ECB) and the national central banks (NCBs) of the 12 EU member states which have adopted the euro, has created TARGET for large-value payments in euro. The TARGET system is a “system of systems” composed of the national payment systems of 16 of 25 countries that are currently members of the EU, the ECB payment mechanism (EPM) and an interlinking mechanism that enables the processing of payments between the linked systems.
TARGET2 : The current structure of TARGET was decided on in 1994 and was based on the principles of minimum harmonization and interconnection of existing infrastructures. This was the best way of ensuring that the system would be operational from the very start of the European Economic and Monetary Union (EMU) in 1999. TARGET2 is an enhanced version of the current TARGET incorporating technical consolidation, a single system-wide pricing structure for domestic and cross-border payments, a harmonized service level, and the system-wide pooling of available intraday liquidity. The go-live date for TARGET2 is set for November 19, 2007, with gradual migration to the new system by the member states in four waves. All central banks participating in TARGET2, together with their national banking communities, are expected to be using the new system by May 2008.
Visa : is a private, membership association jointly owned by more than 20,000 member financial institutions around the world. Visa develops common standards and specifications to facilitate commerce and provide member financial institutions with the global payment platform to support transactions on 1.46 billion cards that generate more than $4.3 trillion in global transactions in over 160 countries.17.
Voca : was formed in 1968 and was known as the “Bankers Automated Clearing System” or BACS which is similar to ACH in the US. BACS changed its name to Voca in 2004. Voca is one of a number of domestic ACH-type systems in Europe and owns the BACS infrastructure that processes the majority of non-RTGS, non-card, electronic credit and debit payments for B2C, C2B and B2B in the UK. VOCA performed 5 billion transactions in 2005. 28.
China’s Central Bank RMB Currency Swap Lines.
China’s Offshore RMB Clearing Centers.
Explaining cross-border large-value payment flows: Evidence from TARGET and EURO1 data.
Simonetta Rosati, Stefania Secola.
The Inefficiencies of Cross-Border Payments: How Current Forces Are Shaping the Future.
Written by Yoon S. Park, PHD & DBA, George Washington University.
There Is No Such Thing As An International Wire.
by ERIN MCCUNE on MAY 15, 2014.
The Elements of the Global Network for Large-Value Funds Transfers.
Cross-border RMB Settlements.
China launch of renminbi payments system reflects Swift spying concerns.
Possible RMB – Clearing model for the city of Frankfurt.
RMB Initiative Frankfurt Frankfurt, December 2013.
Working Group on the establishment of an RMB clearing house.
CIPS and the International Role of the Renminbi.
January 27, 2016.
By Nicholas Borst.
Correspondent banking July 2016.
Rethinking correspondent banking.
The complexity of correspondent banking.
CLS Bank & the World of FX Settlement.
Foreign exchange trading and settlement: Past and present.
by John W. McPartland, financial markets consultant.
Chicago Fed Letter 2006.
Settlement risk in foreign exchange markets and CLS Bank.
Cross-Border Payments Perspectives.
Research conducted by Glenbrook Partners.
Redefining the Landscape of Payment Systems.
Summary of Proceedings of the World Bank Conference.
Report to the Congress on the Use of the Automated Clearinghouse System for Remittance Transfers to Foreign Countries.
ESTABLISHING AN INTEGRATED PAYMENT SYSTEM.
(REAL-TIME GROSS SETTLEMENT) IN ASEAN.
A Proposal for a Cross-Border Mechanism to Support the AEC 2015.
PAYMENT SYSTEMS TO FACILITATE SOUTH ASIAN INTRA - REGIONAL TRADE.
Implementing Cross-border Payment, Clearing and Settlement Systems: Lessons from the Southern African Development Community.
Albert Mutonga Matongela.
The emerging single market in South-East Asia.
Payment System Interoperability and Oversight: The International Dimension.
Regional Monetary Co-operation in the Developing World Taking Stock.
Barbara Fritz / Laurissa Mühlich.
FRAMING A NEW ASIAN FINANCIAL ARCHITECTURE.
Creating an Association of Southeast Asian Nations Payment System: Policy and Regulatory Issues.
Payments in ASEAN post AEC.
Regional Integration and Economic Development in South Asia.
Sultan Hafeez Rahman.
Towards South Asia Economic Union.
Proceedings of the.
7th South Asia Economic Summit (SAES)
5-7 November 2014 New Delhi, India.
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Forrester and System Dynamics January 9, 2017 Increasing Returns, Path Dependence, Circular and Cumulative Causation in Economics January 7, 2017 Economic Growth Theories – Orthodox and Heterodox January 4, 2017 Long Wave Economic Cycles Theory December 30, 2016 Mergers and Acquisitions – Long Term Trends and Waves December 28, 2016 Business Investments and Low Interest Rates December 22, 2016 The Decline in Long Term Real Interest Rates December 19, 2016 Low Interest Rates and Banks Profitability: Update – December 2016 December 15, 2016 Hierarchical Planning: Integration of Strategy, Planning, Scheduling, and Execution December 4, 2016 External Balance sheets of Nations November 29, 2016 Low Interest Rates and International Capital Flows November 23, 2016 Networks and Hierarchies November 12, 2016 Systems View of Life: A Synthesis by Fritjof Capra October 27, 2016 Milankovitch Cycles: Astronomical Theory of Climate Change and Ice Ages October 2, 2016 Process Physics, Process Philosophy September 17, 2016 Shape of the Universe September 4, 2016 Myth of Invariance: Sound, Music, and Recurrent Events and Structures August 26, 2016 Sounds True: Speech, Language, and Communication August 19, 2016 Mind, Consciousness and Quantum Entanglement August 12, 2016 Society as Communication: Social Systems Theory of Niklas Luhmann August 8, 2016 Geometry of Consciousness August 5, 2016 Art of Long View: Future, Uncertainty and Scenario Planning July 31, 2016 Reflexivity, Recursion, and Self Reference July 27, 2016 Truth, Beauty, and Goodness: Integral Theory of Ken Wilber July 24, 2016 Semiotics, Bio-Semiotics and Cyber Semiotics July 22, 2016 Autocatalysis, Autopoiesis and Relational Biology July 19, 2016 Systems and Organizational Cybernetics July 17, 2016 Micro Motives, Macro Behavior: Agent Based Modeling in Economics July 15, 2016 Feedback Thought in Economics and Finance July 13, 2016 Repo Chains and Financial Instability July 11, 2016 Multiplex Financial Networks July 11, 2016 Glimpses of Ancient Indian Mathematics July 9, 2016 Bring back M3 – Monetary Aggregate July 8, 2016 Increasing Returns and Path Dependence in Economics July 7, 2016 Economics of Money, Credit and Debt July 6, 2016 Boundaries and Relational Sociology July 5, 2016 George Dantzig and History of Linear Programming July 3, 2016 Phillips Machine: Hydraulic Flows and Macroeconomics July 1, 2016 Monetary Circuit Theory June 30, 2016 Morris Copeland and Flow of Funds accounts June 30, 2016 Financial Social Accounting Matrix June 29, 2016 Classical roots of Interdependence in Economics June 28, 2016 Stock-Flow Consistent Modeling June 26, 2016 Foundations of Balance Sheet Economics June 24, 2016 Contagion in Financial (Balance sheets) Networks June 22, 2016 Interdependence in Payment and Settlement Systems June 19, 2016 Evolution of Banks Complexity June 17, 2016 Economics of Broker-Dealer Banks June 17, 2016 Shadow Banking June 13, 2016 Low Interest Rates and Risk taking channel of Monetary Policy June 4, 2016 Funding Strategies of Banks June 2, 2016 Non Interest Income of Banks: Diversification and Consolidation May 31, 2016 Impact of Low Interest Rates on Bank’s Profitability May 22, 2016.
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Regional Trading Blocs and Economic Integration.
Regional Trading Blocs and Economic Integration.
From Asia’s Rise in the New World Trade Order.
From What is Regional Trade Blocs or Free Trade Agreements?
As trade integration across countries is intensifying, we hear more and more about Free Trade Agreements (FTAs) and Regional Trade Blocs (RTBs). As their name suggests these RTBs/FTAs are arrangements aimed for faster trade liberalisation at regional levels.
Countries are convinced that trade is an engine of growth and they are searching for arrangements that promote trade.
The WTO that contains 162 countries is the most popular one; a truly multilateral forum for trade liberalisation. But the history of WTO led trade liberalisation shows that the organisation is facing difficulty in bringing further trade liberalisation because of conflicting interest among large number of countries.
This has led to interest in trade liberalisation within a limited number of countries that may be regionally close together. These regional trade promoting arrangements advocate more tariff cuts and removal of other restrictions within the group while maintaining restrictions against the rest of the world.
Though many regional trade agreements like the EU, NAFTA and ASEAN were established before or around the time of WTO’s formation, there is mushrooming of RTBs in recent years. Recently formed Trans Pacific Partnership (TPP) shows this increasing affinity towards RTBs. Many RTBs like the TPP would like to make advanced level trade liberalisation and hence they are not satisfied with the slow pace of trade liberalisation within the WTO.
What are Regional Trade Blocs (RTBs)?
Regional Trade Blocs or Regional Trade Agreements (or Free Trade Agreements) are a type of regional intergovernmental arrangement, where the participating countries agree to reduce or eliminate barriers to trade like tariffs and non-tariff barriers. The RTBs are thus historically known for promoting trade within a region by reducing or eliminating tariff among the member countries.
Over the last few decades, international trade liberalisations are taking place in a serious manner through the formation of RTBs. They are getting wide attention because of many important international developments. First, now the world is trying hard to escape from the ongoing great recession phase. Second is the failure of the WTO to take further liberalisation measures on the trade liberalisation front.
The EU, NAFTA, ASEAN, SAFTA etc are all examples for regional integration. The triad of North America, Western Europe, and Asia Pacific have the most successful trade blocs. Recently signed Trans Pacific Partnership is a powerful RTB. Similarly, another one called RCEP is in negotiation round. India has signed an FTA with the ASEAN in 2009. Simultaneously, the country has signed many bilateral FTAs.
All regional trade blocs don’t have the same degree of trade liberalisation. They may differ in terms of the extent of tariff cutting, coverage of goods and services, treatment of cross border investment among them, agreement on movement of labour etc.
The simple form of regional trade bloc is the Free Trade Area . The Free Trade Area is a type of trade bloc, a designated group of countries that have agreed to eliminate tariffs, quotas and preferences on most (if not all)goods and services traded between them.
From the lowest to the highest, regional trade integration may vary from just tariff reduction arrangement to adoption of a single currency. The most common type of regional trade bloc is the free trade agreement where the members abolish tariffs within the region. Following are the main types of regional economic integrations.
Preferential trading union: Here, two or more countries form a trading club or a union and reduce tariffs on imports of each other ie, when they exchange tariff preferences and concessions.
Free trade union or association : Member countries abolish all tariffs within the union, but maintain their individual tariffs against the rest of the world.
Customs union : countries abolish all tariffs within and adopt a common external tariff against the rest of the world.
Common market : in addition to the customs union, unrestricted movement of all factors of production including labour between the member countries. In the case of European Common Market, once a visa is obtained one can get employed in France or Germany or in any other member country with limited restrictions.
Economic union : The Economic Union is the highest form of economic co-operation. In addition to the common market, there is common currency, common fiscal and monetary policies and exchange rate policies etc. European Union is the example for an Economic Union. Under the European Monetary Union, there is only one currency - the Euro.
At present, out of the total regional trade arrangements FTAs are the most common, accounting for nearly 90 per cent.
From Regionalism in a globalizing world: an Asia-Pacific perspective.
From Asia’s Rise in the New World Trade Order.
From The world’s free trade areas – and all you need to know about them.
International trade is a driving force behind economic growth, and two so-called “mega-regional” trade deals are dominating public debate on the issue: the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP).
But there are around 420 regional trade agreements already in force around the world, according to the World Trade Organization. Although not all are free trade agreements (FTAs), they still shape global trade as we know it.
What exactly are free trade areas?
The OECD defines a free trade area as a group of “countries within which tariffs and non-tariff trade barriers between the members are generally abolished but with no common trade policy toward non-members”.
The free movement of goods and services, both in the sense of geography and price, is the foundation of these trading agreements. However, tariffs are not necessarily completely abolished for all products.
Which are the world’s major free trade areas?
The North American Free Trade Agreement (NAFTA)
Free trade between the three member nations, Canada, the US and Mexico, has been in place since January 1994. Although tariffs weren’t fully abolished until 2008, by 2014 total trilateral merchandise trade exceeded US$1.12 trillion.
According to the US government, trade with Canada and Mexico supports more than 140,000 small and medium-size businesses and over 3 million jobs in the US. Gains in Canada are reportedly even higher, with 4.7 million new jobs added since 1993. The country is also the largest exporter of goods to the US.
However, the Council on Foreign Relations suggests that the impact on Mexico is harder to assess. Per capita income has not risen as fast as expected; nor has it slowed Mexican emigration to the US. However, farm exports to the US have tripled since 1994, and the cost of goods in Mexico has declined. The cost of basic household goods has halved since NAFTA came into force, according to estimates by GEA, a Mexican economic consulting firm.
Association of Southeast Asian Nations Free Trade Area (AFTA)
The AFTA was signed in January 1992 in Singapore. The original members were Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand. Four countries have subsequently joined: Vietnam, Laos, Myanmar and Cambodia.
The bloc has largely removed all export and import duties on items traded between the nations. It has also entered into agreements with a number of other nations, including China, eliminating tariffs on around 90% of imported goods.
The AFTA nations had a combined GDP of US$2.3 trillion in 2012, and they’re home to 600 million people. The agreement has therefore helped to dramatically reduce the cost of trade for a huge number of businesses and people.
Southern Common Market (MERCOSUR)
Although MERCOSUR was envisaged as a Latin American single market, enabling the free movement of people, goods, capitals and services, this vision is yet to become reality. Internal disputes have slowed progress towards removing tariffs and the free movement of people and goods.
But MERCOSUR is still one of the world’s leading economic blocs, and has a major influence on South American trade and the global economy.
Common Market of Eastern and Southern Africa (COMESA)
Formed in December 1994, the organization aims to develop natural and human resources to benefit the region’s population. Its primary focus, according to the United Nations, is to establish a large economic and unit to overcome barriers to trade.
With 19 member states, and an annual export bill in excess of $80 billion, the organization is a significant market place, both within Africa and globally.
COMESA utlimately aims to remove all barriers to intra-regional trade, starting with preferential tariffs and working towards a tariff-free common market and economic union.
What about the European Union?
The EU is a single market, which is similar to a free trade area in that it has no tariffs, quotas or taxes on trade; but a single market allows the free movement of goods, services, capital and people.
The EU strives to remove non-tariff barriers to trade by applying the same rules and regulations to all of its member states. The region-wide regulations on everything from working hours to packaging are an attempt to create a level playing field. This is not necessarily the case in a free trade area.
The creation of the single market was a slow process. In 1957, the Treaty of Rome established the European Economic Community (EEC) or Common Market. However, it was not until 1986 that the Single European Act was signed. This treaty formed the basis of the single market as we know it, as it aimed to establish the free-flow of trade across EU borders. By 1993 this process was largely complete, although work on a single market for services is still ongoing.
Today, the EU is the world’s largest economy, and the biggest exporter and importer. The EU itself has free trade agreements with other nations, including South Korea, Mexico and South Africa.
What about the TPP and TTIP?
Once fully ratified, the Trans-Pacific Partnership is set to become the world’s largest trade agreement. The TPP already covers 40% of global GDP, and trade between member nations is already significant.
However, by removing tariffs and other barriers to trade, the agreement hopes to further develop economic ties and boost economic growth.
The Transatlantic Trade and Investment Partnership is a deal currently being negotiated between the EU and the US. If reached, it would itself become the world’s largest trade agreement – covering 45% of global GDP.
Like the TPP, it aims to cut tariffs and regulatory barriers to trade. Among these is the removal of customs duties, according to the EU’s negotiation factsheet.
The Center for Economic Policy Research has estimated that the deal would be worth $134 billion a year for the EU and $107 billion for the US – although opponents have disputed these figures.
As the World Economic Forum’s E15 Initiative has highlighted, effective global trade is central to economic growth and development. Trade agreements are an integral part of making this a reality.
From Regional Trade Agreements and the Multi-polar Global Order:
Implications for South Korea’s Economy.
From Regional Trade Agreements and the Multi-polar Global Order:
Implications for South Korea’s Economy.
From Regional Trade Agreements: Promoting conflict or building peace?
Rising Powers Global Economic Governance Mega-Regionals World Trade Organization (WTO) Transatlantic Trade and Investment Partnership (TTIP) Transpacific Trade and Investment Partnership (TPP) MFN (Most Favored Nation) PTA (Preferred Trading Agreement) FTA (Free Trade Agreement) RTA (Regional Trade Agreement) MTS (Multi Lateral Trade System) BTA (Bilateral Trade Agreement) Belt and Road Initiative Regional Comprehensive Economic Partnership (RCEP) ASEAN AEC APEC BRICS EU SAARC MERCOSUR Free Trade Area of the Asia-Pacific (FTAAP) NAFTA ASEAN+3 ASEAN+6 Custom Unions Common Markets Economic Unions GATT WTO SADC COMESA ECOWAS ECCAS/CEEAC SACU AFTA SAPTA/SAFTA.
Key Sources of Research:
What is Regional Trade Blocs or Free Trade Agreements?
The world’s free trade areas – and all you need to know about them.
Regional trade agreements: Blessing or burden?
Caroline Freund, Emanuel Ornelas.
Regional Trade Agreements: Promoting conflict or building peace?
Faisal Haq Shaheen.
Shaheen Rafi Khan.
Acordos comerciais regionais.
A COMPLETE GUIDE TO THE REGIONAL TRADE AGREEMENTS OF THE ASIA-PACIFIC.
WRITTEN BY TIM MARTYN.
Globalization and the Growth in Free Trade Agreements.
Regional trade agreements: blessing or burden?
Mexico’s Free Trade Agreements.
M. Angeles Villarreal.
Specialist in International Trade and Finance.
Regional Trade Agreements in a Multilateral Trade Regime: An Overview.
REGIONAL TRADE INTEGRATIONS: A Comparative Study of African RTAs.
Sannassee R., Boopendra S and Tandrayen Verena.
Trade Blocks and the Gravity Model: A Study of Economic Integration among Asian.
Free Trade Agreements, the World Trade Organization and Open Trade.
REGIONAL TRADE BLOCS THE WAY TO THE FUTURE?
Regional Trade Agreements and the WTO.
PREFERENTIAL TRADE AGREEMENTS AND THE WTO: IMPETUS OR IMPEDIMENT?
Committee on International Trade.
Helena Sullivan, Chair.
THE ASSOCIATION OF THE BAR OF THE CITY OF NEW YORK.
42 WEST 44TH STREET, NEW YORK, NY 10036.
Regional Trade Agreements and the Multi-polar Global Order:
Implications for South Korea’s Economy.
Rising Powers in the Global Trading System – China and Mega-Regional Trade Negotiations.
Asia’s Rise in the New World Trade Order.
The Effects of Mega-Regional Trade Agreements on Asian Countries.
Part 2 of the GED Study Series:
Effects of Mega-Regional Trade Agreements.
Regional Trade Agreements: Development Challenges and Policy Options.
Regional Trade Agreements.
What are mega-regional trade agreements?
Regional trade agreements, integration and development.
Mega-R egional T rade Agreements and the F uture of the WTO.
CHINA’S NEW REGIONAL TRADE AGREEMENTS.
CHINA’S REGIONAL AND BILATERAL TRADE AGREEMENTS.
Chunding Li Jing.
Wang John Whalley.
Currency Unions and Regional Trade Agreements: EMU and EU Effects on Trade.
Federal Reserve Bank of San Francisco.
Regionalism in a globalizing world: an Asia-Pacific perspective.
Evolving Networks of Regional RTGS Payment and Settlement Systems.
Evolving Networks of Regional RTGS Payment and Settlement Systems.
Globalization has created incentives for nations to form regional economic unions to take advantage of scale and resource pooling.
There are a lot of efforts underway to develop and implement regional RTGS between central banks. There are several models for integration.
Many States, Many Currencies – Hong Kong SAR Many States, Single Currency – EU uses EURO and Central America uses USD, SADC uses South African RAND.
RTGS systems designed to facilitate such economic integration.
RTGS – RTGS – Interlink model – Hong Kong, ASEAN 5 RTGS-RTGS – SSP Single Shared Platform model – EU.
From Payment System Interoperability and Oversight: The International Dimension.
Several factors may prompt the international interlinking of PSIs. In most cases, linking national PSIs to achieve international interoperability of certain payment services comes from a country’s decisions to exploit the benefits of international economic and financial integration (i. e., greater international trade and investment activities, attraction of foreign investment capital, risk diversification, and deepening and broadening domestic financial and capital markets), since integration requires economic units to have convenient access to cross-border payment service facilities. A powerful driver to regional PSI interlinking is constituted by the political agreements among countries in a region on a broad, long-term economic and financial development cooperative program. Usually, in this case, the efforts to link payment system (as well as other financial market) infrastructures are supported actively by a core group of countries in organized regional development policy and planning forums.5 In some cases, interlinking may result from decisions by national financial authorities to address the demand from market participants (and/or their customers, including asset managers, other securities servicers, and other types of businesses) for cross-border access to international markets at lower end-to-end transaction costs.
Cross-border transactions can be made possible by establishing bilateral links between national PSIs.8 Perhaps the simplest form of PSI interlinking is achieved when two central banks agree on a scheme to support or facilitate cross-border transactions. This likely requires linking the large-value transfer systems of the countries involved by developing technical interfaces between them. Some other solutions are possible which link national payment systems through central bank bilateral accounts, whereby participating central banks hold settlement accounts either with one another or with a common commercial bank.
More advanced solutions for PSI interlinking are characterized by the adoption of a unified scheme and a common technical-operational facility to process the transactions defined under the scheme. The common (regional or global) technical-operational facility follows one of two basic architectures: the decentralized model, or the single or fully centralized model. Arrangements adopting a decentralized model for regional, cross-regional and/or global payments link existing national settlement systems (Figure 1). These normally feature different degrees of sophistication and complexity. Most decentralized regional payment systems are designed in a “hub-spoke” structure, in which there is a central administrative and technical-operational facility referred to as the “hub entity”, which links the participating systems.9 The interlinking mechanism is usually a standardized messaging and connectivity technology, which links account management and the various national operating systems together, while participants access the hub entity through the national settlement infrastructure of their jurisdiction.
In the centralized platform model, the national payment system infrastructures are replaced by a single international system (Figure 2). In this case, it is more appropriate to talk about international payment system integration. Participants access the system directly through the relevant telecommunications network or indirectly through any direct participant in the system. Centralized platforms are mostly identified with international integration projects, most notably regional, which have evolved into monetary unions with the use of a regional currency. They minimize or even eliminate the distinction between cross-border and domestic payments, and allow for processing both types of transactions in the same system seamlessly.
Various examples illustrate the different technical modalities of interlinking discussed above. One example of bilateral links between national payment systems is the linking of the Hong Kong Monetary Authority ’s U. S. dollar real-time gross settlement (RTGS) system with the RTGS systems of other central banks in the region, specifically Bank Negara Malaysia’s RENTAS and Bank Indonesia’s BI-RTGS . These systems operate on a common operating platform. Their links, which are independent from each other, allow payment-versus-payment settlement between the national currencies of those countries and the U. S. dollar. Other illustrative examples are the East African Payments System (EAPS), which shows the case of national payment systems linked through the holding of bilateral accounts among central banks, and the Sistema de Pagos en Moneda Local involving the national RTGS systems of Argentina and Brazil, which is an example of the national payment systems linked through their respective central banks which hold settlement accounts with a common commercial bank. Currently, two SML systems are operational: one linking the RTGS systems of Argentina and Brazil , and other linking the RTGS systems of Brazil and Uruguay .
Other cases exemplify the decentralized and centralized models of international payment system integration. Schemes with a decentralized settlement system involving multiple parties have been developed in regions where there is a regional currency, as well as for settling cross-border payments denominated in a single foreign currency. The most well-known example of a unified scheme with a decentralized settlement system for a regional currency was the original TARGET in Europe, which linked the Euro RTGS systems of EU national central banks. Another example is the Sistema de Interconexión de Pagos in Central America and the Dominican Republic , which uses a decentralized architecture for settling cross-border payments in U. S. dollars.11.
With regard to the centralized model of PSI interlinking (or integration), relevant examples are TARGET2 and EURO1 supporting euro denominated payments in the European Union,12 the STAR-UEMOA for the West African CFA Franc throughout the West African Economic and Monetary Union , and the RTGS system of the Eastern Caribbean Central Bank (ECCB) for the EC dollar in the Eastern Caribbean Currency Union . Over the past decade, centralized payment system infrastructures have also been developed regionally, where no regional currency existed, to facilitate settlement of domestic, regional, and cross-regional payments in more than one settlement currency (e. g., RAPID in the United Arab Emirates , and CHATS in Hong Kong ). Finally, an example of a unified global system for settlements denominated in multiple currencies is CLS Bank International , which links the national RTGS systems of the participating jurisdictions/currencies, with a strong reliance on the legal agreement of the rulebook and the technical standards.
The Southern African Development Community (SADC) regional payment integration project in the Southern African region captures aspects of a centralized model. The project develops on the International Payments Framework (IPF) concept to construct a regional payment infrastructure composed of a regional automated clearing house (ACH) and settlement system.14 The current architecture consists of the SADC Integrated Regional Electronic Settlement System (SIRESS) , an electronic central system that facilitates cross border trade in the SADC region. SIRESS, and excludes domestic inter-bank payments and settlements. It allows participating banks to settle regional transactions denominated in South African Rand (ZAR) within SADC countries, on an RTGS basis. The system is operated by the South African Reserve Bank (SARB) on behalf of the SADC Committee of Central Bank Governors, with SARB also acting as the ZAR settlement bank. It is a safe and efficient payment/settlement system which reduces the cost to banks since there is no correspondent bank (intermediary) involved.15 The project should eventually evolve into a single regional payment settlement infrastructure, in tandem with the planned monetary union.
The prototypal regional systems for retail payments were multilateral arrangements governed by service agreements and operational protocols of limited standardization between participating banks in different countries. For example, TIPANET, which was designed as a cross-border retail payment service for credit transfers between cooperative banks in Europe and Canada, provided participating members with somewhat lower cost and faster payment delivery than the usual correspondent banking arrangements of that time.16 The widespread growth of credit and debit card payment schemes since the late 1980s provided a second wave of regional and crossregional PSI linkages and integration.
Some regional cross-border arrangements have developed across direct (horizontal) linkages between national schemes. This is the case of the arrangement linking the Interac debit card system in Canada, the NYCE Payments Network and PULSE systems in the United States, and Union Pay in China for access by the schemes’ cardholders to the cross-border debit and ATM networks. Global card payment schemes such as VISA and MasterCard provide cross-border interoperability in transaction systems for credit and debit payments and ATM cash withdrawals for cardholders and (vertical) integration of these systems with proprietary clearing and settlement systems. As global card payment schemes, they deal with domestic, regional, and cross-regional payments.17.
Regional and cross-regional interlinking of national and funds transfer systems in general is a fairly recent development. Some, such as EBA Clearings’ STEP2 in Europe and SICA-UMEOA in the West African Monetary and Economic Union, are single regional schemes and systems for both domestic and cross-border payments among member countries using the euro and the CFA franc, respectively. Others are generally constructed through (horizontal) bilateral linkages between national ACHs. These linkages allow the ACH members in one country to transmit customer payments, typically via credit transfers, to end-receivers holding accounts with ACH members in other countries. The network architecture for regionally or cross-regionally linked payment clearing infrastructure and for single regional ACHs can be either a hub-spoke arrangement with a central hub connection, a centralized network structure, or a distributed bilateral network structure, which contemplates the operation of large providers of payment clearing and processing services (Box 1). Another example, in Europe, is the Single Euro Payments Area (SEPA) scheme compliant clearing and settlement mechanisms (CSMs). Services offered by competing CSMs, based on the SEPA payment schemes, are governed by market forces and are outside the remit of the European Payments Council (EPC). The EU regulation provides that, within the EU, a PSP reachable for a national euro credit transfer or direct debit shall be reachable for euro credit transfers or direct debits initiated through a PSP located in any member state. Any PSP participating in any of the EPC SEPA Schemes (SEPA Credit Transfer, SEPA Direct Debit), under the relevant scheme adherence agreement with the EPC and the relevant EPC SEPA Scheme Rulebook, is permanently obligated to comply with reachability from its readiness date. Each PSP needs to determine how to achieve full reachability for the EPC SEPA Scheme(s) it has adhered to. There are several ways for PSPs to send and receive euro payment transactions to and from other PSPs across SEPA. PSPs can choose and use any solution or combination of solutions, directly or indirectly, as long as reachability and compliance with the EPC SEPA Schemes are effectively ensured.
Main Regions with Regional RTGS Systems.
EU TARGET2 Hong Kong SAR West Africa – WAMZ East Africa – EAPS South Africa (SADC) – SIRESS ASEAN AEC – ASEAN 5 RTGS Central America – USD based RTGS – SIP.
Since the establishment of the European Economic Community in 1958 there has been a progressive movement towards a more integrated European financial market. This movement has been marked by several events. In the field of payments, the most visible were the launch of the euro in 1999 and the cash changeover in the euro area countries in 2002.
The establishment of the large-value central bank payment system TARGET was less visible, but also of great importance. It formed an integral part of the introduction of the euro and facilitated the rapid integration of the euro area money market.
A unique feature of TARGET2 is the fact that its payment services in euro are available across a geographical area which is larger than the euro area. National central banks which have not yet adopted the euro also have the option to participate in TARGET2 to facilitate the settlement of transactions in euro. When new Member States join the euro area the participation in TARGET2 becomes mandatory. The use of TARGET2 is mandatory for the settlement of any euro operations involving the Eurosystem.
As of February 2016, 25 central banks of the EU and their respective user communities are participating in, or connected to, TARGET2:
The 20 euro area central banks (including the ECB) and.
five central banks from non-euro area countries: Bulgaria, Croatia, Denmark, Poland and Romania.
Hong Kong’s financial infrastructure is designed to cater for cross-border as well as domestic economic activities. Links with payment systems and debt securities systems in other economies provide an easily accessible payment and settlement platform for cross-border economic transactions and financial intermediation.
Links with Guangdong (including Shenzhen) – Launched in phases since January 1998, these links cover cross-border RTGS payments in Hong Kong dollars and US dollars, and cheque clearing in Hong Kong dollars, US dollars and renminbi, with Guangdong Province including Shenzhen.1 The use of these links, which helps expedite payments and remittances between Hong Kong and Guangdong, has been rising gradually with the increasing economic integration between Hong Kong and the Mainland.
Cross-border payment arrangements with Mainland – Cross-border payment arrangements involving the Mainland’s Domestic Foreign Currency Payment System were established in March 2009 to facilitate foreign currency funding and liquidity management of Mainland banks and commercial payments. The cross-border payment arrangements currently cover four currencies – the Hong Kong dollar, US dollar, euro and British pound.
Link with Macau – The one-way joint clearing facility for Hong Kong dollar and US dollar cheques between Hong Kong and Macau was launched in August 2007 and June 2008 respectively, reducing the time required for clearing Hong Kong dollar and US dollar cheques drawn on banks in Hong Kong and presented in Macau from four or five days to two.
Link with Malaysia – A link between the Ringgit RTGS system in Malaysia (the RENTAS system) and the US dollar RTGS system in Hong Kong came into operation in November 2006. The link helps eliminate settlement risk by enabling PvP settlements of foreign exchange transactions in ringgit and US dollars during Malaysian and Hong Kong business hours. This is the first cross-border PvP link between two RTGS systems in the region.
Link with Indonesia – The PvP link between Hong Kong’s US dollar RTGS system and Indonesia’s Rupiah RTGS system was launched in January 2010. The link helps eliminate settlement risk by enabling PvP settlements of foreign exchange transactions in Rupiah and US dollars during Indonesian and Hong Kong business hours.
Link with the Continuous Linked Settlement (CLS) system – The CLS system, operated by CLS Bank International, is a global clearing and settlement system for cross-border foreign exchange transactions. It removes settlement risk in these transactions by settling them on a PvP basis. The Hong Kong dollar joined the CLS system in 2004.
Regional CHATS – This is an extension of the RTGS systems in Hong Kong in the regional context. Regional payments in Hong Kong dollars, US dollars, euros and renminbi can use the RTGS platform in Hong Kong to facilitate cross border/cross bank transfers in those currencies.
In 2014, Hong Kong started operating PvP link between HK’s US dollar RTGS system and Thailand’s BAHT RTGS system.
This is surprisingly subtle.
When, for instance, when bank A in the Richmond Federal Reserve district sends $1000 in reserves to bank B in the Minneapolis Federal Reserve district, reserves are taken out of bank A’s account at the Richmond Fed and placed into bank B’s account at the Minneapolis Fed.
Now, bank A’s reserves are a liability on the books of the Richmond Fed, while bank B’s reserves are a liability on the books of the Minneapolis Fed. Without any offsetting change, therefore, the process would result in the Richmond Fed discharging a liability and the Minneapolis Fed gaining a liability – and if this continued, regional Fed assets and liabilities could become highly mismatched.
The principle, then, is that there should be an offsetting swap of assets. It would be too complicated to swap actual assets every time there is a flow of reserves between banks in different districts. (There’s over $3 trillion in transactions every day on Fedwire, the Fed’s RTGS system – and if even a fraction of those are between different districts, the amounts are really enormous.) Instead, in the short run the regional Feds swap accounting entries in an “Interdistrict Settlement Account” (ISA). In the example above, the Minneapolis Fed’s ISA position would increase by $1000, while the Richmond Fed’s ISA position would decrease by $1000, to offset the transfer of liabilities.
So far, this is all very similar to the controversial TARGET2 system in the Euro area, in which large balances between national banks have recently been accumulating. The American system is different, however, because ISA entries are eventually settled via transfers of assets. Every April, the average ISA balance for each regional Fed over the past year is calculated, and this portion of the balance is settled via a transfer of assets in the System Open Market Account (the main pile of Fed assets, run by the New York Fed). Hence, if in April the Minneapolis Fed has an ISA balance of +$500, but over the past year it had an average balance of +$2000, its balance is decreased (by $2000) to -$1500, and it has an offsetting gain of $2000 in SOMA assets.
As this example shows, since it is average balances over the past year that are settled, not the current balances, ISA balances do not necessarily go to zero every April. Historically, they were fairly tiny anyway, but since QE brought dramatic increases in reserves, these balances have sometimes been large and irregular. In the long run, though, the system prevents any persistent imbalances from accumulating.
(Note: the process in April is a little bit more complicated than I describe, since some minor transfers of gold certificate holdings are also involved. Basically, gold certificates are transferred between regional Feds to maintain a constant ratio of gold certificates to federal reserve notes; the transfers of SOMA assets are adjusted to account for this. Wolman’s recent piece for the Richmond Fed is one of the few sources that describes the system in detail.)
Twelve Districts of Federal Reserves.
EAC Payment and Settlement Systems Integration Project (EAC-PSSIP)
The East African Community Secretariat has received financing from the African Development Fund (ADF) toward the cost of the establishment of EAC Payment and Settlement Systems Integration Project (EAC - PSSIP) and intends to apply part of the agreed amount for this grant to payments under the contract for Audit Services for the EAC Payment and Settlement Systems Integration Project (EAC-PSSIP).
The EAC-PSSIP is an integral part of the EAC Financial Sector Development and Regionalisation Project’s (FSDRP) higher objective of broadening and deepening the financial sector and is aimed at complementing the integration of the regional financial market infrastructure to facilitate the undertaking of cross border funds transfer in support of the economies of the region as a whole. The project objective is to contribute to the modernization, harmonization and regional integration of payment and settlement systems.
The project specifically aims at: enhancing convergence and regional integration of payment and settlement systems; and strengthening a harmonized legislative and regulatory financial sector capacity in the Partner States. The Project is structured under the following components: Component 1: Integration of Financial Market Infrastructure; Component 2: Harmonization of Financial Laws and Regulations; and Component 3: Capacity Building.
The project commenced its operation in January, 2014 and it was officially launched in March, 2014.
Towards A Single Currency.
The latest development is the 2013 Monetary Union protocol, which sets out the terms for the introduction of a single currency by 2024. The IMF has stated that greater integration is “expected to help sustain strong economic growth and improve economic efficiency. A larger regional market will lead to economies of scale, lower transaction costs, increased competition, and greater attractiveness as a destination for FDI.” The first step towards this goal has already been taken. In May 2014 the East African Payment System (EAPS) was launched. The new system will facilitate real-time cross-border payments between member states. Initially, the EAPS was operational between Kenya, Tanzania and Uganda, linking the Tanzania Interbank Settlement System, the Kenya Electronic Payment and Settlement System, and the Uganda National Interbank Settlement. Lucy Kinunda, director of national payment systems at the Tanzanian central bank, told the local press, “We see the enthusiasm among commercial banks and traders building up as it facilitates intra-regional trade by reducing costs and risks in money transfers across border.”
While there is much expectation for the single currency and the political and economic integration it will bring, the main challenge will be the process of macroeconomic convergence. There has been substantial variation in inflation and economic growth rates within the EAC. For Kenya, there will also be a challenge in meeting the macroeconomic criteria laid out in the Monetary Union Protocol. In the decade to the end of 2013, Kenya only achieved the inflation target of below 8% in 2010 and 2013. The country fares better on the ratio of public debt to GDP, maintaining a ratio below the target level of 50% every year between 2008 and 2013. The member states have almost a decade to meet the convergence criteria.
SADC – Southern African Development Community – uses RAND as settlement Currency.
The Southern African Development Community (SADC) aims to achieve economic development, peace and security, alleviate poverty, and enhance the standard and quality of life of the peoples of Southern Africa through regional integration. Current status In order to achieve the above objective, a comprehensive development and implementation framework – the Regional Indicative Strategic Development Plan (RISDP) – was formulated in 2001 guiding the regional integration over a period of fi fteen years (2005-2020). The RISDFP outlines key integration milestones in fi ve areas: free trade area, customs union, common market, monetary union and single currency. The free trade area was achieved in August 2008, meaning that for 85% of intra-regional trade there is zero duty. The second milestone, to establish a customs union, has been postponed, with a new target date of sometime in 2013. Although the ultimate goal of monetary union with a single currency is several years away, the SADC Payment System integration project is already in motion. This has strategic objectives to: harmonise legal and regulatory frameworks to facilitate regional clearing and settlement arrangements; implement an integrated regional cross-border payment settlement infrastructure; and establish a co-operative oversight arrangement based on the harmonised regulatory framework. The first phase of the cross-border payment settlement infrastructure (SIRESS) went live for the Common Monetary Area countries that use the South African rand (South Africa, Lesotho, Namibia and Swaziland) in July 2013. The new system allows the settlement of payment transactions in a central location using rand as the common settlement currency. Next steps – towards an Economic Union If successful, the new system will be rolled out to the rest of the SADC Member States as the region advances towards its eventual establishment as an economic union. In parallel, the immediate next step is the establishment of the SADC customs union, which presents a number of challenges; the major one is the establishment of a single Common External Tariff, which requires convergence of all individual tariff policies into a single and uniform tariff regime.
The first stage of the Sadc Integrated Regional Electronic Settlement System (SIRESS), being the first go-live involving countries in the Common Monetary Area (CMA) namely Lesotho, Namibia, South Africa and Swaziland, was initiated in July 2013. Phase Two involved Malawi, Tanzania and Zimbabwe going live in April 2014 followed by Mauritius and Zambia which went live in September 2014 under Phase Three. Since the launch of Siress, 43% of payments in the Sadc region are now executed through the system, which settles payments in South African rand. By April 2015 Siress had reached the ZAR1 trillion (US$85,1 billion) settlement mark. This phenomenal growth of Siress is emblematic of the growing importance and influence of regional payment systems in general, the rationale of which is the subject of this article.
As of 2015, 9 out of the 15 countries have joined the RTGS system.
ECOWAS – West Africa Monetary Zone (WAMZ)
The Economic Community of West African States (ECOWAS)’ Monetary Cooperation Programme (EMCP) provided the blueprint for the economic integration of the countries of West Africa. Amongst other measures, the EMCP called for the creation of a single monetary zone in the sub-regions known as the West African Monetary Zone (WAMZ). The WAMZ was created in April 2000 with the goal to establish an economic and monetary union of the member countries. In 2001, WAMZ created the West African Monetary Institute (WAMI) to undertake preparatory activities for the establishment of the West African Central Bank (WACB), and the launching of a monetary union for the Zone. The WAMZ programme aims to increase trade among the ECOWAS/WAMZ member countries, reduce transaction costs for the users of payment systems, domesticate cross-border transactions within the WAMZ through the use of a single currency, develop safe, secure and effi cient payment systems that conform to global standards and build a payment system that will facilitate monetary policy management for the WACB.
Ahead of the establishment of the WACB, having a modernised, safe and stable financial infrastructure in place is a prerequisite to introduce a monetary union successfully. To this effect, a grant of about USD 30 million from African Development Bank Fund was approved for the WAMZ Payments System Development Project, which aims to improve the basic infrastructure of the fi nancial sector through upgrade of the payment systems of our countries – The Gambia, Guinea, Sierra Lone and Liberia. The system components of the project include Real-Time Gross Settlement (RTGS) system, Automated Clearing House (ACH) / Automated Cheque Processing (ACP) systems, Central Securities Depository (CSD) / Scripless Securities Settlement (SSS) systems, Core Banking Application (CBA) system and infrastructure upgrade (telecommunication and energy). The Gambia’s high-value payment system went live in July 2012 and Sierra Leone is currently going through the implementation. The target date of the project completion in all four countries is June 2014.
COMESA – Common Market for East and Southern Africa.
The COMESA launched the COMESA Customs Union in 2009 and the COMESA Regional Payment and Settlement System (REPSS) to facilitate crossborder payment and settlement between Central Banks in the COMESA region. The new system provides a single gateway for Central Banks within the region to effect payment and settlement of trades.
Burundi, Comoros, DRC, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Zambia, Zimbabwe.
ECOWAS – WAEMU/UEMOA – West African Economic and Monetary Union.
created as a single monetary zone is the West African Economic and Monetary Union (WAEMU) / Union Economique et Monétaire Ouest Africaine (UEMOA). The WAEMU was established to promote economic integration among member countries and a common market that share West African francs (CFA francs) as a common currency, monetary policies, and French as an official language. It is a trade zone agreement to encourage internal development, improve trade, establish uniform tariffs for goods, establish a regional stock exchange and a regional banking system.
The UEMOA/WAEMU has successfully implemented macro-economic convergence criteria and an effective surveillance mechanism; adopted a customs union and common external tariff; and combined indirect taxation regulations, in addition to initiating regional structural and sectoral policies. Uniquely amongst Africa’s regionalisation projects, UEMOA/WAEMU has a single central bank, Banque Centrale des Etats de l’Afrique de l’Ouest (BCEAO), which governs all of the fi nancial institutions across the Union. As part of the project for modernisation of the payment and financial infrastructure, the BCEAO launched a regional Real Time Gross Settlement (RTGS) system in 2004 and the regional Automated Clearing House (ACH) system in 2008.
Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal, Togo.
SIP — A NEW INTEGRATED REGIONAL PAYMENT SYSTEM.
Guatemala Costa Rica Honduras El Salvador Nicaragua Dominican Republic.
Uses US Dollar as settlement Currency.
The SIP is a novel framework in the Americas, with several elements that dis - tinguish it from other cross-border arrangements: it involves participants in various countries, allows for payment flows in all directions among participants, uses an RTGS concept for its ‘hub’ and interlinks exclusively central bank RTGS systems, not ACHs, and uses a foreign currency for its settlement accounts.
There may certainly be some doubts as to whether the degree of existing commercial integration among the countries of Central America and the Dominican Republic will suffice to make SIP a commercially viable proposition.
But one can see the SIP as part of a wider initiative which seeks to develop the financial infrastructure with a view to furthering a regional financial market. The SIP will be an integral part of the local payment systems of CMCA member countries and, as such, will widen the coverage of available services to the benefit of participants of the national payment systems. Furthermore, the SIP could act as a direct stimulus for those banks that operate in only one of the member countries to offer affordable cross-border payment services to its clients and thus assist in the strengthening of regional financial integration.
Payment issues : Deputy Trade Minister Bayu Krisnamurthi (second right), accompanied by Artajasa president director Arya Damar (right), inspects a booth during the Integrated Payment System seminar in Jakarta on Wednesday. The seminar aimed at informing business players about the integrated payment system ahead of the ASEAN Economic Community in 2015. (Antara/Prasetyo Utomo)
Bank Indonesia (BI) is currently developing tools to create a more time-efficient and low-cost payment system ahead of the launch of the ASEAN Economic Community (AEC) in 2015 , when there will be a free flow of goods, services and people among ASEAN member countries.
‘€œWe are working to develop a more integrated national payment system before having an integrated payment system within the ASEAN region,’€ BI payment system executive director Rosmaya Hadi said at a seminar held by electronic payment service provider PT Artajasa Pembayaran Elektronik on Wednesday.
With the new system, the Indonesian banking industry will have a new real-time gross settlement system (RTGS) in which bank customers can carry out multi currency transactions on a real-time basis, she said.
‘€œWith this system, a bank customer can carry out multicurrency transactions in only minutes through non-cash payments,’€ she said, adding that BI would launch the new system this year.
Rosmaya also said the Indonesian central bank and its counterparts in five ASEAN members, including Malaysia, the Philippines, Singapore and Thailand, had agreed to prepare for an integrated payment system.
‘€œCentral banks of the ASEAN 5 have formed task forces on trade settlements, retail payments, monthly remittances, capital market settlements and standardization to formulate a set of regulations and schemes with which we will have an ASEAN integrated payment system,’€ she said.
Under the regional integrated payment system, people in ASEAN will be able to make financial transactions through ATMs, credit cards or electronic money without sacrificing much time and money.
According to a report by the ASEAN Working Committee on Payment and Settlement Systems (WC-PSS), the integrated payment system will reduce bank charges (such as foreign exchange spread among ASEAN currencies and handling fees), and encourage regulated non-bank remittance service providers to adopt international/common standards in retail payment systems.
Of all the ASEAN member countries, only Indonesia, the Philippines and Thailand currently have full ATM interoperability, according to an Asian Development Bank Institute report published in 2013.
‘€œWhen the AEC commences, ASEAN member countries will have greater need for an integrated payment system as people from across the region will have to carry out transactions from and to their home countries,’€ said Deputy Trade Minister Bayu Krisnamurthi at a similar event.
The AEC, also known as the ASEAN single market, will commence at the end of 2015. Under the AEC, the ASEAN 5 and Brunei Darussalam will have free trade agreements, while Cambodia, Laos, Myanmar and Vietnam will fully participate in the community in 2018.
Artajasa president director Arya Damar said that Indonesia should also develop its banking sector to tap its large market by utilizing more cashless transactions, otherwise other ASEAN countries’€™ banks would do so.
Citing BI data, Artajasa said that with a total of 800,000 local branches, commercial banks in Indonesia could reach only 20 percent of the total working-age population of around 150 million people.
‘€œMeanwhile, with only 15,000 ATMs, Malaysian commercial banks can reach 66 percent of its total working-age population,’€ he said.
Thai commercial banks, with around 66,000 ATMs, can reach about 30 percent of Of Thailand’€™s total working-age population, he added. (koi)
SINGAPORE – The five largest members of ASEAN – Indonesia, Malaysia, Singapore, the Philippines and Thailand – have agreed to implement an integrated payment system to enable real time gross settlement (RTGS) systems to be in effect by next year.
“With this system, a bank customer can carry out multi-currency transactions in minutes through non-cash payments,” said Rosmaya Hadi with Bank Indonesia.
The ASEAN 5 Central Banks are currently working on establishing protocols for intra-trade settlement, retail payments, monthly remittances, capital market settlements and standardization to enable the system to be up and running by the time the ASEAN Economic Community (AEC) unification occurs next January.
“When the AEC commences, ASEAN member countries will have greater need for an integrated payment system as people from across the region will have to carry out transactions from and to their home countries,” according to Deputy Trade Minister Bayu Krisnamurthi.
Under the system, individual users across ASEAN will be able to make financial payments through ATMs, credit cards, or electronic money without spending a significant amount of time or money doing so. As ASEAN currently has no plan to establish a unified currency, this program is expected to increase multi-currency transactions.
ASEAN members are also developing their ATM networks; Indonesia, for example, has an ATM reach of 20 percent of its total working population of 150 million, compared with 66 per cent for Malaysia.
Indonesia, Malaysia and Thailand are currently the only ASEAN members to have full ATM integration according to the Asian Development Bank. This will soon change as the other ASEAN member nations work towards greater integration.
Indonesia, Thailand, Phillipines, Singapore, Malaysia and Brunei Darussalam in 2015.
Cambodia, Laos, Myanmar and Vietnam to join in 2018.
ASEAN +3 Cross Border Infrastructure.
In Delhi in May 2013, the Finance Ministers and Central Bank Governors of the Association of Southeast Asian Nations (ASEAN), the People’s Republic of China (PRC), Japan, and the Republic of Korea—collectively known as ASEAN+3—agreed to set up a Cross-Border Settlement Infrastructure Forum (CSIF) to discuss detailed work plans and related processes for the improvement of cross-border settlement in the region, which included the possibility of establishing a regional settlement intermediary (RSI). Members, observers, and the CSIF Secretariat are listed in Appendix 1.
Based on the intensive discussions among CSIF members, the first report, Basic Principles on Establishing a Regional Settlement Intermediary and Next Steps Forward, was published by the Asian Development Bank in May 2014 after being endorsed by the ASEAN+3 finance ministers and Central Bank governors at their 17th meeting held in May 2014 in Astana. The members agreed that the central securities depository (CSD)–real-time gross settlement (RTGS) linkages, which connect national CSD systems and RTGS systems in a flexible.
way, would be an achievable model for cross-border settlement infrastructure in the short term and medium term. This model linking existing infrastructure enables local bonds to be settled in delivery versus payment (DVP) via central bank money, which ensures the safety of settlement and is compliant with international standards, as well as being cost - efficient. As such, the CSD–RTGS linkages are to be studied as the most feasible model for implementing the RSI in ASEAN+3.
The Joint Statement of the 17th ASEAN+3 Finance Ministers and Central Bank Governors Meeting reads as follows:
We welcomed the recommendations submitted by the Cross-Border Settlement Infrastructure Forum (CSIF) and the direction of developing the implementation roadmap of CSD-RTGS linkages as short-term and medium-term goals and integrated solution as a long-term goal for making it possible to deliver securities smoothly and safely versus payment across borders. We are of the view that this is a practical and efficient approach to advance regional settlement infrastructure that promotes cross-border securities transactions in the region.
The 4th and 5th CSIF meetings were held in Hong Kong, China (September 2014) and Manila (January 2015), respectively. Specific topics to develop an implementation plan for the CSD–RTGS linkages—such as a desktop study, possible road map—were discussed at these meetings. As an initial step, the Bank of Japan (BOJ) and the Hong Kong Monetary Authority (HKMA) agreed to conduct a desktop study.
Regional Integration in South Asia: BIMSTEC, SAARC, SAPTA, SAFTA.
January 1, 2016, marked the tenth anniversary of the South Asian Free Trade Area (Safta). The agreement, which was reached in January 2004 at the 12th Saarc Summit in Islamabad, Pakistan, came into force on January 1, 2006, and became operational after the agreement was ratified by seven nations (Afghanistan, the eighth member, ratified it in May 2011).
It created a free trade area for the people of eight South Asian nations and aimed at reducing custom duties of all traded goods to zero by 2016. That year is here but the South Asian nations see trade among them making up a meagre five per cent of their total transactions.
The purpose of Safta was to promote common contract among the member-nations and provide them with equitable benefits. It also aimed at increasing the level of cooperation in economy and trade among the Saarc nations by lowering the tariff and barriers and give special preference to the least developed countries in the Saarc region.
At a time when regional trade blocs and free trade area have emerged as models of cooperative economic growth, the Safta had offered a great opportunity to take forward the process of South Asian integration.
But South Asia has too much problems.
But South Asia is a unique regional entity in the entire world. It is a region which has remained a prisoner of the past and pressing geopolitical realities involving India, Pakistan and China.
Thanks to the relentless rivalry between India and Pakistan and the latter’s proximity to the Chinese who have included the strategy of containing India in its scheme of things in South Asia, the idea of integration of South Asia in other forms have remained elusive.
Other smaller countries like Nepal, Bengladesh, Maldives and Sri Lanka, too, have played the China card against India time and again, hurting the prospects of mutual confidence.
In such an atmosphere of suspicion, achieving what the Safta had envisioned a decade back has been next to impossible. Despite a free trade pact since 2006, trade among South Asian nations makes up five percent of their total trade. They share few transport and power connections between them.
We saw how Saarc fell apart at its 2014 summit.
We saw how the Saarc was split during the 18th summit held in Kathmandu in 2014 end when India and Nepal accused Pakistan of creating an obstacle on the way of regional integration by refusing to sign three multilateral agreements, including road trade and sharing of electricity.
Indian Prime Minister Narendra Modi even went to the extent of warning at that time, saying the integration would happen through the Saarc or without it.
He found backing in the Nepali ranks. India then went ahead with ties (visa, energy, road) with other neighbours like Nepal and Bangladesh and also promised to cut its trade surplus with the South Asian nations. But in all, Modi expressed displeasure that the progress was too slow.
Despite the presence of instruments like Safta and Bimstec (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), South Asia has only languished. The state of affairs in connectivity, financial infrastructure including banking and mobility of people and goods have remained stuck in the complex cobweb of customs, visa and transit norms.
India, too, is responsible for the poor state of affairs.
India, being the largest nation in South Asia, has been equally guilty by not attaching much significance to the forum in the past, as it did in nurturing relation with the West and Russia. There has been a sheer lack of continuity in the country’s successive governments’ priorities towards South Asia.
For most, a combative policy towards Pakistan and dominating approach towards the smaller neighbours have been the most-after stand. No wonder, opportunities like Safta were lost without a trace.
Can Narendra Modi govt turn the tables around?
However, the Narendra Modi regime has attached much importance to the issue of South Asian integration which is a silver lining. The way India’s PM invited all South Asian heads of states or representatives to his swearing-in ceremony or kicked off his foreign tours with visits to small states like Bhutan and Nepal or suddenly landed in Lahore to reach out to his Pakistani counterpart-all these suggest that his government aspires to see a better surroundings.
Yes, there have been a serious goof-up by India’s foreign-policy makers in Nepal in the wake of its ratifying a new constitution, which has left the Himalayan neighbour distraught, but yet going by PM Modi’s general intent of improving the state of South Asian cooperation, the decade-old Safta could still have a future.
As of now, the wait will be for the 19th Saarc summit in Islamabad later this year.
Regional Monetary Co-operation in the Developing World Taking Stock.
Barbara Fritz / Laurissa Mühlich.
Redefining the Landscape of Payment Systems.
Summary of Proceedings of the World Bank Conference.
PAYMENT SYSTEMS TO FACILITATE SOUTH ASIAN INTRA - REGIONAL TRADE.
Regional Integration and Economic Development in South Asia.
Creating an Association of Southeast Asian Nations Payment System: Policy and Regulatory Issues.
No. 422 May 2013.
BASIC PRINCIPLES ON ESTABLISHING A REGIONAL SETTLEMENT INTERMEDIARY AND NEXT STEPS FORWARD.
CROSS-BORDER SETTLEMENT INFRASTRUCTURE FORUM.
PAYMENT AND SECURITIES SETTLEMENT SYSTEMS IN THE MIDDLE EAST AND NORTH AFRICA.
MASSIMO CIRASINO AND MARCO NICOLÌ.
Payments Systems and Intra African Trade.
Africa Payments: Insights into African transaction flows.
PAYMENT SYSTEMS DEVELOPMENT IN THE WEST AFRICAN MONETARY ZONE (WAMZ)
BY TEMITOPE W. OSHIKOYA.
SADC Regional payments integration Project – Annexure 6.
CROSS-BORDER LOW VALUE PAYMENTS AND REGIONAL INTEGRATION: ENABLERS AND DISABLERS.
DR. LEO LIPIS COLIN ADAMS.
EAC - PAYMENT AND SETTLEMENT SYSTEMS INTEGRATION PROJECT (EAC-PSSIP)
The development of a regional payment system in Central America: A step towards further integration and economic development.
Gregor Heinrich and Enrique Garcıa Dubon.
Implementing Cross-border Payment, Clearing and Settlement.
Systems: Lessons from the Southern African Development Community.
Albert Mutonga Matongela.
Payment System Interoperability and Oversight: The International Dimension.
Payment systems to facilitate South Asian integration.
Towards South Asia Economic Union.
RBI suspends euro transactions via Asian Clearing Union.
Financial Infrastructure in Hong Kong.
PEOPLE’S REPUBLIC OF CHINA––HONG KONG SPECIAL ADMINISTRATIVE REGION.
OVERSIGHT AND SUPERVISION OF FINANCIAL MARKET INFRASTRUCTURES–TECHNICAL NOTE.
IMF Country Report No. 14/208.
FINANCIAL SECTOR ASSESSMENT PROGRAM.
PAYMENT AND SETTLEMENT SYSTEMS.
Bonk of Malaysia.
Financial Sector Reforms and Prospects for Financial Integration in Maghreb Countries.
Amor Tahari, Patricia Brenner, Erik De Vrijer, Marina Moretti, Abdelhak Senhadji, Gabriel Sensenbrenner, and Juan Solé.
The Southern African Development Community Integrated Regional Settlement System (SIRESS): What? Como? and Why?
The Payment and Settlement Systems in the Republic of China (Taiwan)
PAYMENT SYSTEMS IN JAPAN.
The Inefficiencies of Cross-Border Payments: How Current Forces Are Shaping the Future.
Written by Yoon S. Park, PHD & DBA, George Washington University.
BI prepares for ASEAN integrated payment system.
The Jakarta Post.
Jakarta | Thu, January 30, 2014.
ASEAN Financial Integration towards ASEAN 2025:
Call for a well-coordinated supervisory and regulatory framework.
Satoru (Tomo) Yamadera.
UK Payments Infrastructure: Exploring Opportunities.
Payment Systems in Latin America: Advances and Opportunities.
By Nancy Russell, NLRussell Associates.
PROGRESS REPORT ON ESTABLISHING A REGIONAL SETTLEMENT INTERMEDIARY AND NEXT STEPS.
Implementing Central Securities Depository–Real-Time Gross Settlement Linkages in ASEAN+3.
CROSS-BORDER SETTLEMENT INFRASTRUCTURE FORUM.
ASEAN+3 Information on Transaction Flows and Settlement Infrastructures.
ASEAN+3 Bond Market Forum Sub-Forum 2 (ABMF SF2)
BASIC PRINCIPLES ON ESTABLISHING A REGIONAL SETTLEMENT INTERMEDIARY AND NEXT STEPS FORWARD.
CROSS-BORDER SETTLEMENT INFRASTRUCTURE FORUM.
ASIAN ECONOMIC INTEGRATION REPORT.
WHAT DRIVES FOREIGN DIRECT INVESTMENT IN ASIA AND THE PACIFIC?
ASEAN Financial Integration.
Geert Almekinders, Satoshi Fukuda, Alex Mourmouras, Jianping Zhou and Yong Sarah Zhou.
Guidelines for the Successful Regional Integration of Financial Infrastructures.
ASEAN 5 Prepares for Integrated Payment System.
Posted on January 31, 2014.
Establishing an integrated payment system (real-time gross settlement) in ASEAN.
Kusumo Wardhono, Dwi Tjahja.
a Practical approach to International Monetary System Reform: Building Settlement Infrastructure for Regional Currencies.
Changyong Rhee and Lea Sumulong.
Strengthening Financial Infrastructure.
Peter J. Morgan and Mario Lamberte.
No. 345 February 2012.
Why Complementarity Matters for Stability — Hong Kong SAR and Singapore as Asian Financial Centers.
V. Le Leslé, F. Ohnsorge, M. Kim, S. Seshadri.
Navigating Rise of Global RMB.
Cross-border payment link established with Hong Kong.
Hong Kong’s role in facilitating the use of Renminbi as a currency for settling international transactions.
TARGET2: a global hub for processing payments in euro.
THE EAST AFRICAN PAYMENT SYSTEM (EAPS)
Hong Kong and Thailand launch a new cross-border payment-versus-payment link.
Settlement Systems of East Asian Economies.
Payments in ASEAN post AEC.
Vengadasalam Venkatachalam, Head of Product Management South East Asia.
PSSR – Payments and Settlement Systems Report.
Payment, clearing and settlement systems in Hong Kong SAR.
Interdependencies of payment and settlement systems: the Hong Kong experience.
Creating an Integrated Payment System: The Evolution of Fedwire.
Adam M. Gilbert, Dara Hunt, and Kenneth C. Winch.
Federal Reserve Interdistrict Settlement.
TARGET2 and Central Bank Balance Sheets.
1 University College Dublin New Draft.
Ontology and Theory for a Redesign of European Monetary Union.
TARGET2: Symptom, Not Cause, of Eurozone Woes.
By Thomas A. Lubik and Karl Rhodes.
The Idiot’s Guide to the Federal Reserve Interdistrict Settlement Account.
Mutual aSSiStance betWeen Federal reServe bankS.
1913-1960 aS ProlegoMena to the target2 debate.
Barry Eichengreen, Arnaud Mehl, Livia Chiţu and Gary Richardson.
Interpreting TARGET2 balances.
by Stephen G Cecchetti, Robert N McCauley and Patrick M McGuire.
Monetary and Economic Department December 2012.
Cross Border/Offshore Payment and Settlement Systems.
Cross Border/Offshore Payment and Settlement Systems.
There are several ways by which international payment transactions are done around the globe.
Main mechanisms for payment and settlements are as follows:
Correspondent Banks Network – loosely coupled network of private banks. Clearing Bank Model - using international clearing banks – China’s RMB Clearing Banks Cross border RTGS – used mainly in regional economic and monetary blocs such as EMU – TARGET2. Clearing House model – Offshore Payment, Clearing, and settlements through systems such CHIPS in USA and CIPS in China.
Central Banks also have created a Currency Swap network for providing liquidity in international financial markets.
Recently, there has been a decline in correspondent banks network transactions. Many global banks have withdrawn correspondent relationships with other banks due to increased regulations.
There is also a newer trend in using ACH networks for international transactions. SEPA in Europe and FedGlobal ACH in USA are two examples.
SWIFT and CLS bank also play a critical role in international payments.
There is also very large OTC FX market in which 5.1 trillion USD per day are traded. I am not yet sure about the clearing and settlements of these transactions.
There are some newer technology platforms which have started providing Global payment services. Earthport in UK and Ripple Labs are two such examples.
Large Value Transfer Methods (B2B Transfers)
Cross border, Same Currency – TARGET2, SEPA, EURO1 Offshore, currency specific – CHIPS for USD, CIPS for RMB Cross border, multiple currencies – SWIFT, CLS Offshore Clearing Houses – Hong Kong, Singapore, London, Japan, Frankfurt, USA OTC FX markets (FX SWAPS, FX SPOT, FX Forward, FX Futures) Network of Correspondent Banks Network of Clearing Houses CB FX Swap Network Intra bank payment networks: Multinational Banks (Branch or subsidiary in a foreign country) FEDGlobal ACH Hawala System.
Regional Blocs (where new RTGS are being developed)
East Africa Community (EAC) West African Monetary Zone (WAMZ) Common Market for East and South Africa (COMESA) South African Development Community (SADC) – SIRESS RTGS Automated Clearing House in Common Monetary Area (CMA) ASEAN AEC ? South Asian (Asian Clearing Union) ?
LVPS used for International Payments.
EURO1 ( Pan Europe) euroSIC (Frankfurt) used for Euro transactions between countries in EU but not in EMU. FXYCS (Japan) EAF (Germany) SIC (Switzerland) CHIPS ( USA) CHAPS (UK) LVTS (Canada) CIPS (China)
I am not sure how many of these networks are currently operational since countries in EU have migrated to TARGET2 since 2008.
G-LVTN (Global Large Value Transfer Networks)
There are several newer solutions for international payment and money remittances at retail level. B2C and C2C international money transfers. They are listed here along with old solutions but are not discussed in this post.
New and Old Solutions (Retail B2C, C2C)
Block chain Ripple Earthport Transferwise Xoom (A Paypal service) Paypal Bitcoins Western Union (Old) MoneyGram (Old) Money2India/ICICI Bank State Bank of India Global ACH with FX Conversion International ACH Transactions.
One of the main reasons for this discrepancy is the inadequacy of the infrastructure for cross-border renminbi payments. Cross-border payments are currently made via a patchwork of clearing hubs and correspondent banks. These payments are hindered by complicated routing procedures, the need to maintain multiple foreign correspondent accounts, liquidity shortages in some offshore RMB centers, different hours of operations between clearing centers, a lack of common standards between international and Chinese domestic payment systems, and China’s capital controls.
Despite these hurdles, the use of the renminbi as an international payments currency has continued to grow rapidly. In the first half of 2015, there were more than RMB 5.7 trillion (USD 866.7 billion) worth of payments made to and from China using the renminbi. Currently, around a third of payments between China and the Asia Pacific region are conducted using renminbi. These numbers are projected to increase substantially over the coming years due to the desirability for Chinese businesses to use their own currency for trade transactions.
The increased use of the renminbi has led to around RMB1.5 trillion (USD 231 billion) in offshore renminbi deposits, with the largest amounts in Hong Kong, Taiwan and Singapore, respectively. As more renminbi accumulate outside of China, investors will increase their demands for channels to repatriate funds back onshore.
China’s Cross-border Inter-bank Payment System (CIPS) seeks to address many of the existing problems facing cross-border renminbi payments. CIPS provides one-point entry by participants and a central location for clearing renminbi payments It allows participation by both onshore and offshore banks and provides direct access to China National Advanced Payment System (CNAPS). These features reduce the need for banks to navigate complicated payment pathways via offshore clearing hubs or through correspondent banks. This should result in faster payment processing and reduced costs for cross-border payments.
CIPS is a real time gross settlement system, meaning that banks settle payments immediately between each other on a gross rather than a net basis. This reduces credit risks that can arise in systems where payments are netted before settlement.
Payment messages sent within CIPS are written in both English and Chinese. This eliminates the necessity of translating messages into Chinese before they can be transmitted to CNAPS. CIPS utilizes the ISO20022 messaging standard, a widely used international messaging scheme for cash, securities, trade and foreign exchange transactions. CIPS will also utilize SWIFT bank identifier codes, rather than CNAPS clearing codes. These factors will allow CIPS to smoothly process payments flowing between offshore banks using SWIFT and mainland banks using CNAPS. As a result, cross-border payments made through CIPS should be able to achieve straight through processing.
CIPS operating hours will extend from 9:00am to 8:00pm Shanghai-time. This allows the system to overlap with business hours in Europe, Africa, Oceania, and Asia. Banks within these jurisdictions will be able to settle renminbi transactions during their business day. Though North and South America are not currently covered, the People’s Bank of China (PBoC) has stated that an expansion of CIPS’ operating hours is possible.
As of the launch in October 2015, CIPS had 19 direct participants and 176 indirect participants. The initial direct members of CIPS include 11 Chinese banks and the Chinese subsidiaries of 8 foreign banks. There is currently only one American bank that is a direct participant in the system, Citibank. Of the indirect participants, 38 were Chinese banks and 138 are foreign banks.
Details on plans for the future development of CIPS are sparse. Chinese officials have spoken of a Phase II for CIPS that will improve liquidity management and the efficiency of cross-border clearing and settlement. PBoC officials have also stated that Phase II will include longer operating hours, support for securities settlement and central counterparties.
The creation of CIPS is an important milestone on the renminbi’s road to becoming a major global currency. It has the potential to significantly improve the efficiency of cross-border payment transactions and increase liquidity in the offshore market. CIPS provides a more direct pathway for processing transactions, improving speed and lowering fees. Liquidity in the offshore renminbi market will be improved due to the large number of participating financial institutions and the direct link the system has with CNAPS.
The fact that the renminbi has progressed so quickly despite the underlying deficiencies in the payments infrastructure is a testament to the global demand for the currency. CIPS seeks to rectify these deficiencies and is likely to play a critical role in the renminbi’s future growth as an international payments currency.
The Clearing House Interbank Payments System (CHIPS) is a bank-owned, privately operated electronic payments system.
CHIPS is both a customer and a competitor of the Federal Reserve’s Fedwire service.
The average daily value of CHIPS transactions is about $1.2 trillion a day.
The Clearing House Interbank Payments System (CHIPS) is an electronic payments system that transfers funds and settles transactions in U. S. dollars. CHIPS enables banks to transfer and settle international payments more quickly by replacing official bank checks with electronic bookkeeping entries. As of January 2002, CHIPS had 59 members, including large U. S. banks and U. S. branches of foreign banks.
The New York Clearing House Association, a group of the largest New York City commercial banks, organized CHIPS in 1970 for eight of its members with Federal Reserve System membership. Participation in CHIPS expanded gradually in the 1970s and 1980s to include other commercial banks, Edge corporations, United States agencies and branches of foreign banks, and other financial institutions.
Until 1981, final settlement, or the actual movement of balances at the Federal Reserve, occurred on the morning after a transfer. Sharply rising settlement volumes raised concerns that next-day settlement exposed funds unduly to various overnight and over-weekend risks. In August 1981, the Federal Reserve agreed to provide same-day settlement to CHIPS participants through Fedwire, the Fed’s electronic funds and securities transfer network.
The number of CHIPS members has fallen from about 140 in the late 1980s, mainly because of consolidations in the banking industry. Membership might have fallen even more sharply if CHIPS had not acted in 1998 to eliminate a requirement that members maintain an office in New York City.
CHIPS is governed by a ten-member board consisting of senior officers of large banks that establishes rules and fees and admits and reevaluates participants. CHIPS handles about 240,000 transactions a day with a total dollar value of about $1.2 trillion. Historically, CHIPS specialized in settling the dollar portion of foreign exchange transactions, and CHIPS estimates that it handles 95 percent of all U. S. dollar payments moving between countries. However, the CHIPS focus has shifted to domestic business since CHIPS introduced intraday settlement in January 2001.
Until January 2001, CHIPS conducted all of its settling at the end of the business day. Now, however, CHIPS provides intraday payment finality through a real-time system. CHIPS settles small payments, which can be accommodated by the banks’ available balances, individually. Other payments are netted bilaterally (e. g., when Bank A has to pay $500 million to Bank B, and Bank B has to pay $500 million to Bank A), without any actual movement of funds between CHIPS participants.
Other payments are netted multilaterally. Suppose Bank A must pay $500 million to Bank B, and Bank A is also expecting to receive $500 million from Bank C. Without netting, Bank A would send $500 million to Bank B, and it would thus experience a decline in its available cash while it was awaiting the payment from Bank C.
Using the CHIPS netting system, however, Bank A submits its $500 million payment for Bank B to a payments queue, where it waits until Bank C’s offsetting payment is received. The effect of matching and netting these payments is that Bank A’s cash position is simultaneously reduced by its payment to Bank B and increased by receipt of its payment from Bank C. The overall effect on Bank A’s cash position is thus zero.
Payments for which no match can be found are not made until the end of the day, but each payment is final as soon as it is made. To facilitate the working of the intraday netting system, each participant pre-funds its CHIPS account by depositing a certain amount between 12:30 and 9:00 a. m. The size of this “security deposit,” which is recalculated weekly, is set by CHIPS based on the number and size of the bank’s recent CHIPS transactions, and none of it can be withdrawn during the day. At the end of the day, CHIPS uses these deposits to settle any still-unsettled transactions. Any participant that has a negative closing position at the end of the day (that is, it owes more than what it has in its security deposit) has 30 minutes to make up the difference. The 30-minute period is referred to as the final prefunding period. If any banks do not meet their final prefunding requirement, CHIPS settles as many of the remaining payments as possible with funds that are in the system, and any payments still unsettled must be settled outside of CHIPS.
Banks that have positive closing positions at the end of the day receive the amounts that they are due in the form of Fedwire payments. Because the ultimate CHIPS settlements are provided by Fedwire, CHIPS is a customer, as well as a competitor, of Fedwire. The vast majority of CHIPS members are also Fedwire participants, and the daily value of CHIPS transfers is about 80 percent of Fedwire’s non-securities transfers.
CHIPS has recently added electronic data interchange (EDI) capability to its payment message format. EDI allows participants to transmit business information (such as the purpose of a payment) along with their electronic funds transfers.
USA FedGlobal ACH Payments.
To facilitate this mapping process, the Federal Reserve Bank of Atlanta joined with U. S. and foreign depository institutions, international clearing and settlement service providers, and other interested parties to form the International Payments Framework Association (IPFA). The IPFA is a nonprofit membership association comprising 29 members representing Brazil, Canada, Europe, Japan, South Africa, the United Kingdom, and the United States whose purpose is to create a framework for bridging national formats for non-urgent international credit transfers. IPFA establishes rules, standards, and operating procedures for the exchange of these payments. The first effort by IPFA was to create rules that would facilitate a bridge between the IAT format for ACH credit transfers and the payment format, ISO 20022, which supports the several retail networks within the single euro payments area (also known as SEPA), under the SEPA credit transfer scheme. The next step underway is to leverage the framework created for the United States and SEPA in order to add other countries—such as Brazil, Canada, and South Africa—that want to exchange payments with the United States or SEPA ACH networks.
The Reserve Banks, through FedGlobal, launched their first commercial international ACH service with Canada in 1999.43 The service began as a pilot program for outbound commercial ACH transfers from the United States to Canada and became a production service in December 2001. Subsequent to the Canadian service, the Reserve Banks launched individual services to Europe, Mexico, Panama, and Latin America, covering 34 countries in total.44 In 2010, the Reserve Banks processed 1.3 million international ACH transfers—accounting for about 20 percent of the total volume of international payments being cleared and settled through the U. S. ACH network.45.
The Reserve Banks offer FedGlobal account-to-account services to Canada, Mexico, Panama, and 22 countries in Europe. The Reserve Banks offer FedGlobal A2R services to Argentina, Brazil, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Peru, and Uruguay.
Europe Cross Border LVPS.
Target 2 Euro1 SEPA CLS/SWIFT STEP 2 STEP 1.
EU EBA Clearing – EURO1, STEP1, STEP2, MyBank.
EBA Clearing is a provider of pan-European payment infrastructure with headquarters in Paris. It is wholly owned by its shareholders.
Its initial mission consisted in the operation of the clearing and settlement system for single euro transactions of high value EURO1, which the Euro Banking Association (EBA) had transferred to EBA Clearing for the launch of the system in 1999. Besides EURO1, EBA Clearing also owns and operates STEP1, a payment system for single euro payments for small and medium-sized banks, and STEP2, a Pan-European Automated Clearing House (PE-ACH) for euro retail payments. In March 2013, EBA CLEARING launched MyBank, an e-authorisation solution for online payments, which is geared at facilitating the growth of e-commerce across Europe.[1]
Both EURO1 and STEP2 have been identified as Systemically Important Payment Systems (SIPS) by the European Central Bank (ECB). EBA CLEARING is also planning to deliver a pan-European instant payments infrastructure solution in the course of 2017.
The organisation is based in Paris and has representative offices in Brussels, Frankfurt and Milan.
EURO1 is a RTGS-equivalent large-value payment system on a multilateral net basis, for single euro transactions of high priority and urgency, and primarily of large amount. EURO1 is owned and operated by EBA CLEARING. It is open to banks that have a registered address or branch in the European Union and fulfil a number of additional requirements. EURO1 is subject to German law (current account principle/single obligation structure) and is based on a messaging and IT infrastructure provided by SWIFT.
Since 2000, EBA CLEARING has been offering a payment service named STEP1 for small and medium-sized banks for single euro payments of high priority and urgency. The technical infrastructure is the same as that of the EURO1 system, both use the messaging and IT infrastructure of SWIFT.
STEP2 was put into operation in 2003 with Italian payment system provider SIA S. p.A. It processes mass payments in euro. STEP2 is a Pan-European Automated Clearing House (PE-ACH). This means that it complies with the principles set by the European Payments Council (EPC) for a PE-ACH Compliant Clearing and Settlement System.
From the beginning of Single Euro Payments Area (SEPA) on 28 January 2008, STEP2 has been offering SEPA Credit Transfer processing services across all SEPA countries through its SEPA Credit Transfer (SCT) Service. Since 2 November 2009, the transposition date of the Payment Services Directive, EBA CLEARING has been processing SEPA Direct Debits with its STEP2 SDD Core and STEP2 SEPA Direct Debit (“Business to Business”) Services. Through its SEPA Credit Transfer and Direct Debit offerings, STEP2 provides banks across Europe with one channel through which they can send and receive their SEPA Credit Transfers and SEPA Direct Debits. The STEP2 platform reaches nearly 100 percent of all banks that have signed the SCT and SDD Scheme Adherence Agreements of the European Payments Council (EPC).
MyBank is a pan-European e-authorisation solution for online payments that was launched in March 2013 by EBA CLEARING. The solution enables customers across Europe to pay for their online purchases via their regular online or mobile banking environment without having to disclose confidential data to the merchant or other third parties. The solution can be used for authorising SEPA Credit Transfers as well as the creation of SDD mandates. At a later stage, MyBank may also be used for transactions in currencies other than euro or for e-identity services.
Today, MyBank is owned and managed by PRETA S. A.S., a wholly owned subsidiary of EBA CLEARING.[2]
ECB identifies systemically important payments systems.
Four systems were identified: TARGET2, EURO1, STEP2-T and CORE(FR);
Goal is to ensure efficient management of risks and sound governance arrangements.
The European Central Bank (ECB) has identified four key payment systems that are now under the new ECB Regulation on oversight requirements for systemically important payment systems (SIPS), which entered into force on 12 August 2014. The regulation covers large-value and retail payment systems in the euro area operated by both central banks and private entities, and aims at ensuring efficient management of legal, credit, liquidity, operational, general business, custody, investment and other risks as well as sound governance arrangements, namely with a view towards promoting the smooth operation of safe and efficient payment systems in the euro area.
The four systems identified today are: TARGET2, operated by the Eurosystem; EURO1 and STEP2-T, operated by EBA CLEARING; and CORE(FR), operated by STET, a joint initiative of six major French banks. They were identified according to the combination of at least two of four main criteria, i. e. the value of payments settled, market share, cross-border relevance and provision of services to other infrastructures. The Eurosystem will review this list annually on the basis of updated statistical data.
From CLS Bank & the World of FX Settlement.
Starting my career as a trader on Wall Street, one of the big mysteries I had, was just how all these trades on the NYSE got executed and reported. Within the maze of specialist booths and flying paper, trades were being crossed and buyers and sellers were recognized. While the occasional errors occur, the wild system is highly efficient at reporting and settling trades.
In the world of OTC, settlement represents a larger factor, as participants are not bound by a central exchange system that insures against counterparty risk. As such, companies are on their own to ensure that trades are settled correctly with their counterparties, and an exchange of funds takes place.
In Forex Magnates’s Q1 2013 Industry Report, we took a look at the world of FX settlement and post-trade flow and researched CLS Bank and Traiana. We wanted to know just what they did, and how their products help FX players handle their settlement needs, create efficient markets, and lower overall transaction costs. In this first part, we focus on CLS Bank.
Launched in 2002, CLS Bank was created as a private sector initiative, to deliver and operate services to mitigate settlement risk in the FX market. Owned and operated by member institutions and working alongside central banks, CLS offers members the ability to settle trades within a central location, thus, providing efficiencies to FX markets.
To understand what CLS does, it is first important to know how settlement works. Settlement is the process in which the payment and securities of a transaction are delivered. Within the securities world, this occurs in a three day window. For example, if a trader buys 100 shares of IBM stock at $100/share, the broker has three days to collect the $10,000 from the client, transfer it to the seller, and collect the shares back for the client.
Within FX, settlement does not involve securities, but instead different currencies. Therefore, in a EUR/USD trade, the seller sends dollars while receiving euros. For OTC participants, one of the greatest worries is settlement risk, which occurs when a counterparty is unable or unwilling to provide either the payment or transfer of securities.
While a deal between two parties can easily be voided, thus limiting impact of a problematic counterparty, the greater concern is the systemic risk. As traders are simultaneously trading with multiple parties, if one party fails to honor a transaction, it can affect counterparties and could prevent them from having the funds and/or securities to settle other trades.
Jake Smith, Head of Communications at CLS, explained that “FX settlement risk is also known as ‘Herstatt Risk’ ”. The name is derived from the failure of a privately owned German bank in 1974. At the time, Bankhaus Herstatt had received delivery of Deutsche marks from US counterparty banks, but had been put into receivership before the corresponding dollars were sent, due to the time zone difference.” Smith explained that, while this occurred nearly 40 years ago, “due to volumes growing substantially since that time, settlement risk has grown significantly.”
To mitigate this risk, CLS was created. Currently, there are over 60 members, who represent some of the largest financial institutions from around the world. CLS provides a central settlement network for FX transactions between its members and their customers. To facilitate settlement, all members are required to have a single multi-currency account with CLS, supporting the 17 currencies that are settled by its system.
After conducting a trade, members send transactional details to CLS Bank, including trade details, counterparties, and settlement data. On the day of settlement, CLS Bank multilaterally nets all the instructions between the settlement members, calculating each institution’s pay-in obligations for the day, to ensure settlement of all their instructions on a payment-versus - payment basis. As settlement completes, pay-out of multi-laterally netted long balances will occur.
Example: GBP/USD = 1.50, EUR/USD = 1.25.
Member 1: Buys 1,000,000 GBP/USD from Member 2.
Member 2: Buys 1,000,000 EUR/USD from Member 3.
Member 3: Buys 1,000,000 GBP/USD from Member 1.
Member 1: Owes 1.5M USD & 1M GBP, collects 1.5M USD & 1M GBP.
Member 2: Owes 1.25M USD & 1M GBP, collects 1M EUR & 1.5 USD.
Member 3: Owes 1.5M USD & 1M EUR, collects 1.25M USD & 1M GBP.
CLS then multi-laterally nets the total obligations:
Member 1: Pays 0.0.
Member 2: Pays 1M GBP.
Member 3: Pays 0.25M USD & 1M EUR.
These obligations are funded into each member’s respective multi-currency account.
CLS then redistributes the obligations to the corresponding members.
Member 1: Receives 0.0.
Member 2: Receives 1M EUR & 0.25M USD.
Member 3: Receives 1M GBP.
By multi-laterally netting (also known as trade compression) payment obligations for each currency, CLS eliminates the need to fund trades on an individual basis per currency, resulting in approximately 96% netting efficiency. This increases to 99% with In/Out Swaps (an In/Out Swap is an intraday swap consisting of two equal and opposite FX transactions.)
That means, that for every $1 trillion of In/Out swaps settled, members need to provide funding for less than $10 billion, and $40 million for spot FX. With CLS handling nearly $5 trillion worth of daily settlements, the netting rates are a key element in allowing firms to grow their transactional volumes, while substantially reducing the amount of funding required. According to Smith, “CLS believes this safer and efficient process is one of the factors that led to the increase in FX volumes over the last 10 years.”
Smith explained that CLS provides a number of benefits to the FX industry, including, settlement risk mitigation, multi-lateral netting, operational and IT efficiencies, business growth opportunities, and the ability to develop industry solutions best practices, common standards and rules that benefit the FX market.
Within settlement risk mitigation also comes credit recognition. By being CLS members, credit departments have a greater understanding of each other and the counterparty risk. This allows firms to allocate less risk between trades to other members. For example, while a bank may decide to trade up to $10 billion with another member, they are more likely to limit their trade exposure to non-members.
In terms of operational efficiencies, a key factor is with regard to CLS’s one rule and oversight committee. Having one set of guidelines for members and central banks, provides all participants with a clearer understanding of their counterparties. When adding a new currency, the corresponding central bank needs to follow the standardized guidelines. These rules provide protection for members who benefit from the increased transparency a participating central bank will need to follow.
In July 2012, the critical role that CLS plays in global financial markets was recognised by the US Department of the Treasury’s Financial Stability Oversight Council, when it designated CLS as a systemically important Financial Market Utility (FMU). CLS’s importance was highlighted further in November 2012, with the announcement of the US Treasury Department’s exemption of FX swaps and forwards from the clearing requirements required for many financial products under the Dodd-Frank legislation. The role that CLS plays in the mitigation of FX settlement risk was believed to be a contributing factor towards that decision.
CLS’s increased investment in technology, has enabled it to materially expand peak capacity as it updated core technologies, to meet the elevated standards required of a systemically important FMU. The result is that CLS can now accommodate trade matching volumes of up to five times the average daily volume, and process 20 per cent of a peak day’s volume in a one hour period.
Furthermore, CLS has put in place a flexible technology infrastructure, which enables “capacity on demand”, supporting future software upgrades to be delivered to increase capacity in a matter of days and weeks. This structure, allows CLS to pay for technology only when required, while fulfilling obligations to the market to settle all eligible FX settlement instructions.
The need to build capacity was demonstrated on January 22, 2013, when CLS settled more than 2.6 million instructions, 18 per cent more than the previous high, recorded on 19 September, 2012.
Looking to the future, as emerging markets grow, CLS has received interest from settlement members to include additional currencies. As such, CLS has been evaluating the addition of the Brazilian real, Chilean peso, Chinese renminbi, Russian ruble and Thai baht, amongst others.
Another area where CLS is extending its services is in same day settlement. A significant percentage of USD/CAD trades are intra-day and are not currently included in CLS settlement, due to the time of day. CLS is developing a same day settlement service between US and Canadian dollars to address this settlement risk, which has a proposed launch date in late 2013.
From The complexity of correspondent banking.
Correspondent Banking Network.
Correspondent banking, which can be broadly defined as the provision of banking services by one bank (the “correspondent bank”) to another bank (the “respondent bank”), is essential for customer payments, especially across borders, and for the access of banks themselves to foreign financial systems. The ability to make and receive international payments via correspondent banking is vital for businesses and individuals, and for the G20’s goal of strong, sustainable, balanced growth. At the extreme, if an individual bank loses access to correspondent banking services, this may affect its viability and if a country’s banks more generally face restricted access then it may affect the functioning of the local banking system. In addition, loss of correspondent banking services can create financial exclusion, particularly where it affects flows such as remittances which are a key source of funds for people in many developing countries.
Banks have traditionally maintained broad networks of correspondent banking relationships, but there are growing indications that this situation might be changing. In particular, some banks providing these services are reducing the number of relationships they maintain and are establishing few new ones. The impact of this trend is uneven across jurisdictions and banks. As a result, some respondent banks are likely to maintain relationships, whereas others might risk being cut off from international payment networks. This implies a threat that cross-border payment networks might fragment and that the range of available options for these transactions could narrow.
Rising costs and uncertainty about how far customer due diligence should go in order to ensure regulatory compliance (ie to what extent banks need to know their customers’ customers – the so-called “KYCC”-) are cited by banks as among the main reasons for cutting back their correspondent relationships. To avoid penalties and the related reputational damage correspondent banks have developed an increased sensitivity to the risks associated with correspondent banking. As a consequence, they have cut back services for respondent banks that (i) do not generate sufficient volumes to overcome compliance costs; (ii) are located in jurisdictions perceived as very risky; or (iii) provide payment services to customers about which the necessary information for an adequate risk assessment is not available.
The regulatory framework, and in particular the AML/CFT (Anti-Money Laundering/Counter Financing of Terrorism) requirements and the related implementing legislation and regulations in different jurisdictions, are taken as given in this report. It is acknowledged that these requirements, as agreed by the competent authorities, along with strict implementation, are necessary to prevent and detect criminal activities and ensure a healthy financial system.
From Redefining the Landscape of Payment Systems.
Regional Integration of Payment Systems.
Cross-border and cross-currency commercial and financial payments have traditionally been made through regional and global correspondent banking networks. Correspondent banking networks typically involve multiple levels of intermediation to link national payment systems. Similar arrangements exist for cross-border securities and other market-based transactions. Such decentralized, highly-tiered cross-border arrangements for payment and securities transfer, clearing and settlement involve substantial liquidity, operating and user costs. Moreover, the services provided are often too slow and unreliable for the rising volume of payments associated with closer regional commercial and financial ties. Consequently, more tightly organized and integrated regional and even inter-regional payment and securities infrastructures are developing as a result of integration initiatives in the African, Asian and Latin American regions, among others. The discussions around the theme of regional integration of systems extended even further to the need for harmonized development of central bank payment system and monetary policies.
Integration in Wholesale Systems.
The regional integration of national payment systems directly links the large-value payment systems of the participating countries. The link-up is through a distributed payment communications network involving either bilateral connectivity and system-to-system intra-regional payment settlement or connectivity to a central hub operating an intra-regional clearing and settlement facility. With large-value payment systems typically operated by national central banks, the distributed connectivity model of a regional payment system can substitute for the private correspondent banking network. The correspondent central banking arrangement concentrates intra-regional payments into a single central bank correspondent that participates in a network having more standardized service levels and agreements than the private system (i. e. correspondent banking). Over the medium-term, relative liquidity, operating and user costs should generally be lower and intra-regional payment settlement faster and more predictable than in the private system. A centralized model with a regional settlement bank can facilitate even greater standardization and more effective settlement risk control and, given a common settlement currency, permits multilateral netting that can lower liquidity costs even more as payment values and volumes rise.
The successful regional integration of national large-value payment systems does, however, require several pre-conditions. In addition to the obvious business case, the most critical pre-conditions are the harmonization of key institutional and structural elements in the national systems of the member countries and a sustainable commitment to the regional payment system, and the regional commercial and financial initiatives that underpin it. Experiences cited in a number of regional payment system initiatives indicate that unreasonable expectations of immediate pay-offs from integration and inadequate harmonization of key institutional elements during network expansion, such as those involving sound legal and oversight requirements, cause commitment to the project to waver and can sometimes cause the initiative to collapse. Organized and focused collaboration among all the key stakeholders and cooperation among the overseers of the national payment systems of the member countries is considered critical to sustaining commitment to the regional integration program.
Although several national securities depositories and securities settlement systems have developed bilateral system-to-system links in recent years, only a few have begun to integrate regionally or inter-regionally into an organized multilateral system. While the most developed cross-border systems are within the Eurozone, others have begun to develop elsewhere, as in the South African Development Community. The discussion concerning the role of CCPs in securities and derivatives settlement extended to consideration of regional, and even global, developments.
Integration of Retail Payment Systems.
Aside from the major global card payment systems, which are expanding their products and services into new payment applications for cross-border retail payments, there are only a few bilateral and multilateral system-to-system links that facilitate the clearing and settling of cross-border payments. Correspondent banking arrangements, even for the ultimate settlement of cross-border card payments, are still the primary network arrangements for the ultimate settlement of cross-border retail payments. The regional integration of large-value payment systems, in conjunction with the integration of retail and large-value payment systems at the national level, has spawned some initiatives for the regional integration of national retail payment systems. The SEPA (Single European Payment Area) initiative is perhaps the most ambitious of these integration initiatives. Triggered by policy action and driven by industry initiatives, SEPA is aimed at creating a single integrated market for retail payment instruments and services throughout the Eurozone. The most critical challenges faced by the SEPA initiative have been the set-up of public and private sector collaboration mechanisms for decision-making, user support from public sector administrations, and the harmonization of national legal barriers. SEPA-compliant credit and debit transfers are now in place and work is proceeding on the introduction of SEPA-compliant card payments and on the development of SEPA-based online and mobile payment channels.
Transnational Payment Systems.
While once there were only domestic payment channels in each country, we have witnessed the emergence of transnational systems such as TARGET, CLS (Continuous Linked Settlement), the Federal Reserve’s International ACH Project, known as FedACH International and the proposed pan-European automated clearinghouse known as PE-ACH. On the other end of the spectrum, card systems such as those operated by Visa and MasterCard are truly global in scope and have been expanding from consumer based transactions into commercial payments for more than a decade. Transnational systems have traditionally focused on providing payments within a region or to a small number of countries and usually support a single currency. Although none of these systems are yet global in scope, it is likely they will continue to expand their coverage to additional countries and currencies. Networks such as Visa and MasterCard are examples of global payment systems that also support multiple currencies, though they are primarily used for retail payments and ad hoc/T&E commercial transactions. Recently, in countries like Switzerland and Hong Kong13, new arrangements have been developed for the settlement of local payments in foreign currency. These arrangements neither fit perfectly in the traditional category of “correspondent banking” or in that of “payment systems”. The main common characteristic of these arrangements or systems is that they do not settle in central bank money but across accounts held with a commercial bank and that they are based on clearly defined and transparent rules for payment activities. Compared to traditional correspondent banking, these new solutions are standardized and settle payments in real time with continuous finality. In 1999, Swiss financial institutions established a cross-border solution in order to facilitate their cash management in euros. This solution involves a fully licensed bank in Germany, Swiss Euro Clearing Bank (SECB). To process euro transactions, SECB uses the euroSIC platform in Switzerland, which is often referred to as the euro payment system of Switzerland. EuroSIC is a replication of the Swiss franc RTGS system, Swiss Interbank Clearing (SIC). SIC and euroSIC are operated by Swiss Interbank Clearing AG. SECB is the settlement institution and shares the role of settlement agent with the operator SIC AG. SECB is also the liquidity provider in euroSIC. It extends intraday and overnight credit to the participants of euroSIC against collateral. SECB provides a link to the euro area, as it is a direct participant in RTGSPLUS through which access to TARGET is established. In Hong Kong, the U. S. dollar and euro clearing systems, USD CHATS (Clearing House Automated Transfer System) and Euro CHATS, were introduced in 2000 and 2003, respectively. They enhance the safety and efficiency of settling these foreign currencies in the local time zone. These systems are almost exact replicas of the Hong Kong dollar RTGS system (HKD CHATS). The key functions of both systems are to enable settlement of foreign exchange transactions between HK dollars, US dollars and euros in their respective currencies through a linkage with the Central Moneymarkets Unit (CMU) in Hong Kong.
The Hong Kong Monetary Authority has appointed the Hong Kong and Shanghai Banking Corporation as the settlement institution for USD CHATS and Standard Chartered Bank (Hong Kong) Limited as the settlement institution for Euro CHATS. Both institutions provide intraday liquidity to the direct participating banks by means of repos as well as overdraft facilities. One of the key benefits of both the US dollar and euro systems is the same day clearing of transactions. Also driving transnational systems is the implementation of “straight through processing (STP)” standards for transfers between banks as well as between banks and customers. To ensure simultaneous and dependable deliveries, payment-versus-payment (PVP), delivery-versus-payment (DVP), and delivery-versus-delivery (DVD) processes have also been established. The growth in transnational systems can improve the efficiency of cross-border payments by reducing clearing and settlement times, minimizing float. Better visibility of funds flows supports improved cash forecasting. Finally, standardized formats will reduce costly errors and repairs.
Intra bank Payments Networks – Multinational Banks.
Mergers and acquisitions have been the single biggest force reshaping the global payments landscape over the past two decades. The most recent round of consolidation has left a disparity between large and small never before seen. For example, we have witnessed the emergence of mega banks such as the combining of Bank of America and Nations Bank, as well as JP Morgan Chase combining Chase Manhattan Bank, Manufacturers Hanover Bank, Morgan Guaranty Trust and Bank One. In a scale-driven, technology-intensive business like payments, the emergence of true mega-players may lead to markedly different competitive dynamics. Acting as their own transnational systems, large international banks such as JP Morgan Chase, Citibank, Bank of America, and Hongkong Shanghai Banking Corporation operate their own internal global payments networks. Through these, they can route payments to destinations in different countries. Such internal networks do not necessarily differentiate between domestic and cross-border payments as these flows are all within the bank. The trend toward consolidation in the banking sector, both globally and in domestic markets, exerts influence on payment systems. Increased concentration of payment flows may have important credit, liquidity and operational risk implications. For example, the credit exposures that arise within a payments system that does not achieve intraday finality are likely to become concentrated on a smaller number of banks. Operational problems experienced by a single large bank could have significant repercussions for other participants in the system. A concentration of payment flows in commercial banks has emerged to reflect the increasing role that modern commercial banks, especially large global banks, have played in the payment systems around the world. The volumes and values settling across their books are, in some countries, quite substantial. Such traffic has often been accompanied by increased formalization of the correspondent relations within, as well as across, national boundaries. Banks that achieve global economies of scale can further drive down per transaction costs and derive higher revenues by keeping payments within their own networks. For global corporations, it has allowed them to match their global needs with a handful of banks rather than managing a large number of local relationships.
From The Inefficiencies of Cross-Border Payments: How Current Forces Are Shaping the Future.
A survey of major systems facilitating cross-border payments.
American Express : is a publicly traded company that issues charge and credit card products both directly and through nearly 100 financial institutions around the world. American Express had $484 billion in global sales in 2005.15.
CHAPS (Clearing House Automated Payment System) : CHAPS, established in 1984, is the United Kingdom’s high-value payment system, consisting of two systems: CHAPS Sterling and CHAPS Euro, which provide settlement facilities for sterling and euro payments, respectively. Over a dozen large banks and building societies are “direct” or settlement members, while there are also over 400 “indirect” members – typically smaller banks and building societies – who have access to the system through a settlement member.
CHIPS (Clearing House Interbank Payment System) : CHIPS is a bank-owned, privately operated, real-time, multilateral electronic payments system that transfers funds and settles transactions in U. S. dollars. CHIPS began operations in 1970 with 9 participating banks and, as of mid 2006, it processes about 300,000 payments a day with an average daily amount of $1.5 trillion. It currently has 46 participants from 19 countries around the world, including large U. S. banks and U. S. branches of foreign banks. The payments transferred over CHIPS are often related to international interbank transactions, including the payments resulting from foreign currency transactions (such as spot and currency swap contracts) and Euro placements and returns.
CLS (Continuous Linked Settlement) : The CLS system is the private sector response to a G-10 strategy to reduce foreign exchange settlement risk. CLS was founded in 1997 to create the first global settlement system, eliminating settlement risk in the foreign exchange market. Formed in response to regulatory concern related to the temporal and systemic risks (Herstatt risk) associated with foreign exchange transactions, CLS simultaneously settles both sides of foreign exchange trades using a multi-currency payment-versus-payment (PVP) mechanism. CLS is a unique real-time process enabling simultaneous foreign exchange settlement across the globe, eliminating the settlement risk caused by delays arising from time-zone differences. CLS settles well over $1 trillion per day, accounting for a substantial majority of cross-currency transactions across the globe.
Eurogiro : owned by 16 banks/postal financial service companies, is an electronic payment network for postal and giro (postbank) organizations that exchange cross-border credit transfers and cash-on-delivery orders. Established in 1989, Eurogiro has more than 40 participants from 37 countries in Europe, Asia, Africa, South America and the U. S. Members act as correspondents for one another and hold reciprocal accounts with each other to execute payments.
EURO1 : a private sector-owned high-value payment system, operated by the EBA Clearing Company for cross-border and domestic transactions in euro between banks operating in the European Union, and it is the largest of Europe’s four large-value, net settlement systems, processing on average 170,000 payments a day with a total value of about €170 billion. Launched in 1998, EURO1 was developed to provide an efficient, secure and cost-effective infrastructure for large-value payments in the new single currency environment of the EU. EURO1 is based on state-of-art messaging infrastructure and computing facilities supplied by SWIFT.
FedACH International Services : This international gateway arrangement service is owned and operated by the Federal Reserve System. Currently, the Federal Reserve Banks offer a suite of FedACH International Services as part of FedACH Services and provide U. S.- originating depository financial institutions with the ability to send international non-time-critical payments via the same process used to send domestic transactions for many decades. FedACH International Services offer an integrated, uncomplicated method to ensure straight-through processing (STP) of cross-border transactions, using NACHA formats that are supported by most software vendors.
Fedwire (Federal Reserve Wire Network) : This is a high-speed electronic network through which the U. S. Federal Reserve provides the Fedwire Funds Service, the Fedwire Securities Service, and the National Settlement Service. The Fedwire Funds Service provides an RTGS system in which more than 9,500 participants initiate funds transfers that are immediate, final, and irrevocable when processed.
LVTS (Large Value Transfer System) : The fully electronic LVTS, Canada’s real-time gross settlement system, became operational in early 1999. As Canada’s wire payment mechanism, it facilitates the electronic transfer of Canadian dollar payments across the country in real-time. Canada’s national payments system has been operated by the Canadian Payments Association (CPA) since 1980.
MasterCard : is a publicly-traded company that operates a global payment system. In addition to the MasterCard brand, the Maestro and Cirrus brands are also part of the company. MasterCard branded cards generated $1.7 trillion in global sales in 2005.16.
RTGSPLUS : is the German Bundesbank’s new liquidity-saving RTGS, which became operational in November 2001. It combines the risk-reducing benefits of gross settlement of the former German RTGS system known as the Euro Link System (ELS) with the advantages of liquidity-saving processing of the former hybrid system known as Euro Access Frankfurt (EAF).
SWIFT (Society for Worldwide Interbank Financial Telecommunications) : SWIFT is an industry-owned limited liability cooperative that supplies secure messaging services and interface software for financial transactions to more than 7,650 banks, securities brokers and investment managers in more than 200 countries.
SWIFT payment messages are processed by the Financial Information Network (FIN), which operates on a secure IP network called SWIFTNet. SWIFT is integrating into the ACH market segment as a payment service provider via its FileAct messaging service. ACH networks such as the EBA Clearing Company and the South African Automated Clearing Bureau are already using SWIFT’s messaging platform.
STEPS (Straight Through Euro Payment System) : The STEPS program was launched by the Euro Banking Association (EBA) to offer a full range of euro payments across Europe. STEPS has evolved into two systems aimed at accommodating a broad base of processing needs within the European Union: STEP1 (a pan-European system designed to process single cross-border, low-value retail payments) and STEP2 (a pan-European ACH for bulk/high volume, low-value, cross-border and domestic interbank payments).
STEP2 : a pan-European ACH solution, is a joint venture between the EBA and Italy’s ACH operator SIA. STEP2 processes high-volume, commercial and retail payment orders sent to the system via files through a secure network. Characteristics of payment orders that are processed via STEP2 are commercial and retail transfers in euro that are formatted to agreed technical standards. Accessible through SWIFTNet, STEP2 offers payment processing and settlement in euro.
TARGET (Trans-European Automated Real-time Gross Settlement Express Transfer) : The Eurosystem, which comprises the European Central Bank (ECB) and the national central banks (NCBs) of the 12 EU member states which have adopted the euro, has created TARGET for large-value payments in euro. The TARGET system is a “system of systems” composed of the national payment systems of 16 of 25 countries that are currently members of the EU, the ECB payment mechanism (EPM) and an interlinking mechanism that enables the processing of payments between the linked systems.
TARGET2 : The current structure of TARGET was decided on in 1994 and was based on the principles of minimum harmonization and interconnection of existing infrastructures. This was the best way of ensuring that the system would be operational from the very start of the European Economic and Monetary Union (EMU) in 1999. TARGET2 is an enhanced version of the current TARGET incorporating technical consolidation, a single system-wide pricing structure for domestic and cross-border payments, a harmonized service level, and the system-wide pooling of available intraday liquidity. The go-live date for TARGET2 is set for November 19, 2007, with gradual migration to the new system by the member states in four waves. All central banks participating in TARGET2, together with their national banking communities, are expected to be using the new system by May 2008.
Visa : is a private, membership association jointly owned by more than 20,000 member financial institutions around the world. Visa develops common standards and specifications to facilitate commerce and provide member financial institutions with the global payment platform to support transactions on 1.46 billion cards that generate more than $4.3 trillion in global transactions in over 160 countries.17.
Voca : was formed in 1968 and was known as the “Bankers Automated Clearing System” or BACS which is similar to ACH in the US. BACS changed its name to Voca in 2004. Voca is one of a number of domestic ACH-type systems in Europe and owns the BACS infrastructure that processes the majority of non-RTGS, non-card, electronic credit and debit payments for B2C, C2B and B2B in the UK. VOCA performed 5 billion transactions in 2005. 28.
China’s Central Bank RMB Currency Swap Lines.
China’s Offshore RMB Clearing Centers.
Explaining cross-border large-value payment flows: Evidence from TARGET and EURO1 data.
Simonetta Rosati, Stefania Secola.
The Inefficiencies of Cross-Border Payments: How Current Forces Are Shaping the Future.
Written by Yoon S. Park, PHD & DBA, George Washington University.
There Is No Such Thing As An International Wire.
by ERIN MCCUNE on MAY 15, 2014.
The Elements of the Global Network for Large-Value Funds Transfers.
Cross-border RMB Settlements.
China launch of renminbi payments system reflects Swift spying concerns.
Possible RMB – Clearing model for the city of Frankfurt.
RMB Initiative Frankfurt Frankfurt, December 2013.
Working Group on the establishment of an RMB clearing house.
CIPS and the International Role of the Renminbi.
January 27, 2016.
By Nicholas Borst.
Correspondent banking July 2016.
Rethinking correspondent banking.
The complexity of correspondent banking.
CLS Bank & the World of FX Settlement.
Foreign exchange trading and settlement: Past and present.
by John W. McPartland, financial markets consultant.
Chicago Fed Letter 2006.
Settlement risk in foreign exchange markets and CLS Bank.
Cross-Border Payments Perspectives.
Research conducted by Glenbrook Partners.
Redefining the Landscape of Payment Systems.
Summary of Proceedings of the World Bank Conference.
Report to the Congress on the Use of the Automated Clearinghouse System for Remittance Transfers to Foreign Countries.
ESTABLISHING AN INTEGRATED PAYMENT SYSTEM.
(REAL-TIME GROSS SETTLEMENT) IN ASEAN.
A Proposal for a Cross-Border Mechanism to Support the AEC 2015.
PAYMENT SYSTEMS TO FACILITATE SOUTH ASIAN INTRA - REGIONAL TRADE.
Implementing Cross-border Payment, Clearing and Settlement Systems: Lessons from the Southern African Development Community.
Albert Mutonga Matongela.
The emerging single market in South-East Asia.
Payment System Interoperability and Oversight: The International Dimension.
Regional Monetary Co-operation in the Developing World Taking Stock.
Barbara Fritz / Laurissa Mühlich.
FRAMING A NEW ASIAN FINANCIAL ARCHITECTURE.
Creating an Association of Southeast Asian Nations Payment System: Policy and Regulatory Issues.
Payments in ASEAN post AEC.
Regional Integration and Economic Development in South Asia.
Sultan Hafeez Rahman.
Towards South Asia Economic Union.
Proceedings of the.
7th South Asia Economic Summit (SAES)
5-7 November 2014 New Delhi, India.
Siga o Blog via e-mail.
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Supply Chain Finance (SCF) / Financial Supply Chain Management (F-SCM) February 12, 2018 Gantt Chart Simulation for Stock Flow Consistent Production Schedules February 1, 2018 Instant, Immediate, Real Time Retail Payment Systems (IIRT-RPS) January 31, 2018 Network Economics of Block Chain and Distributed Ledger Technology January 12, 2018 Consciousness of Cosmos: A Fractal, Recursive, Holographic Universe November 16, 2017 Integral Philosophy of the Rg Veda: Four Dimensional Man November 6, 2017 Meta Integral Theories: Integral Theory, Critical Realism, and Complex Thought November 3, 2017 Boundaries and Networks October 31, 2017 Regional Trading Blocs and Economic Integration October 28, 2017 Global Liquidity and Cross Border Capital Flows October 25, 2017 Production Chain Length and Boundary Crossings in Global Value Chains October 22, 2017 Intra Industry Trade and International Production and Distribution Networks October 17, 2017 Cash and Investments: Corporate Savings Glut in USA October 12, 2017 Why do Firms buyback their Shares? Causes and Consequences. October 10, 2017 Understanding Trade in Intermediate Goods October 10, 2017 Production and Distribution Planning : Strategic, Global, and Integrated October 5, 2017 Trends in Intra Firm Trade of USA September 27, 2017 FDI vs Outsourcing: Extending Boundaries or Extending Network Chains of Firms September 25, 2017 Slowdown in Global Investment (FDI) Flows September 24, 2017 Trends in Cross Border Mergers and Acquisitions September 20, 2017 Trading Down: NAFTA, TPP, TATIP and Economic Globalization September 19, 2017 Boundary Spanning in Multinational and Transnational Corporations September 18, 2017 On Inequality of Wealth and Income – Causes and Consequences September 12, 2017 Rising Profits, Rising Inequality, and Rising Industry Concentration in the USA September 3, 2017 Why are Macro-economic Growth Forecasts so wrong? August 23, 2017 Low Interest Rates and Business Investments : Update August 2017 August 1, 2017 Low Interest Rates and Monetary Policy Effectiveness July 15, 2017 Low Interest Rates and Banks’ Profitability : Update July 2017 July 9, 2017 Some of my earlier published papers June 18, 2017 Short term Thinking in Investment Decisions of Businesses and Financial Markets May 24, 2017 Systems Biology: Biological Networks, Network Motifs, Switches and Oscillators March 27, 2017 Hierarchy Theory in Biology, Ecology and Evolution March 22, 2017 Bank of Finland’s Payment And Settlement System Simulator (BoF-PSS2) March 16, 2017 On Anticipation: Going Beyond Forecasts and Scenarios March 15, 2017 Clock of the Long Now: Time and Responsibility March 10, 2017 Socio-Cybernetics and Constructivist Approaches March 8, 2017 Growth and Form in Nature: Power Laws and Fractals March 6, 2017 Shapes and Patterns in Nature March 1, 2017 TARGET2 Imbalances in European Monetary Union (EMU) February 27, 2017 Economics of Digital Globalization and Information Data Flows February 26, 2017 Development of Global Trade and Production Accounts: UN SEIGA Initiative February 24, 2017 Accounting For Global Carbon Emission Chains February 22, 2017 Stock Flow Consistent Models for Ecological Economics February 21, 2017 Currency Credit Networks of International Banks February 17, 2017 The Dollar Shortage, Again! in International Wholesale Money Markets February 15, 2017 Understanding Global OTC Foreign Exchange (FX) Market February 12, 2017 Global Financial Safety Net: Regional Reserve Pools and Currency Swap Networks of Central Banks February 10, 2017 Evolving Networks of Regional RTGS Payment and Settlement Systems February 7, 2017 Cross Border/Offshore Payment and Settlement Systems February 6, 2017 Large Value (Wholesale) Payment and Settlement Systems around the Globe February 4, 2017 Structure and Evolution of EFT Payment Networks in the USA, India, and China February 2, 2017 Next Generation of B2C Retail Payment Systems January 31, 2017 Relational Turn in Economic Geography January 29, 2017 Economics of Trade Finance January 27, 2017 Understanding Global Value Chains – G20/OECD/WB Initiative January 25, 2017 The Collapse of Global Trade during Global Financial Crisis of 2008-2009 January 24, 2017 Oscillations and Amplifications in Demand-Supply Network Chains January 22, 2017 Financial Stability and Systemically Important Countries - IMF-FSAP January 18, 2017 Balance Sheets, Financial Interconnectedness, and Financial Stability – G20 Data Gaps Initiative January 16, 2017 Integrated Macroeconomic Accounts, NIPAs, and Financial Accounts January 15, 2017 A Brief History of Macro-Economic Modeling, Forecasting, and Policy Analysis January 12, 2017 Low Interest Rates and International Investment Position of USA January 10, 2017 Jay W. Forrester and System Dynamics January 9, 2017 Increasing Returns, Path Dependence, Circular and Cumulative Causation in Economics January 7, 2017 Economic Growth Theories – Orthodox and Heterodox January 4, 2017 Long Wave Economic Cycles Theory December 30, 2016 Mergers and Acquisitions – Long Term Trends and Waves December 28, 2016 Business Investments and Low Interest Rates December 22, 2016 The Decline in Long Term Real Interest Rates December 19, 2016 Low Interest Rates and Banks Profitability: Update – December 2016 December 15, 2016 Hierarchical Planning: Integration of Strategy, Planning, Scheduling, and Execution December 4, 2016 External Balance sheets of Nations November 29, 2016 Low Interest Rates and International Capital Flows November 23, 2016 Networks and Hierarchies November 12, 2016 Systems View of Life: A Synthesis by Fritjof Capra October 27, 2016 Milankovitch Cycles: Astronomical Theory of Climate Change and Ice Ages October 2, 2016 Process Physics, Process Philosophy September 17, 2016 Shape of the Universe September 4, 2016 Myth of Invariance: Sound, Music, and Recurrent Events and Structures August 26, 2016 Sounds True: Speech, Language, and Communication August 19, 2016 Mind, Consciousness and Quantum Entanglement August 12, 2016 Society as Communication: Social Systems Theory of Niklas Luhmann August 8, 2016 Geometry of Consciousness August 5, 2016 Art of Long View: Future, Uncertainty and Scenario Planning July 31, 2016 Reflexivity, Recursion, and Self Reference July 27, 2016 Truth, Beauty, and Goodness: Integral Theory of Ken Wilber July 24, 2016 Semiotics, Bio-Semiotics and Cyber Semiotics July 22, 2016 Autocatalysis, Autopoiesis and Relational Biology July 19, 2016 Systems and Organizational Cybernetics July 17, 2016 Micro Motives, Macro Behavior: Agent Based Modeling in Economics July 15, 2016 Feedback Thought in Economics and Finance July 13, 2016 Repo Chains and Financial Instability July 11, 2016 Multiplex Financial Networks July 11, 2016 Glimpses of Ancient Indian Mathematics July 9, 2016 Bring back M3 – Monetary Aggregate July 8, 2016 Increasing Returns and Path Dependence in Economics July 7, 2016 Economics of Money, Credit and Debt July 6, 2016 Boundaries and Relational Sociology July 5, 2016 George Dantzig and History of Linear Programming July 3, 2016 Phillips Machine: Hydraulic Flows and Macroeconomics July 1, 2016 Monetary Circuit Theory June 30, 2016 Morris Copeland and Flow of Funds accounts June 30, 2016 Financial Social Accounting Matrix June 29, 2016 Classical roots of Interdependence in Economics June 28, 2016 Stock-Flow Consistent Modeling June 26, 2016 Foundations of Balance Sheet Economics June 24, 2016 Contagion in Financial (Balance sheets) Networks June 22, 2016 Interdependence in Payment and Settlement Systems June 19, 2016 Evolution of Banks Complexity June 17, 2016 Economics of Broker-Dealer Banks June 17, 2016 Shadow Banking June 13, 2016 Low Interest Rates and Risk taking channel of Monetary Policy June 4, 2016 Funding Strategies of Banks June 2, 2016 Non Interest Income of Banks: Diversification and Consolidation May 31, 2016 Impact of Low Interest Rates on Bank’s Profitability May 22, 2016.
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