RTGS FUNCTIONS

Accounts structure and Account

balances

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 Accounts Structure
Account type Name Account Type Account Activity Account Description
Code

Settlement account SA P- Liabilities (Balances can be positive Participants Settlement Account

only) which keeps funds available for
operations. Registered per participant
and currency.

Central Bank CBSA N – Assets and Liabilities (Balance can Central Bank Settlement Account
Settlement account be positive and negative) which keeps funds available for
Central Bank operations. Registered
for Central Bank only.

Clearing Intermediary CLIA N – Assets and Liabilities (Balance can Technical account for Clearing
Account be positive and negative) transactions (from Net systems
settlement).

ILF collateral account ILF_COLL A – Assets (balance can be only Each participant has ILF collateral
negative) account which can be used as source
of the Liquidity for participant.
Participant can only credit this accnt.

General Ledger GL N – Assets and Liabilities (Balance can General Ledger Technical Account
www.smallsystems. technical account be positive and negative) which used to represent transactions
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 Account reserves

Current credit balance

Reserve 1 Reserve 2
...
(Sub-account 1) (Sub-account 2)

Available balance

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 Accounts Reserves structure

Reserve on SA in RTGS for DNS Net settlement

Reserve on SA in RTGS for NRT Net settlement

Reserve on SA in RTGS for other external ACH

Net settlement

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 Account overdraft limit

/SETACCOUNTOVERDRAFTLIMIT/

Current credit balance

Max overdraft allowed

Overdraft Overdraft Overdraft Reserve Reserve Reserve

limit N ... limit 2 limit 1 ...
1 2 M

Available balance
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 /SETPARTICIPANTOVERDRAFTLIMIT/

Max overdraft allowed 1st account

Overdraft Overdraft Overdraft Reserve Reserve Reserve
limit N ... limit 2 limit 1 ...
1 2 M

Max overdraft allowed 2nd account

Overdraft Overdraft Overdraft Reserve Reserve Reserve
limit N ... limit 2 limit 1 ...
... 1 2 M

Max overdraft allowed K th account

Overdraft Overdraft Overdraft Reserve Reserve Reserve
limit N ... limit 2 limit 1 ...
www.smallsystems. 1 2 M
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 Overdraft hierarchy

maximum overdraft per system

(the sum of current overdrafts
RTS/X on all accounts less then
maximum overdraft limit)

maximum overdraft per

Participant
Participants ... (the sum of current overdrafts on
Participant accounts is less then
maximum overdraft limit for this
... Participant)

maximum overdraft per Account

Accounts (calculated by formula)
...
www.smallsystems.
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Limits (reserves) per account

 Balance structure:
Daily movements
Available credit balance

Overdraft Reserve Reserve

limit 1 “DAILY” “CLEARING”

Incoming credit

Turnover debit

Turnover credit
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Current (outgoing) credit balance
 Balance structure:
Real example
500000 Current credit balance

Overdraft Reserve Reserve

limit 1 “DAILY” “CLEARING”

Incoming credit = 400

Turnover debit=116700
Turnover credit=1671.740

Available balance Current debit balance

www.smallsystems. 385371.740 114628.260
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385371.740 = 500000 – 116700 + 1671.740 + 400

 Liquidity management

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 Liquidity management

• On-line monitoring of participants’ account

balances

• Queue management

• Gridlock resolution

• ILF account

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 Liquidity management
Queue management
• Queue management algorithm: Priority+FIFO
• Participant or administrator can modify priority of a
payment in queue or change it’s place without priority
modification
• Administrator (and participant if permitted) can cancel a
payment in queue
• Settle or reject mode: no queuing
• End of day cancellation of queued payments
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 Liquidity management
Priority groups: Example
Exceptional priority.
Used only by system
administrator for Groupe 1 (Priority 1)
urgent cases
...
Clearing Groupe 2 (Priorities 2-3)
results
settlement
...
Groupe 3 (Priority 4)

ILF ... Ordering by

operations priority+FAFO in
Groupe 4 (Priorities 5-9) the queue
Central Bank
operations ...
Groupe 5 (Priorités 10-99)
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Participants’ ...
operations
 Liquidity management
Priority modification

Account debit queue

Payment order

25
16
20 20
16 ...

To the
settlement
engine
Request for priority modification

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 Liquidity management
Queued payment order cancellation
By CB or by Participant depending on the regulations

Account debit queue

Payment order
25 20 ... 17 15

To the
settlement
engine
Cancel request

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 Liquidity management
ILF Processing

• ILF request initiated by CBK Administrator

• Participant ILF collateral account is debited and participant settlement
account is credited
• At the end of the day system performs automatic ILF returns based on
the ILF account balance

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 Liquidity management
Gridlock example
FFFF
0 BBBB

100
400
150 DDDD
600
250 200
100
AAAA CCCC
350 300
100
900
1000 200

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EEEE
 Questions and answers

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