How does EURO1 work?
Processing payment messages
Payment messages are processed on an individual basis and are final once processed. Processing consists of checking the sending and the receiving participants’ positions and, if possible, adjusting their positions.
Should the adjustment of the positions lead to a breach of the sending participant's debit cap and/or the receiving participant's credit cap, the payment message would not be processed, but put into an on-hold queue. The on-hold queue is revisited continuously throughout the system’s opening hours to check whether further processing of payment messages is possible. The system follows the principle of "by-passing First In, First Out". A payment message can be cancelled by the sending participant as long as it is not processed.
Upon the real-time adjustment of the participants’ positions, EURO1 provides immediate finality for every processed payment. EURO1 thereby offers an RTGS-equivalent system operating on a multilateral net basis. The Single Obligation Structure does not allow unwinding or partial unwinding of a participant’s position. Instead of having to manage multiple bilateral accounting arrangements, participants have one multilateral position towards the system.
Message types and features
The system processes pacs.004, pacs.008, pacs.009 (pacs.009COV and pacs.010 (bilaterally agreed). The system operates in a network agnostic V-shape.
System processing time
The processing starts at 2:30 CET. Cut-off time stands presently at 16:30 CET.
All participants and sub-participants have access to the Interactive Workstation (IWS) which provides the following real-time information online and via a query/response messages:
- the participant’s position, limits and any on-hold payments
- intraday and end-of-day position reports and statements for processed (i.e., payment messages with finality), queued and held-over payment messages
- pre-advice information of payments for future value dates
In addition, numerous possibilities to use customised queries are also available.
The end-of-day settlement process
The current cut-off time for sending payment messages is set at 16:30 CET. This enables all participants to have sufficient time to settle their single obligation prior to the closing time of T2 RTGS at 18:00 CET.
The EURO1 settlement uses the Ancillary System Interface (ASI A) of the T2 RTGS system.
At cut-off time, the EURO1 System completes the processing of all payment messages sent before cut-off and informs each participant of their final SOS position resulting from all payment messages processed during the day.
Upon receipt of the final positions for EURO1 Participants, from the central system, EBA CLEARING sends a file to T2 RTGS/ASI A with the amounts to be debited from and credited to the participants’ RTGS accounts:
- The settlement first debits the T2 RTGS DCAs in T2, of the participants with a negative final position, against the Technical Account of the EURO1 System.
- After all debit transactions have been processed, the credit transactions are processed: the T2 RTGS DCAs for participants with a final credit position are credited against the Technical Account of the EURO1 System.
Once all debit and credit transactions have been processed, EBA CLEARING receives confirmation from T2 RTGS/ASI A that the settlement is completed. Upon receipt of this confirmation, EBA CLEARING notifies all participants that the settlement has been completed. End-of-day settlement is normally completed within less than 7 minutes.