Settlements in euro

It means that all transactions directed by the system participants are received and validated on an ongoing basis. Clearing and settlement of payments are made within four sessions carried out on each clearing day.

Simplified schedule of clearing sessions (without the guarantee of settlement):

The execution of intra-system payments is always performed within the session to which they have been sent, so they are finalized on the same day. Under the inter-system transactions, the settlement is performed in two stages, therefore, the date of finalization may be different than the date of sending payments for clearing, however, this will not be later than on the next clearing day.

Euro Elixir supports payments in Euro both in domestic and cross-border transactions. The range is determined by the clearing scheme used by the participant. For XCT orders, the clearings are intra-system only, while in the case of the SCT system the range is determined by the boundaries of the Single Euro Payments Area.

List of SEPA countries:

Under the Euro Elixir system various categories of transactions in Euro are settled:

• Depending on the relationship between the parties to the transaction:
  - intra-system clearings, which include transactions between participants in the Euro Elixir system,
  - inter-system clearings including transactions in which only one party is a participant in the Euro Elixir system (currently, external clearing systems include: the STEP2 system and systems of partner EACHA clearing houses – Equens and IberPay).
• Depending on the format of the order:
  - XCT clearings, which are based on MT103 label messages, compliant with the SWIFT standard,
  - SCT clearings, which are based on the XML messages, in accordance with ISO20022 and the guidelines of the European Payments Council for SEPA.
  
  

The establishment of a Single Euro Payments Area – SEPA and, in the long run, Poland's entry into the euro area has a significant impact on the functioning of the national settlement system. In cooperation with banks and members of SEPA Forum Polska, KIR has taken actions aimed at adjusting the Polish interbank settlement system to the new standards.

The first stage was to make available the SEPA Credit Transfer (SCT), the pan-European transfer order, to participants in the Euro Elixir system in January 2008. A SEPA transfer must meet specific conditions – e.g. it is made in EUR currency within countries belonging to the SEPA area (EU + Iceland, Norway, Liechtenstein, Switzerland, Monaco, San Marino). Currently, the vast majority of pan-European transfers in euro – amounting to more than 19 billion every year – are made as SEPA transfers. This happens because the rules of making bank transfers in euro are exactly the same regardless of the fact whether the funds are transferred between two accounts located in the same country or in two different countries. The increasing digitization of the world economy leads to the fact that SEPA bank transfers are becoming a popular payment method.

SEPA Direct Debit (SDD) is a second European instrument whose implementation is supposed to facilitate adjusting the Polish interbank settlement system to the new standards. As in the case of a SEPA transfer order, specific conditions need to be met for SDD as well – e.g. making the transfer in EUR currency within countries belonging to the SEPA area. SEPA direct debits also have many advantages for consumers, including an automated transaction, avoiding the risk of missing the payment date and collection of additional fees for delays in payments or incurring losses due to an interruption in services.

KIR is currently preparing the implementation of handling of SEPA Direct Debit messages in the Euro Elixir system. The date and model of SDD implementation depends, above all, on the interest of Euro Elixir system participants in that instrument. A detailed description of the rules of the servicing of SEPA instruments is available on EPC websites.

The Euro Elixir system settlement, initially conducted under the SORBNET-Euro system, has been performed since June 2009 on the SSP TARGET2 platform, under the Polish component, TARGET2-NBP, as the so-called ancillary system. This means transactions cleared by Euro Elixir are settled with special mechanisms and procedures and appropriate interface for communication with the SSP platform.

The settlement is performed on a daily basis, according to the specificity of a dedicated procedure [link], which assumes the execution of settlement of transactions in Euro based on liquidity isolated on the sub-accounts and technical account of the Clearing House on the SSP platform. For settlement purposes, each direct participant in the Euro Elixir system must have a sub-account open (additional account in payment module on the SSP TARGET2 platform, linked to RTGS account), which is made available to the Clearing House.

Euro Elixir enables two methods of settlement under TARGET2:

• direct participation in the TARGET2 system – involves the opening of a sub-account in the TARGET2 system for the purposes of settlement of own clearings and providing the Clearing House with own clearing balance for the settlement,
• indirect participation in the TARGET2 system and opening of a sub-account by in intermediary bank (the so-called settlement bank, which is a direct participant in the TARGET2 system) for the purposes of settlement of the indirect participant's clearing balance.

What is important is that in order to participate in the Euro Elixir system it is not necessary to be a direct participant in the TARGET2 system or operate on the TARGET2 platform.