property settlements in rits - rba · • property settlements will not be removed from the rits...

Property Settlements in RITS

October 2014 Payments Settlements Department

Alison Clark Muhammad Ismail

Presentation Outline

• Overview of Property Settlements in RITS

• The RITS Property Settlement day

• Settlement of transactions in RITS using a sub-limit

• Enquiring on Property Settlements

• AIF Advices

• Billing

• Contingency arrangements

• Key dates and further information 2

PEXA

Pre-settlement activities including sourcing of

funding and title checks

Disbursements of funds to beneficiaries

RITS

Reservation of ES funds of paying

participants

Interbank financial settlement across

ESAs

Land Titles Office(s)

Performs title lodgement

(1) Reservation of funds request

(2) Reservation confirmation

(3) Title lodgement request

(4) Title lodgement confirmation

(5) Settlement request

(6) Settlement confirmation

Property Settlement Process and RITS

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Overview of Property Settlements in RITS

• PEXA sends to RITS a group of net interbank settlement positions

• Single net settlement position for each participant • Positions sum to zero • Each Property Settlement is represented by a separate batch in

RITS • Identified by a Batch Identification Number (BIN) • Multilateral (i.e. no central party) • Simultaneous settlement • Batch Stream ID ‘PEXA’

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Net settlement positions in a batch

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Batch Statuses

Batch Status Description Reserved ES funds have been reserved for

paying Members in the batch. Awaiting Settlement Request from PEXA.

Settled The batch has successfully settled.

Deleted • Batch rejected due to one or more paying Members having insufficient ES funds for reservation

• PEXA successfully recalls the batch • Reservation unwound at end of

property day (no Settlement Request received)

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• AIF Advices

• Billing



The RITS Property Settlement Day

• Property Reservations and Settlements can take place from the beginning of RITS DAY session at 9:15am

• Latest time for new Reservations is 6:05pm AEST / 8:05pm AEDT

• Latest time for Settlement is 6:30pm AEST / 8:30pm AEDT

• Reservations still intact at 6:30pm/8:30pm will be unwound

• Unsettled Property batches on RITS Queue at 6:30pm/8:30pm will be removed and flagged unsettled at end-of-day

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The RITS Property Settlement Day cont’d

• 6:30pm / 8:30pm end times will apply to all Property Settlements regardless of evening agreed status of participants

• Property Settlements will not be removed from the RITS Queue at the start of the Interim session

• For the August Bank Holiday (NSW) and the October Labour Day (NSW), the reservation cut-off time will be 5:10pm and the settlement cut-off time will be 5:35pm

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• AIF Advices

• Billing



Settlement of Transactions in RITS

• Reserved funds can be used only to settle Property Settlements

• Property Settlements are placed on the RITS Queue with ESA, Credit and Cash Account Statuses of Priority

• Priority ESA status transactions (including reservations) tested against Available Balance where:

Available Balance = ESA Balance – Reserved Funds • Active ESA status transactions tested against Active

Balance where: Active Balance = Available Balance – Sub-limit

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Settlement of Transactions in RITS • no Reserved Funds

1. No Sub-limit set 2. Sub-limit set

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Settlement of Transactions in RITS • Reserved Funds, no Sub-limit set

ESA Balance: $250m

$0

Priority ESA Status Transactions, new Property reservations and Active ESA Status Transactions can access $200m

Res

erve

d Fu

nds

$50

m

Active Balance: $200m

Only Property Settlements can access Reserved Funds of $50m

Available Balance: $200m

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Settlement of Transactions in RITS • Reserved Funds and Sub-limit set

ESA Balance: $250m

$0

Active ESA Status Transactions access $120m. Active ESA Status Transactions over $120m will remain unsettled

Priority ESA Status Transactions and new Property reservations can access $200m E

SA

Sub

-Lim

it $8

0m

Res

erve

d Fu

nds

$50

m

Available Balance: $200m

Active Balance: $120m

Only Property Settlements can access Reserved Funds of $50m

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• AIF Advices

• Billing



Enquiring on Property Settlements

• Enhancements to ESA Position screen and Queued Payments Management screen

• New Reservation Batch Summary screen

• Existing Batch Enquiry screen

• New Reservation Batch Rejections screen

• Settled Payments enquiry

• Transactions Details enquiry

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ESA Position screen

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ESA Position screen – details panels

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Queued Payments Management

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Batch Enquiry

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Reservation Batch Summary

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Reservation Batch Rejections

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Settled Payments

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Transaction Details

Debit

Credit






• AIF Advices

• Billing



AIF Post-Settlement Advices • Can be selected for property branch

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ESA Statement (MT950) • Field 61 (statement line) for credit and debit

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• AIF Advices

• Billing



Billing

• RITS volume and value transaction fees will be applied to Property Settlements

• They will apply to settled transactions only; no fees will apply to reservations

• Property batch settlement fees will be shown as separate line items to other batch settlements (e.g.CHESS) on invoices and billing enquiries

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• AIF Advices

• Billing



Contingency arrangements • New screen allows PEXA to submit batches currently in

the status of Reserved for settlement via the RITS UI

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• AIF Advices

• Billing



Key Dates

• Property Settlement functionality deployed to RITS Production on Saturday, 25 October

• First Property Settlement batches to settle in RITS on Monday, 3 November

• Gradual migration of property transactions to the PEXA System

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Further Information

• E-conveyancing and Interbank Settlement in RITS: Information Note for Members – Version 4

• RITS Information Facility o User Guides, including − Batch Participant − Overview of Functionality − ESA Management

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Property Settlements in RITS

Questions?

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Spares

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© Property Exchange Australia Limited 2014. This information is subject to copyright and is confidential. It is intended for use only by personnel in connection with the establishment by PEXA of a national e-conveyancing platform. The information may not be used for any other purpose. The information is made available to personnel on a "need to know" basis. Permission to reproduce or disclose to a third party all or any part of this information requires the prior written permission of PEXA.

Insert Headline Here Insert Date Here

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Settlement Execution Process Flow

Title Activity Check

(1hr Prior)

Land

Reg

istr

y PE

XA

Lodgement Case Status

Advice

Subs

crib

er

Settlement Preparation

Funds Reservation Lodgement Funds

Exchange Disbursement Stamp Duty Verification (VIC Only)

Verify Funds

Availability

Set Commitment to Pay SR

O

RBA Reserve

Source FI ESA Funds

Exchange Funds Between

ESAs

Sign Schedule

FI

Disburse Funds to

Beneficiaries

Stamp Duty Verification (1hr Prior)

Source Funding

Move Source Funds to

Clearing Acct

1 2 3 5 6 4 7

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Settlement Execution Process Step Description The settlement schedule must be balanced and signed by all parties by the scheduled settlement time. For subscribers providing

source funds, these funds also need to be verified as available in the nominated accounts before the workspace can move to a ‘Ready’ status.

At the scheduled settlement time, PEXA will lock the workspace and identify any financial line items within the workspace that require automated source fund movement (ie. funds are held in a practitioner trust account and need to be transferred to the Source FI’s nominated clearing account). Where automated source fund movement is required, PEXA will generate a payment instruction file and send it to the Source FI.

Once the Source FI acknowledges that source funds have been transferred, PEXA will send a request to the RBA via RITS to place a reservation of funds on the ESA of the FI(s) that hold the source funds. This reservation is specifically for PEXA and cannot be used for any other purpose by the FI.

Once the RBA confirms that the reservation has been made, PEXA will perform stamp duty verification with the SRO. The returned result from the SRO will be a commitment to pay or confirmation that the duties have already been paid. Note: This step is for VIC only.

Upon successful stamp duty verification PEXA will lodge the documents with the relevant Land Registry. The Land Registry will provide a status advice confirming that the documents have been accepted for lodgement.

Once PEXA receives the status advice from the Land Registry, PEXA will send a second request to the RBA to exchange fund value between the Source FI(s) ESA and Destination FI(s) ESA.

Upon confirmation of the ESA fund exchange from the RBA, PEXA will then instruct the Destination FI to pay away funds to the beneficiary accounts. This includes the payment of Lodgement Fees, Stamp Duty Fees and any Third Party Beneficiaries (such as councils, body corporates, utilities etc.). Subscribers are then notified of settlement completion.

1

2

3

5

6

4

7

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Settlement Payments ESA Report The Settlement Payments ESA Report is a user generated report that shows the net credit or debit of an FI’s ESA account during a given period specified by the user.

Net Value Change DR ($AUD) CR ($AUD)

Total ($AUD) 871,000.00DR 1,551,000.00 680,000.00

No Settlement Date Settlement Time Workspace ID Batch ID (BIN) RITS Transaction ID DR ($AUD) CR ($AUD)

1 05/08/2013 11:00 AEST PEXA1234567890 100,000.00

2 05/08/2013 11:00 AEST PEXA1234567435 85,000.00

3 05/08/2013 11:30 AEST PEXA1234567867 15,000.00

4 05/08/2013 11:30 AEST PEXA1234567144 74,000.00

5 05/08/2013 12:00 AEST PEXA1234562367 388,000.00

6 05/08/2013 12:00 AEST PEXA1234567845 82,000.00

7 05/08/2013 13:00 AEST PEXA1234568524 100,000.00

9 05/08/2013 13:00 AEST PEXA1234569764 524,000.00

10 05/08/2013 13:30 AEST PEXA1234512458 534,000.00

11 05/08/2013 14:00 AEST PEXA1234597658 82,000.00

12 05/08/2013 14:30 AEST PEXA1234561404 247,000.00

Total Net Value Change 871,000.00

The BIN ID and RITS Transaction ID are generated during RITS Reservation and Settlement. These values will only appear in the report when RITS settlement has successfully executed.

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Settlement Payments Finance Operations Report The Settlement Payments Finance Operations Report is a user generated report that shows transactions that have credited or debited the FI’s Internal Account.

No Settlement Date

Settlement Time Workspace ID Transaction ID Subscriber

Reference Settling

For Account Holder

Account BSB

Account Number

Amount ($AUD)

Clearing Account

Clearing BSB

Clearing Number

1 05/08/2013 11:00 AEST PEXA1234567890 PEXA1234567890S01F 45678522 CBA John Smith 013006 123456789 525,000.00 Mortgage Ops 013888 654789456

2 05/08/2013 11:00 AEST PEXA1234567890 PEXA1234567890S02F 85231025 CBA John Smith 013088 234567891 421,000.00 Mortgage Ops 013888 654789456

3 05/08/2013 11:00 AEST PEXA1234567890 PEXA1234567890S03I 25462145 CBA James Peters 013006 345678912 22,000.00 Mortgage Ops 013888 654789456

4 05/08/2013 11:30 AEST PEXA1234567894 PEXA1234567894S02I BW469785 BWFC Fred Bloggs 013999 456789123 630,000.00 Mortgage Ops 013888 654789456

5 05/08/2013 12:00 AEST PEXA1234569812 PEXA1234569812S01F BW111212 BWFC Peter Jones 013002 567891234 100,000.00 Mortgage Ops 013888 654789456

6 05/08/2013 12:00 AEST PEXA1234567975 PEXA1234567975S02F 45612352 CBA Emily Waters

013564 678912345 250,000.00 Mortgage Ops 013888 654789456

7 05/08/2013 13:00 AEST PEXA1234561452 PEXA1234561452S03F 84512352 CBA Jane Smith 013875 789123456 800,000.00 Mortgage Ops 013888 654789456

8 05/08/2013 13:00 AEST PEXA1234561452 PEXA1234561452S01F 87878451 CBA Fred Jones 013789 891234567 87,000.00 Mortgage Ops 013888 654789456

9 05/08/2013 14:00 AEST PEXA1234561244 PEXA1234561244S02I BW512325 BWFC James Smith 013214 912345678 145,000.00 Mortgage Ops 013888 654789456

10 06/08/2013 11:00 AEST PEXA1234567841 PEXA1234567841S01I 48214562 CBA James Bloggs 013546 987654321 621,000.00 Mortgage Ops 013888 654789456

11 06/08/2013 11:00 AEST PEXA1234567841 PEXA1234567841S02I BW645125 BWFC Peter Johnson 013965 876543219 300,000.00 Mortgage Ops 013888 654789456

12 06/08/2013 11:00 AEST PEXA1234564141 PEXA1234564141S01F BW258745 BWFC Adrian Summers 013555 765432198 321,000.00 Mortgage Ops 013888 654789456

13 06/08/2013 11:00 AEST PEXA1234561245 PEXA1234561245S02I 54522222 CBA Tom Smith 013111 765432125 414,000.00 Mortgage Ops 013888 654789456

Total ($AUD) 4,636,000.00

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Settlement Execution – Key Potential Break points

# Potential Failure Point External Party Contingency

2 Source File Sending & Response Source FI FI BCP Process in place APRA FI requirements

3 Funds Reservation Request & Response RBA (COIN/RITS) PEXA Settlement will not proceed until issue resolved. If any source funds were moved they would be returned to the practitioner account by EOD

4 Stamp Duty Verification Request & response (VIC/TAS only) VIC SRO only

PEXA Settlement will not proceed until issue resolved. If any source funds were moved they would be returned to the practitioner account by EOD

5 Lodgement Request & Response LR

Settlement can proceed if the parties have elected to proceed with financial settlement and completed lodgement at a later point. Alternatively, PEXA Settlement will not proceed until issue resolved. If any source funds were moved they would be returned to the practitioner account by EOD

6 Funds Exchange/Settlement Request & Response RBA PEXA RITS UI contingency solution, enabling interbank settlement via

RITS UI

7 Disbursement File Sending & Response Destination FI FI BCP Process in place APRA FI requirements

Settlement Preparation

Funds Reservation Lodgement Funds

Exchange Disbursement Stamp Duty Verification

Source Funding

1 2 4 3 7 5 6

Settlement commences Settlement completes

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property settlements in rits - rba · • property settlements will not be removed from the rits...

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