To:  Clearing Members

No. 06/00

 

SFECH establishment of Exchange Settlement Account

As Members may be aware, on 11th November 1999, the Reserve Bank issued formal approval for SFECH to establish an Exchange Settlement Account. Following the review of operational procedures, changes to internal support systems and external service systems, SFECH will be implementing the ESA on Monday 28th February 2000.

The opening of an Exchange Settlement Account (ESA) means that SFECH will cease to have a bank sponsoring its participation in Austraclear. Instead of funds flowing through an account with a bank, all funds will flow directly into and out of SFECH’s account with the Reserve Bank. The ESA only affects the Australia Dollar transactions of SFECH.

The intra-day monitoring of liquidity will be one of the prime business objectives of SFECH moving forward. Although there are no direct implications for Members, late confirmation of Austraclear payments and receipts will reduce the liquidity of SFECH and could, in some cases, increase the pressure to consistently maintain a positive balance in the Exchange Settlement Account as is required by the Reserve Bank.

Members are reminded that the following times for daily margin payments are to be strictly adhered to:

9:30am Deadline for Daily Cash Settlement Forms to be faxed to SFECH.

10:00am Margin payments (receipt to SFECH) entered into Austraclear.

12:00pm Austraclear payments entered.

Members are also reminded that Monthly MFCIP payments must be settled by 12:00pm on the second business day of the new month.

SFECH encourages Members that experience operational problems on a daily basis, as always, to contact either the Assistant Manager Clearing Services on (02) 9256 0543 or the Austraclear Operator on (02) 9256 0457 as a matter of urgency.

The introduction of an ESA will be transparent to Members who should continue to make Austraclear payments and receipts as per normal.

A presentation on the ESA will be held at the next Clearing House User and Member Group (CHUM) Meeting on Thursday, 9th March. By this time, any problems Members are experiencing will hopefully have come to light. If these problems are of an urgent nature, Members are invited to call one of the staff listed below. However, if the query is not of an urgent nature, Members are welcome to address them at this meeting.

The following contact list should be used to address any problems in relation to the Exchange Settlement Account.

Purpose

Person Responsible

Telephone No.(02)

Intra-day cashflow
payment problems

Di Fletcher

9256 0543

Intra-day cashflow
payment problems

Matthew Chan

9256 0457

ESA operational issues /
problems
General ESA enquiries

Paul Williamson /
Ron Perry

9256 0139 /
9256 0569

For further information on Exchange Settlement Accounts, the Reserve Bank provides general information on its website
http://www.rba.gov.au/media/mr_99_12.html and
http://www.rba.gov.au/media/mr_99_02.html
.

 

Martin Stockley-Smith
GM; Clearing House
22/02/2000