SEPA (sepa direct debit)


SEPA (sepa direct debit)

 

This document defines the SEPA Direct Debit Scheme Rulebook <br />European Payments council

EPC AISBL Secretariat ? Av. de Tervueren 12 ? B 1040 Brussels Tel: +32 2 733 35 33 Fax: +32 2 736 49 88 Enterprise N° 0873.268.927 www.europeanpaymentscouncil.eu secretariat@europeanpaymentscouncil.org © 2006 Copyright European Payments Council (EPC) AISBL: Reproduction for non-commercial purposes is authorised, with acknowledgement of the source Doc: EPC016-06 19 June 2007 (Version 2.3 Approved) EDD WG SEPA DIRECT DEBIT SCHEME RULEBOOK Version 2.3 Approved Abstract This document defines the SEPA Direct Debit Scheme Rulebook. Document Reference EPC016-06 Issue Version 2.3 Approved. Date of Issue 19 June 2007 Reason for Issue Approved by the EPC Plenary 19 June 2007 Reviewed by EPC Produced by EPC Authorised by EPC Circulation Publicly available SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 1 ? 19 June 2007 Preface to the Rulebook The publication of this SEPA Direct Debit Scheme Rulebook (the ?Rulebook?) is an important milestone in the creation of the Single Euro Payments Area (?SEPA?). This Rulebook will serve as the basis for the payment industry within SEPA to develop and implement products and services that allow their customers to make payments by direct debit as easily across SEPA as they do within their local market. The European Payments Council (?EPC?) wishes to ensure that the SEPA Direct Debit Scheme (the ?Scheme?) will be operational as soon as it is feasible, following the transposition of the Payment Services Directive into national law within the SEPA countries. The Scheme has been designed to be capable of evolution to permit the development of features to satisfy future needs. Work is underway on electronic mandates and a separate Rulebook to cover a B2B scheme. The latter will differ from the core scheme in having a shorter time-cycle and no refund right. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 2 ? 19 June 2007 TABLE OF CONTENTS 0 DOCUMENT INFORMATION .........................................................................................................................5 0.1 REFERENCES...................................................................................................................................................5 0.2 CHANGE HISTORY ..........................................................................................................................................6 0.3 PURPOSE OF DOCUMENT.................................................................................................................................6 0.4 ABOUT THE EPC.............................................................................................................................................7 0.5 OTHER RELATED DOCUMENTS .......................................................................................................................7 1 VISION & OBJECTIVES...................................................................................................................................9 1.1 INTRODUCTION...............................................................................................................................................9 1.2 VISION............................................................................................................................................................9 1.3 OBJECTIVES....................................................................................................................................................9 1.4 BINDING NATURE OF THE RULEBOOK ..........................................................................................................10 1.5 SEPARATION OF THE SCHEME FROM THE INFRASTRUCTURE .........................................................................10 1.6 OTHER FEATURES OF THE SCHEME...............................................................................................................10 1.7 THE BUSINESS BENEFITS OF THE SCHEME ....................................................................................................10 1.8 HARMONISED LEGISLATION .........................................................................................................................12 2 SCOPE OF THE SCHEME..............................................................................................................................13 2.1 APPLICATION TO SEPA ................................................................................................................................13 2.2 NATURE OF THE SCHEME..............................................................................................................................13 2.3 RECURRENT AND ONE-OFF DIRECT DEBITS..................................................................................................13 2.4 ADDITIONAL OPTIONAL SERVICES ...............................................................................................................14 2.5 CURRENCY ...................................................................................................................................................14 2.6 VALUE LIMITS FOR AMOUNTS......................................................................................................................15 2.7 REACHABILITY .............................................................................................................................................15 3 ROLES OF THE SCHEME ACTORS ............................................................................................................16 3.1 THE ACTORS.................................................................................................................................................16 3.2 THE FOUR CORNER MODEL..........................................................................................................................17 3.3 GOVERNING LAWS........................................................................................................................................18 3.4 RELATIONSHIP WITH CUSTOMERS ................................................................................................................18 4 BUSINESS AND OPERATIONAL RULES....................................................................................................19 4.1 THE MANDATE .............................................................................................................................................19 4.2 COLLECTIONS...............................................................................................................................................20 4.3 TIME CYCLE OF THE PROCESSING FLOW ......................................................................................................22 4.4 EXCEPTION HANDLING.................................................................................................................................27 4.5 PROCESS DESCRIPTIONS ...............................................................................................................................28 4.6 DESCRIPTION OF THE PROCESS STEPS...........................................................................................................38 4.7 BUSINESS REQUIREMENTS FOR DATASETS ...................................................................................................55 4.8 BUSINESS REQUIREMENTS FOR ATTRIBUTES ................................................................................................63 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 3 ? 19 June 2007 5 RIGHTS AND OBLIGATIONS OF ALL PARTICIPANTS.........................................................................73 5.1 THE SCHEME ................................................................................................................................................73 5.2 COMPLIANCE WITH THE RULEBOOK .............................................................................................................73 5.3 REACHABILITY .............................................................................................................................................74 5.4 ELIGIBILITY FOR PARTICIPATION..................................................................................................................74 5.5 BECOMING A PARTICIPANT...........................................................................................................................75 5.6 DIRECT DEBIT SCHEME LIST OF PARTICIPANTS............................................................................................76 5.7 OBLIGATIONS OF A CREDITOR BANK............................................................................................................76 5.8 OBLIGATIONS OF A DEBTOR BANK...............................................................................................................78 5.9 INDEMNITY AND LIMITATION OF LIABILITY .................................................................................................79 5.10 LIABILITY OF THE EPC.................................................................................................................................80 5.11 TERMINATION...............................................................................................................................................80 5.12 INTELLECTUAL PROPERTY............................................................................................................................81 5.13 COMPLIANCE BY CSMS................................................................................................................................81 5.14 BALANCING PAYMENTS................................................................................................................................82 5.15 CONTRACTUAL PROVISIONS .........................................................................................................................82 6 SEPA SCHEME MANAGEMENT..................................................................................................................84 7 TERMS DEFINED IN THE RULEBOOK......................................................................................................86 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 4 ? 19 June 2007 TABLE OF FIGURES FIGURE 1: 4-CORNER MODEL - CONTRACTUAL .................................................................................................17 FIGURE 2: 4-CORNER MODEL - MANDATE...........................................................................................................19 FIGURE 3: 4-CORNER MODEL ? COLLECTIONS ...................................................................................................20 FIGURE 4: PROCESSING FLOW TIME CYCLES .....................................................................................................25 FIGURE 5: PR01 - ISSUING THE MANDATE ...........................................................................................................30 FIGURE 6: PR02 - AMENDMENT OF THE MANDATE ..........................................................................................31 FIGURE 7: PR03 - CANCELLATION OF THE MANDATE ......................................................................................32 FIGURE 8: PR04 - COLLECTION OF DIRECT DEBIT (1)........................................................................................35 FIGURE 9: PR04 - COLLECTION OF DIRECT DEBIT (2)........................................................................................36 FIGURE 10: PR05 - REVERSAL OF A TRANSACTION ...........................................................................................37 FIGURE 11: ILLUSTRATION OF A DIRECT DEBIT MANDATE ..........................................................................56 ANNEXES ANNEX 1 - DRAFT SEPA DIRECT DEBIT ADHERENCE AGREEMENT ANNEX II - RISK MITIGATION ANNEX III ? STATEMENT OF CONSUMERS' RIGHTS ANNEX IV ? RULEBOOK CHANGES SINCE VERSION 2.2 ANNEX V ? SEPA SCHEME MANAGEMENT INTERNAL RULES SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 5 ? 19 June 2007 0 DOCUMENT INFORMATION 0.1 References This section lists documents referred to in the Rulebook. The convention used throughout is to provide the reference number only, in square brackets. Use of square brackets throughout is exclusively for this purpose. Document Number Title Issued by: [1] EPC027-07 SEPA Scheme Management Internal Rules EPC [2] EPC170-05 Framework for the Evolution of the Clearing and Settlement of Payments in SEPA ? Including the Principles for SEPA Scheme Compliance and Re-statement of the PE-ACH Model (?PE-ACH/CSM Framework?) EPC [3] ISO 13616 Financial services - International bank account number (IBAN) -- Part 1: Structure of the IBAN ISO [4] ISO 3166 Country Codes ISO [5] ISO 9362 Bank Identifier Codes (BIC) ISO [6] EPC029-06 SEPA Data Model EPC [7] EPC261-06 Risk Mitigation in the SEPA Direct Debit Scheme Version 2.31 EPC [8] May 2002 White Paper Euroland: Our Single Payment Area! EPC [9] EPC114-06 SEPA Direct Debit Scheme Implementation Guidelines EPC [10] ISO 20022 Financial Services ? Universal Financial Industry Message Scheme ISO 0.1.1 Defined Terms This Rulebook makes reference to various defined terms which have a specific meaning in the context of this Rulebook. In this Rulebook, a defined term is indicated with a capital letter. A full list of defined terms can be found in Chapter 7 of this Rulebook. ______________________________________________________________________________ 1 Restricted distribution. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 6 ? 19 June 2007 0.2 Change History Issue number Dated Reason for revision V1.0 01/09/2005 First reading at September 2005 Plenary, and national consultation thereafter. V2.0 22/02/2006 Approved at 8 March 2006 Plenary. V2.1 15/09/2006 Approved at 27 September 2006 Plenary. V2.2 13/12/2006 Approved at 13 December 2006 Plenary. V2.3 19/06/2007 Approved by the 19 June 2007 Plenary. Major changes: ? Scheme management provisions, affecting Chapters 0, 5 and 6 to bring Rulebook in line with the Scheme Management Internal Rules. ? Section 2.3 on Additional Optional Services amended to make disclosure of community AOS mandatory ? Addition of Annex V, the SEPA Scheme Management Internal Rules ? Other lesser changes as listed in Annex IV ? Risk Mitigation Annex updated for references to Chapter 6 and Annex V. 0.3 Purpose of Document The EPC made the decision to develop a set of scheme rules when it accepted and approved the Roadmap 2004-2010 at its December 2004 Plenary meeting. The development of the Scheme was treated as a primary and priority objective, along with the creation of a SEPA Credit Transfer Scheme and a SEPA Cards Framework. The EPC vision is to create a set of core payment instruments to be provided by banks to their consumer and corporate customers within SEPA. A SEPA Scheme is a common set of rules, practices and standards for the provision and operation of a SEPA payment instrument agreed at inter-bank level in a competitive environment. The objectives of the Rulebook are: ? To be the primary source for the definition of the rules and obligations of the Scheme ? To provide authoritative information to Participants and other relevant parties as to how the Scheme functions ? To provide involved parties such as Participants, Clearing and Settlement Mechanisms (?CSMs?), and technology suppliers with relevant information to support development and operational projects Following adoption by EPC, the Rulebook will be made available as a basis for systems and product development throughout its community, in preparation for scheme pilots and subsequent operational adoption. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 7 ? 19 June 2007 0.4 About the EPC The EPC is the decision-making and coordination body of the European banking industry in relation to payments whose declared purpose is to support and promote the creation of SEPA. The vision for SEPA was formulated in 2002 at the time of the launch of EPC, when some 42 banks, the three European Credit Sector Associations (?ECSAs?) and the Euro Banking Association (?EBA?) came together and, after an intensive workshop, released the White Paper (reference [8]) in which the following declaration was made and subsequently incorporated into the EPC Charter: ?We, the European banks and European Credit Sector Associations: ? share the common vision that Euroland payments are domestic payments, ? join forces to implement this vision for the benefit of European customers, industry and banks and accordingly, ? launch our Single Payments Area.? The definition of SEPA is part of the EPC Roadmap as approved by the December 2004 Plenary. ?SEPA will be the area where citizens, companies and other economic actors will be able to make and receive payments in euro, within Europe (currently defined as consisting of the 252 European Union (?EU?) member states plus Iceland, Norway, Liechtenstein and Switzerland), whether between or within national boundaries under the same basic conditions, rights and obligations, regardless of their location.? The SEPA will be delivered as a priority within the Eurozone. Within SEPA, but outside the Eurozone, there will be opportunities to participate in euro payment systems, and communities will be able to adopt SEPA standards and practices to contribute to the single market for payment services. 0.5 Other Related Documents The Rulebook is primarily focused on stating the business requirements and inter-bank rules for the operation of the Scheme. In addition to the Rulebook there are a number of key documents which enable the Scheme to become operational: 0.5.1 SEPA Data Model The complete data requirements for the operation of the Scheme are classifiable according to the SEPA Data Model which recognises the following layers: ? The business process layer in which the business rules and requirements are defined and the related data elements specified. ______________________________________________________________________________ 2 Following the accession of Romania and Bulgaria, the EU now comprises 27 Member States. In addition to the EU, EEA Member States and Switzerland, SEPA will also extend to cover the following territories that are considered to be a part of the EU in accordance Article 299 of the Treaty of Rome: Martinique, Guadeloupe, French Guiana, Reunion, Gibraltar, Azores, Madeira, Canary Islands, Ceuta and Melilla and Aland Islands.: Martinique, Guadeloupe, French Guiana, Reunion, Gibraltar, Azores, Madeira, Canary Islands, Ceuta and Melilla and Aland Islands. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 8 ? 19 June 2007 ? The logical data layer which specifies the detailed datasets and attributes and their inter-relationships. ? The physical data layer which specifies the representation of data in electronic document formats and messages. This Rulebook focuses on the business process layer and appropriate elements of the logical layer. Further required elements of the logical layer and the specification of the physical layer, including message standards are specified in the SEPA Data Model (reference [6]). The SEPA Data Model (reference [6]) describes and specifies in detail the three layers and inter alia their application to the Scheme. The SEPA Data Model constitutes a binding supplement to the Rulebook. The Implementation Guidelines (reference [9]) are also a binding supplement to the Rulebook. 0.5.2 PE-ACH/CSM Framework The PE-ACH/CSM Framework document (reference [2]) establishes the principles on which CSMs will support the schemes for credit transfer and direct debit on the basis of separation between the Scheme and relevant CSMs. The document referred to provides an update and clarification of the PE-ACH concept, building on work already completed by the EPC. The Roadmap 2004-2010 enshrined the principle that scheme and infrastructure should be separated and therefore the PE-ACH/CSM Framework forms an important complementary document. 0.5.3 Adherence Agreement The Adherence Agreement, to be signed by Participants, is the document which binds Participants to the terms of the Rulebook. The text of the Adherence Agreement is annexed. It might be necessary to adjust the Adherence Agreement depending upon the final text of the EPC document(s). The Rulebook and Adherence Agreement entered into by Participants together constitute a multilateral contract among Participants and the EPC. Chapter 6 describes the rules of SEPA Scheme Management, including rules in relation to adherence to the Scheme. Chapter 6, together with Chapter 5, sets out the rules and procedures for joining the Scheme. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 9 ? 19 June 2007 1 VISION & OBJECTIVES 1.1 Introduction The Scheme provides a set of inter-bank rules, practices and standards which will allow the banking industry in SEPA to offer a core and basic direct debit product to customers. As a result, all core direct debits, whether ?domestic? or ?cross-border?, will be provided on the same essential conditions and modalities throughout SEPA. 1.2 Vision a. The Scheme establishes a set of inter-bank rules practices and standards for direct debits in euro in SEPA. b. It thereby provides the basis for a direct debit product which will provide customers of bank-provided payment services (individuals, small and medium sized enterprises, corporates and government entities) with a straightforward instrument possessing the necessary reliability, predictable execution time and reach. c. Direct debits within SEPA will be able to be processed under the conditions of this Scheme. d. SEPA Direct Debits will be fully automatable and based on the use of open standards and the best practices of straight through processing (?STP?) without manual intervention. e. The EPC considers that meeting the basic needs of SEPA will be best achieved by defining and implementing an entirely new direct debit scheme based on a new set of standards and an EU-wide legal framework. This is considered to be a faster and less complex way forward rather than setting out to harmonize the numerous existing national schemes. The new Scheme will co-exist with existing national schemes during a transitional period. 1.3 Objectives a. To establish a scheme with no disparities between national and cross-border direct debits and with full Reachability throughout SEPA. b. To meet the actual and future needs of parties via a simple, well-controlled, fully dematerialised, secure, reliable, transparent and cost-efficient instrument. c. To enable the achievement of best-in-class security, low risk and improved cost efficiency for all participants in the payments process. d. To allow the further development of a healthy and competitive market for payment services. e. To improve the current level of service provided to customers towards the highest existing service level experienced in Europe today. f. To provide a framework for the removal of local inhibitors and the harmonisation of standards and practices. g. To develop a core scheme that is flexible enough to be adapted to various kinds of future market requirements and processes e.g. Electronic Bill Presentment and Payment (?EBPP?) and electronic signatures. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 10 ? 19 June 2007 1.4 Binding Nature of the Rulebook Becoming a Participant in the Scheme will involve signing the Adherence Agreement. By signing the Adherence Agreement, Participants agree to respect the rules described in the Rulebook as the Rulebook sets out the liabilities and responsibilities of each Participant in the Scheme. Participants are free to choose between operating processes themselves, or using intermediaries or outsourcing (partially or completely) to third parties. However, outsourcing or the use of intermediaries does not relieve the Participants of the responsibilities defined in the Rulebook. The Rulebook covers in depth the main aspects of the inter-bank relationships linked to the Scheme. For the relationships between a Participant and its Customer, the Rulebook specifies the minimum requirements imposed by the Scheme. For the relationships between a Creditor and a Debtor, the Rulebook also specifies the minimum requirements of the Scheme. 1.5 Separation of the Scheme from the Infrastructure It is a key feature of the Scheme that it provides a single set of rules, practices and standards which are then operated by individual banks and potentially multiple infrastructure providers. Infrastructure providers include CSMs of various types and the technology platforms and networks that support them. Infrastructure is an area where market forces operate based on the decisions of banks. The result is that the direct debit instrument based on a single set of rules, practices and standards is operated on a fully consistent basis by CSMs (as defined in reference [2]) chosen by individual banks as the most appropriate for their needs. 1.6 Other Features of the Scheme ? The rights and obligations of Participants, and, as appropriate, their Customers, will be clear and unambiguous. ? Direct debit messages will use open, industry-recognised standards. ? The Scheme will ensure full interoperability between Participants. ? The rules will ensure that responsibility for risk management will be allocated to where the risk lies and that liability falls where the fault lies. ? Individual banks are free to innovate and satisfy customer needs in a competitive market place, as long as these innovations do not conflict with the Rulebook. 1.7 The Business Benefits of the Scheme 1.7.1 Advantages for and Expectations of Creditors For Creditors, the Scheme identifies all issuers of recurrent and one-off bills as potential Customers. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 11 ? 19 June 2007 The most important advantages offered by the Scheme to a Creditor are: a. A simple and cost-efficient way to collect Funds b. The ability to determine the exact date of Collection c. The certainty of payment completion within a predetermined time-cycle d. The opportunity to optimise cash-flow and treasury management e. Straightforward reconciliation of received payments f. The ability to automate exception handling such as: Returned, Rejected, or Refunded Collections and Reversals g. One payment instrument throughout SEPA for Creditors holding a bank account in SEPA h. The opportunity to collect Funds from Debtors through the use of a single payment instrument i. The reduction of administrative costs and the enhancement of security due to the optional use of digital signatures for signing Mandates, once electronic signatures become available. 1.7.2 Advantages for and Expectations of Debtors For Debtors, the Scheme caters for both businesses and private individuals as potential users. The most important advantages offered by the Scheme to a Debtor are: a. A simple means of paying bills, without the risk of late payment and its consequences b. The Debtor is easily reachable for Europe-wide business offers since the Scheme is a single, trusted payments instrument throughout SEPA for both national and SEPA Creditors. c. Straightforward reconciliation of debits on account statements d. The possibility to sign a Mandate on paper or in a fully-electronic way once electronic signatures become available. e. A fast and simple Refund procedure 1.7.3 Advantages for and Expectations of Banks The most important advantages offered by the Scheme to banks are: a. Processes are highly automated and cost-effective, with end-to-end dematerialisation b. The processing cycle is clear, transparent, reliable and as short as feasible c. Enable the proper management of liabilities and risks d. Risk mitigation in inter-bank Settlement and at inter-bank level in general e. Creditors must show evidence of properly executed Mandates whenever requested f. The Scheme enables the achievement of full STP of all transactions, including, with clear reference to the original transaction, Rejects, Returns, Refunds and Reversals SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 12 ? 19 June 2007 g. The Scheme is intended to create conditions which will allow each Participant to build products that can generate reasonable economic returns sufficient to ensure the safety, security, and risk integrity of the Scheme. h. Ease of implementation i. Use of open standards such as ISO BIC and European IBAN as bank and account identifiers j. Unambiguous identification of all SEPA Direct Debit Creditors k. Application of a uniform legal structure 1.7.4 Advantages for CSMs The separation of scheme from infrastructure will permit the operation of the Scheme by multiple CSMs, provided that the rules, practices and standards of the Scheme are fully met; the service providers may add AOS to the benefit of choice and competition (see section 2.4). 1.8 Harmonised Legislation It is a prerequisite for the launch of the Scheme that harmonised legislation is in place in all EU Member States where the euro is the official currency. For Participants from non-EU countries in SEPA, such legislation must be applicable to them, for example, as provided for under procedures of the EEA Joint Committee, or they must ensure that their national law is compatible and consistent with the new harmonised legislation. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 13 ? 19 June 2007 2 SCOPE OF THE SCHEME 2.1 Application to SEPA The Scheme is applicable within SEPA, as defined by the EPC. The current definition of SEPA encompasses all the EU member3 states2 together with Iceland, Liechtenstein, Norway, and Switzerland. 2.2 Nature of the Scheme A SEPA Direct Debit is a payment instrument governed by the Rulebook for making Collections in euro throughout SEPA from bank accounts designated to accept Collections. Transactions for the Collection of Funds from a Debtor?s account with a Debtor Bank are initiated by a Creditor via its bank (the Creditor Bank) as agreed between Debtor and Creditor. This is based on an authorisation for the Creditor and the Debtor Bank given to the Creditor by the Debtor for the debit of its bank account: this authorisation is referred to as the ?Mandate?. The Debtor and Creditor must each hold an account with a Participant located within SEPA. The Collections executed in accordance with the Rulebook are separate transactions from the underlying contract on which they are based. The underlying contract is agreed on between the Debtor and the Creditor. The Creditor Bank and the Debtor Bank are not concerned with or bound by such contract. They are only involved in the agreement with their respective Customers on the Terms and Conditions of the delivery of direct debit related services. The following key elements are included within the scope of the Scheme: A set of inter-bank rules, practices and standards for the execution of direct debit payments in euro within SEPA by banks adhering to the Scheme. The objective is to provide full electronic end-to-end STP processing of transactions. This will also apply to the various processes for exception handling like Rejects, Returns, Reversals, Refunds, Refusals and Revocations. Only electronic handling of Mandate information is permitted between banks. Between Debtor and Creditor, a Mandate can be exchanged in either paper or electronic form. The Scheme leaves room for competition between banks. It will allow banks and groups of banks to develop their own products and offer AOS (see section 2.4) based on the Scheme to their Customers to meet particular objectives. The Scheme gives full discretion to Debtors to accept or refuse a Mandate. 2.3 Recurrent and One-off Direct Debits The Scheme caters for both recurrent and one-off Collections. Recurrent direct debits are those where the authorisation by the Debtor is used for regular direct debits initiated by the Creditor. One-off direct debits are those where the authorisation is given to initiate only one single direct debit, authorisation which cannot be used for any subsequent transaction. ______________________________________________________________________________ 3 Change 07/001 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 14 ? 19 June 2007 There is no difference in the legal nature of these two types. 2.4 Additional Optional Services The Scheme recognises that individual Participants and communities of Participants will provide complementary services based on the Scheme so as to meet further specific Customer expectations. These are described as Additional Optional Services (?AOS?). The following two types of AOS are identified: 1. Additional Optional Services provided by banks to their customers as value-added services which are nevertheless based on the core payment schemes. These AOS are purely a matter for banks and their customers in the competitive space. 2. Additional Optional Services provided by local, national and pan-European communities of banks, such as the use of additional data elements in the UNIFI (ISO20022) XML Standards. Any community usage rules for the use of the SEPA core mandatory subset of the UNIFI (ISO20022) XML Standards should also be mentioned in this context, although they are not per se AOS. Other AOS may be defined, fore example relating to community-provided delivery channels for customers. Participants may only offer AOS in accordance with the following principles: 1. All AOS must not compromise interoperability of the Schemes nor create barriers to competition. The Scheme Management Committee should deal with any complaints or issues concerning these requirement brought to its attention in relation to compliance with the Rulebooks as part of its normal procedures, as set out in the Internal Rules. 2. AOS are part of the market space and should be established and evolve based on market needs. Based on these market needs, the EPC may incorporate commonly used AOS features into the Schemes through the change management processes set out in the Internal Rules. 3. There should be transparency in relation to community AOS. In particular, details of community AOS relating to the use of data elements present in the UNIFI (ISO20022) XML Standards (including any community usage rules for the SEPA core mandatory subset) should be disclosed on a publicly available website (in both local language(s) and English). These AOS are not further described in the Rulebook as they are generally to be considered as competitive offerings provided by both individual Participants and communities of Participants and are out of scope. 2.5 Currency The Scheme operates in euro. All transactions will be in euro at the inter-bank level in all process stages, including all exception handling, covering Rejects, Returns, Reversals, Refunds and revocations. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 15 ? 19 June 2007 The accounts of the Debtor and of the Creditor may be in euro or any other currency. Any currency conversion is executed in the Debtor Bank or Creditor Bank. Any such currency conversion, including the related risks for banks, is not governed by the Scheme. All Returns, Reversals, Refunds and revocations must be based on the exact euro amount of the originating direct debit. 2.6 Value Limits for Amounts At the inter-bank level, the Scheme does not limit the value of a transaction. 2.7 Reachability Participants commit to receive payments under the Scheme and to process them according to the rules of the Scheme. Reachability is a major assumption on which the Scheme is based and is therefore a key success factor for the Scheme. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 16 ? 19 June 2007 3 ROLES OF THE SCHEME ACTORS This chapter describes the roles of the actors in the Scheme. 3.1 The Actors The execution of a SEPA Direct Debit involves four main actors: ? The Creditor: receives the Mandate from the Debtor to initiate Collections, which are instructions to receive Funds from the Debtor Bank by debiting the account of the Debtor. On the basis of this Mandate, the Creditor collects the direct debits. ? The Creditor Bank: is the bank where the Creditor's account is held and which has concluded an agreement with the Creditor about the rules and conditions of a product based on the Scheme. On the basis of this agreement it receives and executes instructions from the Creditor to initiate the Direct Debit Transaction by forwarding the Collection to the Debtor Bank in accordance with the Rulebook. ? The Debtor Bank: is the bank where the account to be debited is held and which has concluded an agreement with the Debtor about the rules and conditions of a product based on the Scheme. On the basis of this agreement, it executes each Collection of the direct debit originated by the Creditor by debiting the Debtor?s account, in accordance with the Rulebook. ? The Debtor: gives the Mandate to the Creditor to initiate Collections. The Debtor?s bank account is debited in accordance with the Collections initiated by the Creditor. By definition, the Debtor is always the holder of the account to be debited. Creditor Banks and Debtor Banks are Participants in the Scheme. The operation of the Scheme also involves other parties indirectly: ? CSMs: Clearing and Settlement Mechanisms such as an automated clearing house or other mechanisms such as intra-bank and intra-group arrangements and bilateral or multilateral agreements between Participants. The term Clearing and Settlement Mechanism does not necessarily connote one entity. For example, it is possible that the Clearing function and the Settlement functions will be conducted by separate actors. The mechanisms will be as specified in the Framework for the Evolution of the Clearing and Settlement of Payments in SEPA ? Including the Principles for SEPA Scheme Compliance and Re-Statement of the PE-ACH Model referred to in section 0.5 (reference [2]). ? Intermediary Banks: Banks offering intermediary services to Debtor Banks and/or Creditor Banks, for example in cases where they are not themselves direct participants in a CSM. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 17 ? 19 June 2007 Another person may also be involved in a transaction which gives rise to a direct debit payment or may need to be mentioned in the data transmitted in connection with a direct debit payment: ? The Debtor Reference Party is a person in relation to whom a Debtor makes a payment. As an example, this Party can be a person on behalf of or in connection with whom the Debtor purports to make a payment, whether contractually obliged to do so or not, and who is identified to the Debtor Bank as such a person by the Debtor in the form required by the Debtor Bank. Reference in any payment instruction to a Debtor Reference Party does not imply that such party is a Debtor or otherwise a payer, or is contractually obliged or entitled in connection with any payment obligation. 3.2 The Four Corner Model The following diagram gives an overview of the contractual relationships and interaction between the main actors. FIGURE 1: 4-CORNER MODEL - CONTRACTUAL The actors will be bound together by a number of relationships, identified on the diagram by numbers: (1) The contractual relationships underlying the Scheme to which all Participants are bound through the Adherence Agreement. (2) Between the Creditor and the Debtor, regarding the requirement to make a payment. This will result in a Mandate, agreed between Creditor and Debtor, and signed by the Debtor. Whilst the data elements required for the Mandate are specified by the Scheme, the underlying relationship is outside the Scheme. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 18 ? 19 June 2007 (3) Between the Debtor Bank and the Debtor concerning the direct debit service to be provided and related Terms and Conditions. Provisions for this relationship are not governed by the Scheme, but will, as a minimum, cover elements relevant to the execution of a SEPA Direct Debit as required by the Scheme. (4) Between the Creditor Bank and the Creditor concerning the direct debit service to be provided and the related Terms and Conditions. Provisions for this relationship are not governed by the Scheme, but will, as a minimum, cover elements relevant to the execution of a SEPA Direct Debit as required by the Scheme. (5) Between the Creditor Bank and the Debtor Bank and the selected CSM concerning the Terms and Conditions of the services delivered. Provisions for these relationships are not governed by the Scheme, but will, as a minimum, cover elements relevant to the execution of a SEPA Direct Debit. Principles for the operation of such CSMs in relation to SEPA payment instruments are set out within the PE-ACH/CSM Framework (reference [2]). (6) As applicable, between the Creditor Bank and/or the Debtor Bank and any Intermediary Bank. Provisions for these relationships are not governed by the Scheme. This relationship is not illustrated above. 3.3 Governing laws The governing laws of the agreements in the four-corner model are as follows: ? The Rulebook is governed by Belgian law ? The Adherence Agreements are governed by Belgian law ? The Mandate must be governed by the law of one of the 29 SEPA countries 3.4 Relationship with Customers The Rulebook does not impose any requirement as to the Terms and Conditions between a Participant and its Customer, but Participants must ensure that the Terms and Conditions are effective so as to enable Participants to comply with their obligations under the Scheme. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 19 ? 19 June 2007 4 BUSINESS AND OPERATIONAL RULES This chapter describes the business and operational rules of the Scheme which must be observed by Participants and by other actors as necessary such that the Scheme can function properly. It also describes the datasets used in the Scheme, and the specific data attributes within these datasets. It is recognised that actors will also be required to establish complementary operational rules and data requirements in relation to the roles they perform and these will be defined separately by those actors. Datasets and attributes will be represented and transmitted using generally accepted, open, interoperable standards wherever possible (see section 0.5). 4.1 The Mandate The following diagram gives a schematic overview of the main actors and their interaction in the issuing of the Mandate. Debtor Creditor Creditor Bank Debtor Bank Mandates CSMs 1 2 3 3 Mandate-related data transmission Debtor Creditor Creditor Bank Debtor Bank Mandates CSMs 1 2 3 3 Mandate-related data transmission FIGURE 2: 4-CORNER MODEL - MANDATE The Mandate (1) is the authorisation and expression of consent given by the Debtor to the Creditor to allow such Creditor to initiate Collections for debiting the specified Debtor?s account and to allow the Debtor Bank to comply with such instructions, in accordance with the Rulebook. The Mandate may make reference to the Debtor?s rights under the Scheme which are described in Annex III. A Mandate may exist as a paper document which is physically signed by the Debtor. Alternatively, it may be an electronic document which is created and signed in a secure electronic manner. The Mandate whether in paper or electronic form, must contain the necessary legal text, and the names of the parties signing it. The requirements for the contents of the Mandate are defined in Section 4.7.2. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 20 ? 19 June 2007 The Mandate must always be signed by the Debtor as account holder or by a person in possession of a form of authorisation (such as a power of attorney). The Creditor may offer the Debtor the possibility to complete the Mandate by using an automated process, including the provision of an electronic signature. After signing, the Debtor must send the Mandate to the Creditor. The signed Mandate, whether paper-based or electronic, must be stored by the Creditor as long as the Mandate exists. Any paper Mandate must be stored intact by the Creditor according to national legal requirements. After cancellation, the Mandate must be stored by the Creditor according to the applicable national legal requirements and as a minimum as long as the Refund period defined for an Unauthorised Transaction. When paper-based, the data elements of the signed Mandate must be dematerialised by the Creditor without altering the content of the paper Mandate; when electronic, the data elements must be extracted from the electronic document without altering the content of the electronic Mandates. The Mandate- related data must be transmitted to the Creditor Bank (2), along with each Collection of a recurrent SEPA Direct Debit or with the one-off Collection. The Mandate-related data must be transmitted (3) by the Creditor Bank to the Debtor Bank in electronic form as part of the Collection in one single flow, using the selected CSM. The Debtor Bank may choose to offer AOS to the Debtor based on the Mandate content. The Creditor Bank may also choose to offer AOS to the Creditor based on the Mandate content. 4.2 Collections The following diagram gives a schematic overview of the main actors and their interaction in the process for handling Collections. FIGURE 3: 4-CORNER MODEL ? COLLECTIONS The Creditor must send a Pre-notification (0) to the Debtor according to the time frame defined in Section 4.3. After receiving the signed Mandate, the Creditor may initiate Collections (1). SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 21 ? 19 June 2007 The Creditor must conform to a stipulated period for the submission of Collections in advance of the Settlement Date. For the first of a recurrent series and for one-off direct debits, the minimum period between Due Date and the day on which the Debtor Bank must receive the Collection, is specified in Section 4.3 and is longer than for subsequent direct debits. For such Collections, the Collection must include information that identifies it as the first of a recurrent series under a new Mandate, or as a one-off transaction, in addition to the normal information required. For subsequent Collections in a recurrent series the minimum period is shorter and specified in Section 4.3. The Creditor Bank will send Collections to the Debtor Bank through a selected CSM (2). The relevant CSM will process the transaction, send the necessary Collections in accordance with the Settlement Cycle (3), and make the necessary arrangements for Settlement. The Debtor Bank must debit the Debtor?s account if the account status allows this. It may also choose to offer AOS (4) to its Debtors, but it is not obliged to do so by the Scheme. The Debtor has the right to instruct the Debtor Bank to completely prohibit his bank account to be debited for any Collection. The Debtor Bank must offer this service to its customers.4 The Debtor Bank may reject a Collection prior to Settlement, either for technical reasons or because the Debtor Bank is unable to accept the Collection for other reasons, e.g. account closed, Customer deceased, account does not accept direct debit, or because the Debtor wishes to refuse the debit. Accordingly, the point in time of acceptance in relation to a collection means the point in time determined by the relevant Debtor Bank as coinciding with the debit date, regardless of other steps taken under the Rulebook. The Debtor is entitled to obtain a Refund by request to the Debtor Bank during a period defined in the Rulebook in section 4.3. In such cases, the Debtor Bank must reimburse the Debtor, in the knowledge that it is fully authorised by the Scheme to obtain a Refund from the Creditor Bank. The Creditor Bank is authorised by the Scheme to recover this Refund from the Creditor and should have a right in the terms it has with the Creditor to recover amounts paid as Refunds. This Refund does not relieve the Debtor of its responsibility to resolve the disputed Collection with the Creditor, nor does the payment of a Refund by the Debtor Bank prejudice the outcome of such a dispute. The resolution of a disputed Collection is a matter to be agreed directly between the Debtor and the Creditor. For a recurrent direct debit, and in line with the Mandate, the Creditor may generate subsequent Collections. In turn, these will be submitted by the Creditor Bank to the CSM, which will then submit them to the Debtor Bank for debiting of the account of the Debtor. ______________________________________________________________________________ 4 Change 07/002 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 22 ? 19 June 2007 If a Creditor does not present a Collection under a given valid Mandate for a period of 18 months (starting from the date of the latest Collection presented, even if rejected, returned or refunded), the Creditor must cancel the Mandate and is no longer allowed to initiate Collections based on this cancelled Mandate. If there is a further requirement for a direct debit, a new Mandate must be established. The Rulebook does not oblige the Debtor Bank or the Creditor Bank to check the correct application of this rule; it is only an obligation for the Creditor. 4.3 Time Cycle of the Processing Flow The processing flow of a Collection is described as follows: ? Key dates for normal flow ? Key dates for exceptions ? Cut-off Times ? Time cycle An Inter-Bank Business Day is a day on which banks generally are open for inter-bank business. The TARGET Days Calendar is used to identify Inter-Bank Business Days. TARGET is the Trans-European Automated Real-time Gross Settlement Express Transfer System. To avoid frequent changes to TARGET closing days and thus the introduction of uncertainties into financial markets, a long-term calendar for TARGET closing days has been established and applied since 2002. It is published by the European Central Bank. A Customer Banking Business Day is a day on which banks in the relevant jurisdiction are generally open for business with Customers. A Calendar Day is any day of the year. 4.3.1 Standard Relation between Key dates The day on which Settlement takes place is called the Settlement Date. The day on which the Debtor?s account is debited is called the debit date. The Due Date (day ?D?) of the Collection is the day when the payment of the Debtor is due to the Creditor. It must be agreed on in the underlying contract or in the general conditions agreed between the Debtor and the Creditor. The general rule is that the key dates: Due Date, Settlement Date, and debit date are the same date. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 23 ? 19 June 2007 The general rule is achieved when the following assumptions are true: ? The Collection contains a Due Date in accordance with the Scheme rules ? The Debtor Bank and the Creditor Bank are able to settle on Due Date ? The CSM is open for Settlement on Due Date ? The Debtor Bank is willing to debit the Debtor?s account by the amount of the Collection on Due Date 4.3.2 Non-Standard Relation between Key Dates There are several conditions under which the standard relation between key dates cannot be respected, as follows: ? If for any reason, the Collection is delayed and has a Due Date that does not allow the Collection to be received by the Debtor Bank according to the rule described in Section 4.3.4, then this Due Date must be replaced by the earliest possible new Due Date by the Creditor or the Creditor Bank as agreed between them. At inter-bank level, a given Due Date may never be changed. ? If the Due Date falls on a day which is not an Inter-Bank Business Day, then the Settlement Date will be the next Inter-Bank Business Day. ? If the Settlement Date falls on a day which is not a Customer Banking Business Day in the country of the Debtor Bank, then the debit date will be the next Customer Banking Business Day. The Debtor Bank may debit the Debtor?s account with the value date = Settlement Date. ? If the Debtor Bank cannot debit the Debtor?s account on the Due Date (for example, insufficient Funds available or the need to carry out additional checks requested by the Customer as an AOS) the debit can be executed later. The Debtor Bank must always carry out the Return in time, in order to respect that the Returns can be settled on D+5 Inter-Bank Business Days at the latest. 4.3.3 Cut-off Times The Scheme only covers the time cycle expressed in days. Cut-off Times at specific times of the day must be agreed upon between the CSM and the Participants, as well as between the Creditor Banks and Debtor Banks and Creditors and Debtors. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 24 ? 19 June 2007 4.3.4 Time Cycle The diagram on the following page portrays the transaction as a set of steps in the order in which they occur, except for the detailed description of the Refund for an Unauthorised Transaction. It only shows the steps needed for the understanding of the time cycle. In the diagram, the following abbreviations are used: Legend: ______________ > Black ? data flows -----------> Red and/or broken line ? financial flows CB Creditor Bank DB Debtor Bank CSM Clearing and Settlement Mechanism *TD Counted in Inter-Bank Business Days (TARGET Days) **CD Counted in Calendar Days ***BD Counted in Customer Banking Business Days SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 25 ? 19 June 2007 Timeline Creditor Creditor Bank CSM Debtor Bank Debtor Not covered by the Scheme D-14CD** or as agreed between Creditor & Debtor D-14CD** D-5TD * D-2TD * D = due date or D+1TD* (If due date is not an Inter-Bank Business Day) D+5TD* Debit date + 6 weeks** at the latest Debit date + 6 weeks** at the latest +2TD* credit the Debtor Latest reception of subsequent Collection PT-04.07 Timing outside Scheme Timing outside Scheme Debit PT-04.09 debit the Debtor credit CB debit the DB credit Creditor Timing outside Scheme ***or D+1 BD if D is a local bank holiday credit the DB debit CB debit Creditor Timing outside Scheme Timing outside Scheme Latest returns PT-04.10 Latest refund request PT-04.15 credit the DB debit CB debit Creditor Timing outside Scheme Latest refund PT-04.16 Latest reception of first / one-off Collection PT-04.07 Timing outside Scheme Timing outside Scheme Reception of pre-notification Send pre- notification and collection PT-04.02 Earliest reception of any Collection PT-04.07 Settlement Latest settlement of returns Latest settlement of refunds Timing outside Scheme Signed Mandate PT-01.02 FIGURE 4: PROCESSING FLOW TIME CYCLES SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 26 ? 19 June 2007 The direct debit processes respect the following time-cycle rules: ? The Pre-notification must be sent by the Creditor at the latest 14 Calendar Days before the Due Date unless otherwise agreed between the Debtor and the Creditor. ? The Creditor is allowed to send the Collection to the Creditor Bank after the Pre-notification is sent to the Debtor, but not earlier than 14 Calendar Days before Due Date, unless otherwise agreed between the Creditor and the Creditor Bank. ? If a Collection is a first or a one-off Collection, the Debtor Bank must receive the Collection from the Creditor Bank via the CSM at the latest five Inter-Bank Business Days before Due Date and not earlier than 14 Calendar Days before Due Date. ? If a Collection is a subsequent Collection in a series of recurrent Collections, the Debtor Bank must receive the Collection from the Creditor Bank via the CSM at the latest two Inter-Bank Business Days before Due Date and not earlier than 14 Calendar Days before Due Date. ? The latest date for Settlement of the Returns is five Inter-Bank Business Days after the Settlement Date of the Collection presented to the Debtor Bank. ? The deadline for Refund requests of an authorised transaction by the Debtor to be received by the Debtor Bank is six weeks after the debit date. If the request for Refund concerns an Unauthorised Transaction (see definition in section 4.4 under Refunds), the period for making the request available to the Debtor Bank is longer and limited to one year after the debit date. This period could be reviewed if the PSD specifies another limit. The latest day for the Settlement of a Refund transaction is two Inter-Bank Business Days after these periods. Again the timing for debiting the Creditor Bank is agreed between the CSM and the Creditor Bank. The timing for debiting the Creditor is outside the scope of the Scheme. ? The Creditor Bank must ensure that Returns or Refunds that are presented for Settlement later than the latest day allowed by these rules are not processed by the Creditor Bank or by the CSM mandated to act as such and that the Debtor Bank is informed of this. ? Reversals may only be processed after Settlement and within the two Inter-Bank Business Days following the Due Date requested in the original Collection. Later presentations must not be processed by the Creditor Bank or CSMs mandated to act as such and the Debtor Bank must be so informed. The timing for crediting the Creditor for the Collections is outside of the scope of the Scheme. 4.3.5 Charging Principles Charges to Customers will be based on the shared principle such that the Creditor and Debtor are charged separately and individually by the Creditor Bank and Debtor Bank respectively. The basis and level of charges to Customers are entirely a matter for individual Participants and their Customers. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 27 ? 19 June 2007 4.4 Exception Handling The collection of a Direct Debit Collection is handled according to the time frame described in the Rulebook. If for whatever reason, any party can not handle the Collection in the normal way, the process of exception handling starts at the point in the process where the problem is detected. Direct Debit Transactions that result in exception processing are referred to as ?R-transactions?. R-transactions presented within the Scheme rules must be processed. The various messages resulting from these situations are handled in a standard manner at both process and dataset level. Rejects are Collections that are diverted from normal execution, prior to inter-bank Settlement, for the following reasons: ? Technical reasons detected by the Creditor Bank, the CSM, or the Debtor Bank, such as invalid format, wrong IBAN check digit ? The Debtor Bank is unable to make the Collection for a reason which is likely to be reasonably acceptable to Participants ? The Debtor made a Refusal request to the Debtor Bank. The Debtor Bank will generate a Reject of the Collection being refused Refusals are claims initiated by the Debtor before Settlement, for any reason, requesting the Debtor Bank not to pay a Collection. This Refusal must be handled by the Debtor Bank in accordance with the conditions agreed with the Debtor. If the Debtor Bank agrees to handle the claim prior to inter-bank settlement, the Refusal results in the Debtor Bank rejecting the associated Collection. (Note: In addition to this ability to refuse individual transactions, the Debtor has the right to instruct the Debtor Bank to prohibit any direct debits from his bank account). When handled after Settlement, this Refusal is referred to as a Refund claim. (See description underneath in the Refund section Returns are Collections that are diverted from normal execution after inter-bank Settlement and are initiated by the Debtor Bank. Reversals: When the Creditor concludes that a Collection should not have been processed a Reversal may be used after the Clearing and Settlement by the Creditor to reimburse the Debtor with the full amount of the erroneous Collection. The Rulebook does not oblige Creditor Banks to offer the Reversal facility to the Creditors. For Debtor Banks, it is mandatory to handle Reversals initiated by Creditors or Creditor Banks. Creditors are not obliged to use the Reversal facility but if they do so, a Reversal initiated by the Creditor must be handled by the Creditor Bank and the Debtor Bank. Reversals may also be initiated by the Creditor Bank for the same reasons. Debtor Banks do not have to carry out any checks on Reversals received. Revocations are requests by the Creditor to recall the instruction for a Collection prior to the acceptance by the Creditor Bank. This forms part of the bilateral agreement between Creditor and Creditor Bank and is not covered by the Scheme. Requests for cancellation are requests by the Creditor Bank to recall the instruction for a Collection prior to acceptance by the CSM. This forms part of the bilateral agreement between Creditor Bank and CSM and is not covered by the Scheme. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 28 ? 19 June 2007 Refunds are claims by the Debtor for reimbursement of a direct debit under the terms agreed by Debtors with their Debtor Bank. If the disputed Collection is not covered by a valid Mandate, the transaction is considered to be an Unauthorised Transaction. The claim must be sent to the Debtor Bank after Settlement and within the period specified above in section 4.3. The Debtor Bank has the right to receive compensation, called the Refund compensation, from the Creditor Bank for the related interest loss incurred by the Debtor Bank. See PT-04.16 for the detailed description. Rejects, Returns and Refunds of Collections must be cleared and settled via the CSM used for the Clearing and Settlement of the initial Collection, unless otherwise agreed between banks. A process for Reject, Return and Refund must be offered by any CSM which is to offer services relating to the Scheme. 4.5 Process Descriptions The naming conventions used in the following sections are described below: The descriptions are based on the concepts of Process (Section 4.5), Process-step (Section 4.6), Dataset (Section 4.7) and Attribute (Section 4.8): ? A Process is defined as the realisation in an end-to-end approach of the major business functions executed by the different parties involved ? A Process-step is defined as the realisation of each step of one process executed by the parties involved in that step ? A Dataset is defined as a set of attributes required by the Rulebook ? An Attribute is defined as specific information to be used in the Rulebook For facilitating the reading and the use of the Rulebook, structured identification-numbers are used as follows: Processes: PR-xx, where xx represents the unique sequence number Process-steps: PT-xx.yy, where yy is the unique sequence number of the Process-step inside Process xx Datasets: DS-xx, where xx represent the unique sequence number Attributes: AT-xx, where xx represents the unique sequence number The values used above are only intended as an identifier. In any series of sequence numbers some values might not be present, as during the development of the Rulebook, some items were deleted and the remaining items were not renumbered. The various processes and their steps are described with the aid of diagrams. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 29 ? 19 June 2007 The following processes constitute the Scheme: PR-01 Issuing the Mandate PR-02 Amendment of the Mandate PR-03 Cancellation of the Mandate PR-04 Collection of the Direct Debit Collection (covering both correct transactions and R-transactions arising from the processing of a Collection) PR-05 Reversal of a Collection on the initiative of a Creditor SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 30 ? 19 June 2007 4.5.1 Issuing the Mandate (PR-01) PT-01.01/02 The process for issuing and signing a Mandate is handled between the Creditor and the Debtor. It can be executed in a paper-based process (PT-01.01) or, by an electronic process (PT-01.02) PT-01.03 After acceptance by the Creditor, the Creditor must dematerialise the Mandate-related information, archive the document according to legal regulations for a period of time which is as a minimum as long as the Refund period defined for an Unauthorised Transaction and send the information on the Mandate to the Creditor Bank, as part of each Collection, as described in PT-04.03 (see section 4.5.4). PT-01.06 After PT-04.07, the Debtor Bank (optionally) may use this information for AOS for the Debtor (see section 4.5.4). Creditor Creditor Bank Clearing and Settlement Debtor Bank Debtor see PR-04 PT01.01 Issuing of paper Mandate OR PT01.03 Archiving & dematerialisation PT04.03 Send Mandate with each instruction PT04.07 Send Mandate with each instruction PT01.06 AOS PT01.02 Electronic Mandate FIGURE 5: PR01 - ISSUING THE MANDATE SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 31 ? 19 June 2007 4.5.2 Amendment of the Mandate (PR-02) PT-02.01 The amendment of the Mandate is handled between the Creditor and the Debtor. AT-24 (in Section 4.8) contains the list of circumstances for amendment of a Mandate. PT-02.02 After acceptance by the Creditor, the Creditor must dematerialise the amended Mandate, archive the document, and send the information on the Mandate to the Creditor Bank as part of the next Collection, as described in PT-04.03. Creditor Creditor Bank Clearing and Settlement Debtor Bank Debtor PT02.01 Mandate amendment PT02.02 Dematerialisation & archiving PT04.03 Forward Mandate data as part of the Collection PT04.07 Forward Mandate data as part of the Collection AOS see PR-04 FIGURE 6: PR02 - AMENDMENT OF THE MANDATE SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 32 ? 19 June 2007 4.5.3 Cancellation of the Mandate (PR-03) PT-03.01 The cancellation of the Mandate is carried out between the Creditor and the Debtor without the involvement of either of their banks. PT-03.02 The archiving of the document confirming the cancellation is done by the Creditor. PT-03.03 The cancellation of the Mandate may be forwarded in the last Collection initiated by the Creditor under the Mandate involved in the cancellation, as described in PT-04.03. Creditor Creditor Bank Clearing and Settlement Debtor Bank Debtor PT03.01 Making up cancellation PT03.02 Archiving PT03.03 Forward cancellation with Collection see PR-04 PT04.03 Send Mandate with each instruction PT04.07 Send Mandate with each instruction FIGURE 7: PR03 - CANCELLATION OF THE MANDATE SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 33 ? 19 June 2007 4.5.4 Collection of the Direct Debit Transaction (PR-04) This process covers both correct transactions and R-transactions arising from the processing of a Collection. PT-04.01 The Creditor generates the data for the Collection of the transactions. PT-04.02 The Creditor pre-notifies the Debtor of the amount and date on which the Collection will be presented to the Debtor Bank for debit. PT-04.02bis The Debtor may instruct a Refusal to the Debtor Bank. PT-04.03 The Creditor sends the Collections, including the Mandate-related information, to the Creditor Bank. PT-04.04 The Creditor Bank Rejects some Collections received from Creditors. PT-04.05 The Creditor Bank sends the Collections to the CSM. PT-04.06 The CSM Rejects some Collections received from the Creditor Bank PT-04.07 The CSM sends the Collections to the Debtor Bank in accordance with the Settlement Cycle. PT-04.08 The Debtor Bank Rejects some Collections before Settlement. PT-04.09 The Debtor Bank debits the Debtor?s account with the amount of the transaction. PT-04.10 The Debtor Bank sends the returned Collection back to the CSM after Settlement. PT-04.11 The CSM sends the returned Collection back to the Creditor Bank. PT-04.12 The Creditor Bank debits the Creditor with the amount of the returned Collection. PT-04.13 The Creditor must handle the disputed Collection with the Debtor, without involvement of the banks. PT-04.15 If a transaction is disputed, the Debtor may instruct his bank to reimburse the debited amount for a Refund. PT-04.16 The Debtor Bank credits the Debtor?s account and sends the Refund messages to the CSM. PT-04.17 The CSM sends the Collection Refunds to the Creditor Bank. PT-04.18 The Creditor Bank debits the Creditor with the amount of the Refunded Collections. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 34 ? 19 June 2007 PT-04.19 The Creditor must handle the disputed Collection directly with the Debtor, without involvement of the banks. PT-04.20 The Debtor initiates a request for a Refund (after the six week Refund period) for an Unauthorised Transaction. PT-04.21 The Debtor Bank acknowledges the request for Refund and requests a Mandate copy from the Creditor Bank. PT-04.22 The Creditor Bank forwards the request for Refund to the Creditor. PT-04.23 The Creditor investigates the request for Refund and sends a copy of the Mandate to the Debtor Bank. PT-04.24 The Debtor Bank sends the Refund of an Unauthorised Transaction to the CSM. PT-04.25 The CSM sends the Refund of an Unauthorised Transaction to the Creditor Bank. PT-04.26 The Creditor Bank debits the Creditor with the amount of the refunded Unauthorised Transaction. PT-04.27 The Creditor handles the dispute of a Refund for an Unauthorised Transaction. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 35 ? 19 June 2007 Creditor Creditor Bank Clearing and Settlement Debtor Bank Debtor PT04.02 Pre-notify the Debtor PT04.06 Reject some Collections PT04.07 Send the Collections PT04.04 Reject some Collections PT04.03 Send the Collections PT04.10 Send returned Collection PT04.05 Send the Collections PT04.09 Debit the Debtor PT04.01 Collect information for Collection A B PT04.08 Reject some Collections PT04.02 bis Initiate refusal PT01.03 PT02.02 PT03.02 FIGURE 8: PR04 - COLLECTION OF DIRECT DEBIT (1) SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 36 ? 19 June 2007 Creditor Creditor Bank Clearing and Settlement Debtor Bank Debtor PT04.11 Send returned/rejected Collection PT04.19 Handle dispute with Debtor PT04.18 Debit Creditor for refunded Collections PT04.17 Send refunded Collection PT04.16 Send refunded Collection & credit Debtor PT04.15 Instruct refund of the Collection PT04.13 Handle dispute with Debtor PT04.12 Debit creditor for returned/rejected Collections A B PT04.20 Request for refund for an unauthorised transaction PT04.23 Investigation and provision of copy of the Mandate PT04.24 Settlement for refund of an unauthorised transaction PT04.27 Dispute handling of refund for an unauthorised transaction PT04.21 Acknowledge the request PT04.22 Forward the request PT04.25 Settle the refund PT04.26 Debit creditor for refunded unauthorised collections FIGURE 9: PR04 - COLLECTION OF DIRECT DEBIT (2) SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 37 ? 19 June 2007 4.5.5 Reversal of a Direct Debit Transaction (PR-05) PT-05.01 The Creditor initiates Reversal transactions of settled Collections. PT-05.02 The Creditor Bank submits Reversal transactions to the CSM for transactions that were collected by the Creditor by mistake. PT-05.03 The CSM forwards Reversal transactions of settled Collections to the Debtor Bank. PT-05.04 The Debtor Bank credits the Debtor with the amount of the Reversal transaction of a settled Collection, without any obligation to check if the original Collection has been debited from the Debtor?s account or has been rejected, returned or refunded. Creditor Creditor Bank Clearing and Settlement Debtor Bank Debtor PT05.01 Initiate Reversal PT05.04 Credit Debtor account PT05.02 Send Reversals PT05.03 Forward Reversals FIGURE 10: PR05 - REVERSAL OF A TRANSACTION SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 38 ? 19 June 2007 4.6 Description of the Process Steps 4.6.1 Issuing of the Mandate (PR-01) PT-01.01 ? The Issuing/Signing of a Paper Mandate Description The initiative to issue a Mandate may be taken by either the Creditor or the Debtor. The Creditor must ensure that the Mandate document contains the mandatory legal wording and the mandatory set of information as specified in dataset DS-01: The Mandate. The Mandate document is standardised in content but not in layout. The Debtor must ensure that the mandatory set of information is filled in on the Mandate document. The Debtor must sign the Mandate and give it to the Creditor. The Creditor is bound by his agreement with the Debtor, in the presentation of the instructions for Collection. Starting day/time After Creditor registration and before Collection of the first Collection. Duration No limit Information Output The signed Mandate on paper PT-01.02 ? The Issuing/Signing of a Mandate Electronically Description To be included later. PT-01.03 ? Dematerialisation/Archiving of Mandates Description The Creditor dematerialises the paper Mandate. DS-02 describes the data to be dematerialised. The process of dematerialisation consists of the conversion of the written information on the paper Mandate into electronic data. It is strongly recommended that Creditors use proven techniques for this process, such as the double-keying of important information items, cross-checking between information items, etc. The paper version must be kept in a safe place during the existence of the Mandate. After cancellation, the Mandate must be stored by the Creditor according to the national legal requirements and as a minimum as long as the Refund period defined for an Unauthorised Transaction. The Creditor must send the information on the signed Mandates, after dematerialisation, to the Creditor Bank as part of each transaction based on this Mandate as described in PT04.03. Starting day/time On receipt of the signed Mandate by the Creditor. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 39 ? 19 June 2007 Information Input The Mandate data. Information Output The dematerialised Mandate dataset (DS-02). 4.6.2 Amendment of the Mandate (PR-02) PT-02.01 ? Mandate Amendment Handled Between Creditor and Debtor Description The amendment of the Mandate is agreed between the Creditor and the Debtor and may be necessary for various reasons. See the description of AT-24 in Section 4.8 for reasons. PT-02.02 ? Mandate Amendment Procedures Description The Creditor must dematerialise the Mandate, archive the document, and send the information on the amended Mandate to the Creditor Bank if the changes in the Mandate are of any concern for the Creditor Bank or for the Debtor Bank, as part of the next Collection. The Creditor or the Debtor can amend the Mandate at any time. The amendments of the Mandate that are of concern for the Creditor Bank or for the Debtor Bank, are the following : ? The Creditor needs to change the unique Mandate reference of an existing Mandate because of internal organisational changes ( restructuring) ? The Creditor identity has changed due to the merger, acquisition, spin-off or organisational changes (which implies a new identifier of the Creditor) ? The Creditor has changed his name ? The Debtor decides to use another account within the same bank or in another bank The Creditor and the Debtor are responsible and liable for the amendment of the Mandate characteristics for which they are responsible should one or more of these characteristics change during the lifetime of the Mandate. The Creditor must issue a direct debit respecting the time-cycle of the first direct debit, when the cause of the amendment is that the Debtor decides to use another account in another bank Information Output The Mandate amendment data sent by the Creditor as part of the next Collection. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 40 ? 19 June 2007 4.6.3 Cancellation of the Mandate (PR-03) PT-03.01 ? Mandate Cancellation between Creditor and Debtor Description The cancellation of the Mandate is carried out by the Creditor and the Debtor without the involvement of either of their banks. PT-03.02 ? Cancellation /Archiving by Creditor Description The archiving of the cancellation is executed by the Creditor. After the cancellation of the Mandate, the signed paper Mandate must be stored by the Creditor according to the applicable national legal requirements and as a minimum for a period as long as the Refund period defined for an Unauthorised Transaction. 4.6.4 Collection of the Direct Debit Transaction (PR-04) PT-04.01 ? Generation of Collection Data by Creditor Description The Creditor prepares the Collection of Direct Debit Transactions to be sent to the Creditor Bank. The data to be used in the Collection is described in DS-03. 5 Starting day/time At any date Duration No limits Information Output The instruction for Collection, containing the data of DS-03. ______________________________________________________________________________ 5 Change 07/004 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 41 ? 19 June 2007 PT-04.02 ? Creditor to Debtor Pre-notification Description Prior to the sending of the Collection to the Creditor Bank, the Creditor notifies the Debtor of the amount and date on which the Collection will be presented to the Debtor Bank for debit. This notification may be sent together with or as part of other commercial documents (e.g. an invoice) or separately. The Pre-notification could also include: ? The schedule of payments for a number of repetitive direct debits for an agreed period of time ? An individual advice of a Collection for collection on a specified Due Date The Creditor and the Debtor may agree on another time-line for the sending of the pre-notification.6 Duration No limit. Closing day/time The Pre-notification must be sent by the Creditor at the latest 14 Calendar Days before the Due Date unless another time-line is agreed between the Debtor and the Creditor. Rules applied: See Section 4.3 for the general time cycle of the direct debit process. ______________________________________________________________________________ 6 Change 07/003 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 42 ? 19 June 2007 PT-04.02 bis ? Debtor May Instruct Refusal to Debtor Bank Description The Debtor may instruct the Debtor Bank to refuse any future Collection, based on information received through Pre-notification. This Refusal must be handled by the Debtor Bank, but only in accordance with the conditions sent to the Debtor : ? If the Debtor Bank agrees to handle the claim prior to inter-bank Settlement, the Refusal results in the Debtor Bank rejecting the associated Collection: see PT-04.08. ? When handled after inter-bank Settlement, the Refusal is handled as a Refund claim: see PT-04.16. Starting day/time After the receipt of the Pre-notification by the Debtor or any other source of information about the Collection to be presented by the Creditor. Duration For the Scheme: allowed up to and including Due Date , but the precise time limit is to be agreed between the Debtor Bank and the Debtor PT-04.03 ? Creditor Sends Collection Data to Creditor Bank, Including the Mandate- Related Information Description The Creditor prepares one or more Collections to send to its bank, according to their bilateral agreement. The Mandate-related information for new Mandates or amended Mandates (if needed, see PR-02) must be sent as part of all the Collections. The cancellation-code, indicating that this is the last Collection (see PR-03) under the Mandate, due to the cancellation of the Mandate, must also be sent as part of the last Collection. The Creditor Bank is responsible towards all actors for the good organisation of this process with Creditors. The Creditor must transmit the mandatory set of information as described in detail in DS-03. Starting day/time 14 Calendar Days before closing day, unless defined in a bilateral agreement between the Creditor Bank and the Creditor, in line with the Scheme time cycle. The Creditor is allowed to send the Collection to the Creditor Bank once the Mandate has been signed and when the Pre-notification has been sent in time (see PT-04.02) to the Debtor. The Creditor Bank must inform the Creditor about the Cut-off Time and time-cycles to be respected for the Collection of first/one-off Collections and for the collection of subsequent Collections (see Section 4.3). Duration 14 Calendar Days unless otherwise agreed between the Creditor Bank and the Creditor. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 43 ? 19 June 2007 Closing day/time At the latest on D-2 Inter-Bank Business Days for a recurrent Collection in order to allow the CSM used by the Creditor Bank to forward the Collection to the Debtor Bank on D-2 Inter-Bank Business Days at the latest. At the latest on D-5 Inter-Bank Business Days for a first or one-off Collection in order to allow the CSM used by the Creditor Bank to forward the Collection to the Debtor Bank on D-5 Inter-Bank Business Days at the latest. Information Input The instruction for Collection, containing the data of DS-03. Information Output The instruction for Collection, containing the data of DS-03. PT-04.04 Reject of Collections Containing Errors Description The Creditor Bank must check the syntax of the instructions on receipt of the File. If the Creditor Bank detects syntax errors in the instructions received, the instructions involved will be sent back to the Creditor for correction. The Creditor can make the necessary corrections and inject the same instructions in another File. Starting day/time The day of receipt of the instructions from the Creditor, or in the following days as agreed between the Creditor Bank and the Creditor. Information Input The instruction for Collection containing the data of DS-03. Information Output The message for rejection of a Collection containing the data of DS-05. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 44 ? 19 June 2007 PT-04.05 ? Creditor Bank Sends Collections to the CSM Description Based on the Collections received from the Creditor, the Creditor Bank must send the Collections containing the mandatory information to the CSM, as described in DS-04. If the Collections are to be presented to the Debtors with an account to be debited in the Creditor Bank (in-house traffic), the Creditor Bank is allowed to inject these instructions in the debiting process-step at the same day as for instructions sent to the Creditor Bank (in its capacity as a Debtor Bank) by another Creditor Bank. Starting day/time After process step PT04.03. Duration No limit Closing day/time D-2 Inter-Bank Business Days at the latest for recurrent Collections in order to allow the CSM used by the Creditor Bank to forward the Collection to the Debtor Bank on D-2 Inter- Bank Business Days at the latest. D-5 Inter-Bank Business Days at the latest for first and one-off Collections in order to allow the CSM used by the Creditor Bank to forward the Collection to the Debtor Bank on D-5 Inter-Bank Business Days at the latest. In the case of late presentment by the Creditor, the Creditor Bank must replace, in agreement with the Creditor, the outdated Due Date by a new Due Date in order to respect the time-cycle requirements as defined in Section 4.3. Information Input The instruction for Collection, containing the data of DS-04. Information Output The instruction for Collection, containing the data of DS-04. PT-04.06 ? Rejection of Instructions by CSM to Creditor Bank Description The CSM uses the rule on the unique Scheme format for inter-bank Collections for the control of the instructions received from the Creditor Bank. It will reject instructions containing errors, returning such instructions to the Creditor Bank. Starting Day/time Date of the reception of the instructions from the Creditor Bank, or in the following days as agreed in the rules of the CSM. Information Input The instruction for Collection, containing the data of DS-04. Information Output The message for rejection of a Collection, containing the data of DS-05. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 45 ? 19 June 2007 PT-04.07 ? Collection Data is sent from CSM to the Debtor Bank Description The CSM, after having checked and accepted the Files containing the Collections, sends the Collections received from all the Creditor Banks to the Debtor Bank. The Settlement resulting from these Collections is executed on day D by crediting the Creditor Bank and debiting the Debtor Bank. The timing for crediting the Creditor for the Collections is outside of the scope of the Scheme. Starting day/time D-14 Calendar Days Closing day/time D-2 Inter-Bank Business Days at the latest for recurrent Collections. D-5 Inter-Bank Business Days at the latest for first and one-off Collections. Information Input The instruction for Collection, containing the data of DS-04. Information Output The instruction for Collection, containing the data of DS-04. PT-04.08 ? Debtor Bank Sends Rejected Collections back to the CSM Description See attribute AT-R3 for the description of the reasons for Reject and the corresponding values of the reason code. Starting day/time Day of reception. Closing day/time Before inter-bank Settlement. Information Input The instruction for Collection, containing the data of DS-04. Information Output The message for rejection of a Collection, containing the data of DS-05. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 46 ? 19 June 2007 PT-04.09 ? Debtor Bank Debits the Debtor Description The Debtor Bank debits the account of the Debtor for the amount of the instruction on the Due Date specified and makes the information on the direct debit executed available to the Debtor as agreed. Starting day/time Day D Duration 5 Inter-Bank Business Days. Closing day/time Day D + 5 Inter-Bank Business Days at the latest, in order to respect the time-cycle, where the Settlement of the Returns must take place at the latest on D+5 Inter-Bank Business Days. Information Input The instruction for Collection, containing the data of DS-04, according to the description of DS-06. Information Output The information to the Debtor. PT-04.10 ? Debtor Bank Sends Returned Collection Back to the CSM Description If for any reason which is likely to be reasonably acceptable to all Participants, the Debtor Bank cannot debit the account, the instruction must be returned to the CSM with the reasons for the Return. See AT-R3 described in section 4.8 for the definition of these reasons. The Debtor Bank sends the returned Collection back to the CSM The Scheme does not impose any obligations on the Debtor Banks to verify or otherwise check Collections received in respect of a Debtor?s account, such as checking for the existence of Mandates for the Creditor who presents the instructions. Debtor Banks may agree such obligations with Debtors outside the scope of the Scheme. Starting day/time Day D Duration 5 Inter-Bank Business Days Closing day/time Day D + 5 Inter-Bank Business Days at the latest in order to respect the time cycle where the Settlement of the Returns must take place at the latest on D + 5 Inter-Bank Business Days. Information Input The instruction for Collection, containing the data of DS-04. Information Output The message for Return of a Collection, containing the data of DS-05. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 47 ? 19 June 2007 PT-04.11 ? CSM Sends Rejected or Returned Collection Back to Creditor Banks Description The CSM sends the rejected or returned Collection back to the Creditor Bank. The Settlement takes place by debiting the Creditor Bank and crediting the Debtor Bank. Information Input The message for Reject/Return of a Collection, containing the data of DS-05. Information Output The message for Reject/Return of a Collection, containing the data of DS-05. PT-04.12 ? Creditor Bank Debits Creditor with Rejected or Returned Collection Description The Creditor Bank must debit the rejected and returned Collections to the Creditor only if the Creditor?s account has already been credited. If the account of the Creditor for whatever reason could not be debited, the unpaid Reject/Return becomes a credit risk for the Creditor Bank to be recovered from the Creditor, or the Creditor Bank must take the loss, as the Creditor Bank is not allowed to debit the Debtor Bank for the unpaid Reject/Return. Information Input The message for Reject/Return of a Collection, containing the data of DS-05. Information Output The information to the Creditor. PT-04.15 ? Debtor Requests Refund of Debited Amount Description The Debtor must instruct the Debtor Bank, stating one of the reasons included in the code list in section 4.8.34, to refund the Collection by making a credit transaction on the Debtor?s account for the amount of the Collection. The Debtor Bank is fully authorised by the Scheme to obtain a Refund from the Creditor Bank. This Refund does not relieve the Debtor of its responsibility to seek a resolution with the Creditor, nor does the payment of a Refund prejudice the outcome of the resolution. Starting day/time After the Debtor Bank has debited the Debtor?s account. Duration Six weeks Closing day/time Six weeks after the debit date. Information Input The information to the Debtor. Information Output The message for Refund of a Collection, containing the data of DS-05. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 48 ? 19 June 2007 PT-04.16 ? Debtor Bank Sends Collection Refund Instructions to the CSM Description The Debtor Bank must credit the Debtor?s account with the Original Amount of the initial Collection. The Debtor Bank sends the Collection Refund instruction to the CSM. The Debtor Bank has the right to receive compensation, called the Refund compensation, from the Creditor Bank for the related interest loss incurred by the Debtor Bank by the crediting of the Debtor?s account with value date = Due Date of the initial Collection. This compensation is a variable amount, being the interest calculated according to the average of the daily EONIA rates (published on a daily basis by the ECB), for the number of Calendar Days between the Settlement Date of the original Collection (Settlement Date is included in the number of days) and the Settlement Date of the Refund instruction by the CSM after presentation by the Debtor Bank (Settlement day is not included in the number of days). The Debtor Bank must recover this compensation from the Creditor Bank by specifying the compensation amount in AT-R6 in the DS-05 for Refund. Starting day/time Debit date. Duration Six weeks + 2 Inter-Bank Business Days Closing day/time Debit date + six weeks + 2 Inter-Bank Business Days Information Input The message for Refund of a Collection, containing the data of DS-05. Information Output The message for Refund of a Collection, containing the data of DS-05. PT-04.17 ? CSM Sends Collection Refund Instructions to Creditor Bank Description The CSM sends the Collection Refund instructions to the Creditor Bank. The Settlement is executed by crediting the Debtor Bank and debiting the Creditor Bank for the initial amount of the Collection and for the Refund compensation calculated by the Debtor Bank. Starting day/time After PT-04.16 Duration Six weeks Closing day/time Debit date + six weeks + 2 Inter-Bank Business Days Information Input The message for Refund of a Collection, containing the data of DS-05. Information Output The message for Refund of a Collection, containing the data of DS-05. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 49 ? 19 June 2007 PT-04.18 ? Creditor Bank Debits Creditor with Amount of Refunded Collections Description The Creditor Bank must debit the account of the Creditor for the amount of the instructions received for Refund. For the recovery of the Refund compensation, the Creditor Bank must make his own arrangements with the Creditor. The date for this debit is out of scope of the Scheme. This implies that a Creditor may be obliged by the Creditor Bank to maintain his account in the Creditor?s Bank after the termination of the relevant business relationship, for a certain period, in order to be able to honour these Refund transactions. If the account of the Creditor for whatever reason could not be debited, the unpaid Refund becomes a credit risk for the Creditor Bank to be recovered from the Creditor, or the Creditor Bank must take the loss, as the Creditor Bank is not allowed to debit the Debtor Bank for the unpaid Reject/Return. Starting day/time After PT04.17. Information Input The message for Refund of a Collection, containing the data of DS-05. PT-04.20 ? Debtor Initiates a Request for a Refund for an Unauthorised Transaction (after the six weeks Refund period) Description ? The Debtor is allowed to send a request to the Debtor Bank to Refund a Collection that was not authorised by him. This means that the Debtor considers that a valid Mandate does not exist. ? The Debtor must give a written claim (and available supporting evidence) to the Debtor Bank. Starting day/time After the six weeks Refund period applicable to any Collection. Duration Limited to one year after the debit date of the disputed Collection. This period could be reviewed if the Payment Services Directive specifies another limit. Information Input The details of the executed Collection Information Output The written claim (with the supporting evidence). SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 50 ? 19 June 2007 PT-04.21 ? Debtor Bank Acknowledges the Request for Refund ? Requests Mandate Copy from Creditor Description The Debtor Bank acknowledges the request to the Debtor and decides to accept or to reject the request. If accepted, the Debtor Bank must forward the claim (and supporting evidence) to the Creditor Bank, who must forward it to the Creditor. At the request of the Debtor Bank, the Creditor Bank receives a request from the Debtor Bank to obtain through the intermediary of the Creditor Bank a copy of a Mandate document. This request must specify the identifier of the Creditor and the unique Mandate reference. Starting day/time After PT-04.20 Duration 10 Calendar Days. Information Input The written claim (with the supporting evidence). PT-04.22 ? Creditor Bank Forwards the Request for Refund to the Creditor Description The Creditor Bank receives the claim (with the supporting evidence) from the Debtor Bank and forwards it to the Creditor. Starting day/time After PT-04.21. Duration Immediately after receipt of the request. Information Input Written claim (with supporting evidence). SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 51 ? 19 June 2007 PT-04.23 ? Creditor Investigates Request for Refund and Provides Mandate Copy Description The Creditor must evaluate the claims received, and provide a copy of the signed Mandate through the Creditor Bank to the Debtor Bank. After receipt of the request, the answer must be: ? Made available to the Debtor Bank within 10 Calendar Days ? Sent to the Debtor Bank through the Creditor Bank on paper or by using an electronic File for which a standard procedure needs to be defined Starting day/time On reception of the request for information. Duration 10 Calendar Days. Information Input The details in support of the claim made by the Debtor Information Output The copy of the signed Mandate PT-04.24 ?Debtor Bank Sends the Refund of an Unauthorised Transaction to the CSM Description After 30 Calendar Days, starting from the receipt of the claim by the Debtor Bank, the Debtor Bank is allowed to send the Refund of the direct debit via the CSM up to the Creditor Bank, if the copy of the signed Mandate is not received within 30 Calendar Days following the receipt of the claim by the Debtor Bank, or if the copy received does not constitute a valid justification for the Debtor Bank for refusing the Refund. The Debtor Bank credits the account of the Debtor for the amount of the Collection. The same Refund compensation as described in PT-04.16 may be recovered from the Creditor Bank by using the same rule. Starting day/time After the receipt of the copy of the signed Mandate from the Creditor, at the latest within 30 Calendar Days of the receipt of the request of the Debtor (PT-04.20). Duration 10 Calendar Days after PT-04.23. Information Input The written claim (with the supporting evidence) and the copy of the signed Mandate. Information Output The message for Refund of an unauthorised Collection, containing the data of DS-05. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 52 ? 19 June 2007 PT-04.25 ? CSM Sends the Refund of an Unauthorised Transaction to the Creditor Bank Description The CSM sends the Refund instructions back to the Creditor Bank. The Settlement is executed by crediting the Debtor Bank and debiting the Creditor Bank for the initial amount of the Collection and for the Refund compensation calculated by the Debtor Bank. Starting day/time After PT-04.24 Duration Normal Settlement Cycle. Information Input The message for an Unauthorised Transaction received from the Debtor Bank as described in DS-05. Information Output The message for an Unauthorised Transaction received from the Debtor Bank as described in DS-05. PT-04.26 ? Creditor Bank Debits Creditor with Amount of Refunded Unauthorised Transaction Description The Creditor Bank must debit the account of the Creditor for the amount of the instructions received for refund. For the recovery of the Refund compensation, the Creditor Bank must make his own arrangements with the Creditor. The date for this debit is out of scope of the Scheme. This implies that a Creditor may be obliged by the Creditor Bank to maintain his account in the Creditor?s Bank after the termination of the relevant business relationship, for a certain period, in order to be able to honour these Refund transactions. If the account of the Creditor, for whatever reason, could not be debited, the unpaid Refund becomes a credit risk for the Creditor Bank to be recovered from the Creditor, or the Creditor Bank must take the loss, as the Creditor Bank is not allowed to debit the Debtor Bank for the unpaid Reject/Return. Starting day/time After PT-04.25 Duration Out of scope of the Scheme Information Input The message for an Unauthorised Transaction received from the Debtor Bank as described in DS-05. PT-04.27 ? Creditor Handles the Dispute on a Refund for an Unauthorised Transaction Description If the Creditor does not agree with the Refund, he must contact the Debtor to handle the claim, outside the Scheme. Starting day/time After PT-04.26 Duration Out of scope of the scheme Information Input The message for an Unauthorised Transaction received from the Debtor Bank as described in DS-05. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 53 ? 19 June 2007 4.6.5 Payment of a Reversal (PR-05) PT-05.01 ? Creditor Initiates Reversal Transactions of Settled Transactions Description Reversals are instructions initiated by the Creditor after Settlement of the original Scheme instruction, when the Creditor notices that the instructions should not have been presented for one of the reasons described in section 4.8 AT-31. Starting day/time Date D = Due Date=Settlement date. Closing day/time Date D+2 Inter-Bank Business Days (to be counted end-to-end from PT-05.01 to PT-05.03 Information Output The Reversal instructions for the payment by the Creditor (DS-07) in order to allow the Creditor Bank to populate DS-07 on inter-bank level. The Reversal instruction contains the reference of the original Collection to allow the Debtor to make the reconciliation between the Reversal and the original Collection. PT-05.02 ? Creditor Bank Submits Reversal Transactions to the CSM and Debits the Creditor?s Account Description The Creditor Bank forwards Reversal transactions to the CSM. As the Reversal process is based on an exception handling and should stay an exceptional process, Creditor Banks should carefully monitor the use of this process by the Creditors, in order to avoid abuse of the exception handling system by the Creditor for reasons other than those set out in section 4.3.5 7 Starting day/time Date D, after PT-05.01 Closing day/time Date D+2 Inter-Bank Business Days (to be counted end-to-end from PT-05.01 to PT-05.03 inclusive) Information Input The Reversal instructions for the payment by the Creditor (DS-07). Information Output The Reversal instructions for the payment by the Creditor (DS-07). ______________________________________________________________________________ 7 Change 07/006 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 54 ? 19 June 2007 PT-05.03 ? CSM Forwards Reversal Transactions to Debtor Bank Description The CSM settles the Reversals (by debiting the Creditor Bank and crediting the Debtor Bank) and forwards Reversal transactions to the Debtor Bank. . Starting day/time Date D, after PT-05.02 Closing day/time Date D+2 Inter-Bank Business Days + the time needed for the CSM to handle (forward and settle) the Reversals (counted end-to-end from PT-05.01 to PT-05.03 inclusive). Information Input The Reversal instructions for the payment by the Creditor (DS-07). Information Output The Reversal instructions for the payment by the Creditor (DS-07). PT05.04 ? Debtor Bank Credits Debtor for Reversal Transaction Description The Debtor Bank credits the account of the Debtor. The Scheme does not oblige the Debtor Bank to check whether the original Collection has been debited to the Debtor?s account or has been rejected, returned or refunded. A Return of a Reversal is only possible for the reason provided in the attribute AT-R3 under the header: reasons for Return of a Reversal. 8 Starting day/time Date D, after PT05.03. Closing day/time Date D+n (unlimited for the Scheme) Information Input The Reversal instructions for the payment by the Creditor (DS-07). Information Output The information to the Debtor, according to the description of DS-06. ______________________________________________________________________________ 8 Change 07/005 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 55 ? 19 June 2007 4.7 Business Requirements for Datasets This section is focussed on stating the business requirements for the data elements used by the Scheme. 4.7.1 List of Sets of Data Requirements DS-01 The Mandate. DS-02 The dematerialised Mandate. DS-03 Customer to bank Collection DS-04 The inter-bank Collection DS-05 Direct debit Rejection, Return or Refund of a Collection or a Reversal. DS-06 Bank to Customer Collection DS-07 The inter-bank Reversal instruction for a Collection by the Creditor. DS-08 A means for inter-bank communication for dealing with exceptions. (To be defined). SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 56 ? 19 June 2007 4.7.2 DS-01 - The Mandate9 1 Your name Name of the debtor(s) Your address * 2 Your address Street name and number * 3 Postal code City * 4 Country Debtor identification code 5 Debtor identification code For business users: write any code number here which you wish to have quoted by your bank. 6 Creditor's name Creditor name ** 7 Creditor Identifier ** 8 Street name and number ** 9 Postal code City ** 10 Country Your account number * 11 Your account number Account number - IBAN Account number - IBAN * 12 SWIFT BIC Person on whose behalf 13 payment is made Debtor Reference Party: If you are making a payment in respect of an arrangement between {NAME OF CREDITOR} and another person (e.g. where you are paying the other person's bill) please write the other person's name here. If you are paying on your own behalf, leave blank. Person on whose behalf Debtor Reference Party: If you are making a payment in respect of an arrangement between {NAME OF CREDITOR} and another payment is made person (e.g. where you are paying the other person's bill) please write the other person's name here. If you are paying on your own behalf, leave blank. In respect of the contract ** 14 In respect of the contract: Identification number of the underlying contract ** 15 Description of contract Description of contract Type of payment * Recurrent payment or One-off payment 16 Type of payment Recurrent payment or One-off payment City or town in which you are Date * D D M M Y Y 17 signing Date City or town in which you are Location signing Please sign here * Please return to: Creditor's use only XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Signature(s) Signatures Identification number of the underlying contract Location For business users: write any code number here which you wish to have quoted by your bank. Unique mandate reference - to be completed by the creditor CREDITOR'S NAME & LOGO SEPA Direct Debit Mandate Creditor name Creditor Identifier Sreet name and number Postal code City Creditor's name ** Country Country Name of the debtor(s) Street name and number Postal code City By signing this mandate form, you authorise (A) {NAME OF CREDITOR} to send instructions to your bank to debit your account and (B) your bank to debit your account in accordance with the instructions from {NAME OF CREDITOR}. As part of your rights, you are entitled to a refund from your bank under the terms and conditions of your agreement with your bank. A refund must be claimed within 6 weeks starting from the date on which your account was debited. Your rights are explained in a statement that you can obtain from your bank. Please complete all the fields marked *. Your name * FIGURE 11: Illustration of a Direct Debit Mandate10 ______________________________________________________________________________ 9 Change 07/011 10 Creditor is to complete fields marked ** before supplying form to Debtor SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 57 ? 19 June 2007 Description The Mandate is defined in section 4.1. The Mandate document must contain the field identifiers, followed by the necessary blank space in which to fill the required data items. The identifiers on the Mandates must be in at least one and up to three languages of the country of residence of the Debtor, together with English if the Creditor is not able to determine with reasonable certainty the language of the Debtor in advance of the Mandate being created. It can be issued in a personalised way by the Creditor, already containing the data items specific for the Creditor. The design of Mandates must comply with the requirements set out below. The Scheme does not standardise the font or colours used in the Mandate, although the Creditor should always ensure that the Mandate information is clearly legible. Any specific detailed agreement articles for the Creditor/Debtor relationship must be placed outside the content of lines 1 to 16 as indicated on the illustration in Figure 11 (see ?Creditor?s use only? below). The reverse side of a Mandate must not set out any information that might be misunderstood by the Debtor to be part of the Mandate. The Scheme requires the Mandate to have a clear heading entitled ?SEPA Direct Debit Mandate? and the following attributes are to be contained within the Mandate in the line order shown: Mandate attributes: ? Unique Mandate reference ? Name of the Debtor (line 1) ? Address of the Debtor (line 2) ? Postal code/city of the Debtor (line 3) ? Debtor?s country of residence (line 4) ? Debtor identification code (line 5) ? Creditor company name (line 6) ? Creditor?s identifier (line 7) ? Creditor?s address street and number (line 8) ? Creditor?s postal code and city (line 9) ? Country of the Creditor (line 10) ? Debtor?s account number IBAN (line 11) ? The BIC code of the Debtor Bank (line 12) ? Name of the Debtor Reference Party (line 13) ? Underlying contract identifier (line 14) ? Contract description (line 15) ? Type of payment (line 16) ? Signature place and time (line 17) ? Signature(s) The name of these fields in order to assist the Debtor while filling in the Mandate, as presented in the illustration for the lines 1-17. The legal text in the heading (the authorisation and the Refund right) and for the two-signature field. For Creditors who include a Mandate within a publication i.e. magazine / journal the Mandate must still hold the above information. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 58 ? 19 June 2007 ?Creditor?s use only? box The only additional information permitted on the Mandate is an optional area for a Creditor?s ?Creditor?s Use only?, and the Creditor?s company logo. The Creditor?s ?Creditor?s Use only? area is provided solely for the internal use of the Creditor, may only be used after the signing by the Debtor for internal purposes, and must not be forwarded to the Creditor Bank in the dematerialised format of the Mandate. Attributes contained The attributes in the Mandate document must be completed, unless otherwise indicated: ? By the Creditor: 20 The identification Code of the SEPA Direct Debit Scheme, represented by the wording ?SEPA Direct Debit Mandate? ? By the Creditor: 01 The unique Mandate reference ? By the Debtor: 14 The name of the Debtor ? By the Debtor: 09 The address of the Debtor ? By the Debtor: 15 The name of the Debtor Reference party (optional) ? By the Debtor: 07 The account number (IBAN) of the account of the Debtor to be debited ? By the Debtor: 13 The BIC code of the Debtor Bank ? By the Debtor: 27 Debtor identification code (optional) ? By the Creditor: 02 The identifier of the Creditor ? By the Creditor: 03 The name of the Creditor ? By the Creditor: 05 The address of the Creditor ? By the Debtor: 25 The date of signing ? By the Debtor(s): 33 The signature(s) of the Debtor(s) ? By the Creditor: 21 The Transaction Type (only the values ?one-off? and ?recurrent? are allowed) ? By the Creditor: 08 The identifier of the underlying contract Guidelines for the design of the SEPA Direct Debit Mandate ? The standard heading ?SEPA Direct Debit Mandate? is mandatory ? The text on the Mandates must be in one or two or more languages of the country of the Debtor, plus in English if the Creditor is not able to determine with reasonable certainty the language of the Debtor ? The reverse side of the Mandate document may contain the same wording as the front side in a second language when this is appropriate. ? The Mandate must be clearly separated from any other text. No additional material can appear within the boundary of the Mandate. ? Clear instructions to the Debtor for the Return of the form must be shown on the face of the Mandate ? Creditor?s name, address and identifier number may be pre-printed or stamped on the Mandate Creditor?s responsibilities The Creditor must: ? ensure that all Mandates and literature in respect of its SEPA Direct Debit application complies with these guidelines and should approach its bank if it needs any clarification ? ensure that the Mandate is correctly completed prior to sending any dematerialised information to any other party SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 59 ? 19 June 2007 4.7.3 DS-02 - The Dematerialised Mandate Description This dataset contains all the mandatory attributes that must be registered in an electronic File to be kept by the Creditor, for the needs of the execution of the SEPA Direct Debit processes, like preparing the Collections according to DS-03. Attributes are mandatory unless otherwise indicated. Attributes contained ? 01 The unique Mandate reference ? 14 The name of the Debtor ? 09 The address of the Debtor ? 27 Debtor identification code (if present in DS-01) ? 15 The name of the Debtor Reference Party , if present in DS-01 ? 07 The account number (IBAN) of the Debtor to be debited ? 08 The identifier of the underlying contract ? 13 The BIC code of the Debtor Bank ? 02 The identifier of the Creditor ? 03 The name of the Creditor ? 05 The address of the Creditor ? 25 The date of signing of the Mandate ? 16 The placeholder for the electronic signature data (if applicable) 11 ? 21 The Transaction Type (only the values ?one-off? and ?recurrent? are allowed) ? 24 The reason for amendment of the Mandate (mandatory for amendments) ? 36 The signing date of the cancellation of the Mandate ______________________________________________________________________________ 11 Change 07/009 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 60 ? 19 June 2007 4.7.4 DS-03 ? Customer to Bank Collection Description: The Creditor must supply the following attributes. Attributes known by the Creditor Bank may be filled in by the Creditor Bank. This is a matter between the Creditor and the Creditor Bank. Attributes are mandatory unless otherwise indicated. Attributes contained ? 21 The transaction type (recurrent, one-off, first, last or Reversal) ? 10 The Creditor?s reference of the Collection ? 03 The name of the Creditor ? 05 The address of the Creditor (optional) ? 02 The identifier of the Creditor ? 04 The account number (IBAN) of the account of the Creditor to be credited for the Collection ? 14 The name of the Debtor ? 09 The address of the Debtor (optional) ? 27 Debtor identification code (optional) ? 15 The name of the Debtor Reference Party (if present in DS02) ? 07 The account number (IBAN) of the account of the Debtor to be debited for the Collection ? 13 The BIC code of the Debtor Bank ? 01 The unique Mandate reference ? 25 The date of f signing of the Mandate ? 16 The placeholder for the electronic signature data (if applicable) 12 ? 06 The amount of the Collection in euro ? 11 The Due Date of the Collection ? 24 The reason for amendment of the Mandate (mandatory if the Mandate has been amended) ? 18 The identifier of the original Creditor who issued the Mandate(mandatory if the Mandate has been taken over by another Creditor than the Creditor who issued the Mandate) ? 19 The unique Mandate reference as given by the original Creditor who issued the Mandate (mandatory if the Mandate has been taken over by another Creditor than the Creditor who issued the Mandate) ? 22 The Remittance Information from the Creditor to the Debtor such as the identification number of the underlying contract, the reference number of the Pre-notification, etc. (optional) Remarks These attributes reflect business requirements and do not prescribe fields in the logical or physical layers of the SEPA Data Model as defined in section 0.5 (reference [6]). ______________________________________________________________________________ 12 Change 07/009 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 61 ? 19 June 2007 4.7.5 DS-04 ? The Inter-bank CollectionError! Bookmark not defined. Description This dataset contains all the mandatory information items imposed by the Scheme for the Creditor Bank to send this instruction to the Debtor Bank through the CSM. It is also called ?Collection? in the Rulebook. This dataset will be present in the successive process steps of Process 04, starting from step 03 and must be forwarded by all actors up to the Debtor Bank. Attributes are mandatory unless otherwise indicated. Attributes contained ? 20 The identification code of the Scheme ? 21 The transaction type (recurrent, one-off, first, last) ? 10 The Creditor?s reference of the Collection ? 03 The name of the Creditor ? 05 The address of the Creditor (if present in DS-03) ? 02 The identifier of the Creditor ? 04 The account number (IBAN) of the account of the Creditor to be credited for the Collection ? 12 The BIC code of the Creditor Bank ? 14 The name of the Debtor ? 09 The address of the Debtor (if present in DS-03) ? 27 Debtor identification code (if present in DS-03) ? 15 The name of the Debtor Reference Party (if present in DS-03) ? 07 The account number (IBAN) of the account of the Debtor to be debited ? 13 The BIC code of the Debtor Bank ? 01 The unique Mandate reference ? 25 The date of signing of the Mandate ? 16 The placeholder for the electronic signature Data (if present in DS-03) ? 06 The amount of the Collection in euro ? 11 The Due Date of the Collection ? 26 The Settlement Date of the Collection ? 24 The reason for amendment of the Mandate (if present in DS-03)) ? 18 The identifier of the original Creditor who issued the Mandate (if present in DS-03) ? 19 The unique Mandate reference as given by the original Creditor who issued the Mandate (if present in DS-03) ? 22 The Remittance Information from the Creditor to the Debtor such as the identification number of the underlying contract, the reference number of the Pre-notification, etc. (if present in DS-03) ? 43 The Creditor Bank?s reference of the Collection Remarks These attributes reflect business requirements and do not prescribe fields in the logical or physical layers of the SEPA Data Model as defined in section 0.5 (reference [6]). SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 62 ? 19 June 2007 4.7.6 DS-05 ? The Message for the Rejection, Return or Refund of a Collection or a Reversal Description This dataset describes the content of a Reject, Return or Refund of a Collection or a Reversal. Attributes are mandatory unless otherwise indicated. Attributes contained ? R1 The type of ?R? message ? R2 Identification of the type of party initiating the ?R? message ? R3 The reason code for non-acceptance of the Collection ? R4 The Settlement Date for the Return or Refund instruction 13 ? R5 Specific reference of the bank initiating the Reject/Return/Refund for Reject/Return/Refund ? R6 The Refund compensation recovered by the Debtor Bank from the Creditor Bank (optional, applies only for a Refund) ? An exact copy of all the attributes of the received DS-04 which is being returned/rejected/refunded or the received DS-07, except attribute AT-31 of DS-07 which is being returned 14 Remarks These attributes reflect business requirements and do not prescribe fields in the logical or physical layers of the SEPA data model as defined in section 0.5 (reference [6]). ______________________________________________________________________________ 13 Change 07/012 14 Change 07/007 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 63 ? 19 June 2007 4.7.7 DS-06 - Bank to Customer Direct Debit Information Description This dataset contains the information on the Collection debited on the account of the Debtor to be made available to the Debtor. Communication of this information is mandatory. All the other attributes received in the inter-Bank Collection (DS-04) may be made available depending upon the terms of the agreement with the Debtor. Attributes contained ? 20 The identification code of the Scheme or a equivalent debit bank specific - SEPA Direct Debit based - direct debit product identification ? 03 The name of the Creditor ? 01 The unique Mandate reference ? 06 The amount of the Collection in euro ? 22 The Remittance Information from the Creditor to the Debtor such as the identification number of the underlying contract, the reference number of the Pre-notification, etc. (if present in DS-03) Remarks These attributes reflect only business requirements and the logical and physical representation is left to the Debtor Bank. 4.7.8 DS-07 ? The Inter-bank Reversal Instruction for the Collection Description This dataset contains all the Scheme-imposed attributes for the sending of a Reversal for a Collection. See also section 4.4 for the exact definition of a Reversal. Attributes are mandatory unless otherwise indicated. Attributes contained ? 04 The account number (IBAN) of the Creditor to be debited for the message ? 12 The BIC code of the Creditor Bank ? R2 Identification of the type of party initiating the ?R? message ? R4 The Settlement Date for the Reversal instruction ? 44 The amount of the Reversal in euro ? 31 The Reversal reason code ? 43 The Creditor Bank?s reference of the Collection ? R7 The specific reference of the Creditor Bank for the Reversal ? An exact copy of all the attributes of the original DS-04 which is being reversed. Remarks These attributes reflect business requirements and do not prescribe fields in the logical or physical layers of the SEPA Data Model as defined in section 0.5 (reference [6]). 4.8 Business Requirements for Attributes This section is focussed on stating the business requirements for the data elements used by the Scheme. 4.8.1 List of Attributes AT-01 The unique Mandate reference AT-02 The identifier of the Creditor AT-03 The name of the Creditor AT-04 The account number (IBAN) of the Creditor AT-05 The address of the Creditor SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 64 ? 19 June 2007 AT-06 The amount of the Collection in euro AT-07 The account number (IBAN) of the Debtor AT-08 The identifier of the underlying contract AT-09 The address of the Debtor AT-10 The Creditor?s reference of the Direct Debit Transaction AT-11 The Due Date of the Collection AT-12 BIC code of the Creditor Bank AT-13 BIC code of the Debtor Bank AT-14 The name of the Debtor AT-15 The name of the Debtor reference Party AT-16 The placeholder for the electronic signature data AT-18 The identifier of the original Creditor who issued the Mandate AT-19 The unique Mandate reference as given by the original Creditor who issued the Mandate AT-20 The identification code of the Scheme AT-21 The transaction type AT-22 The Remittance Information sent by the Creditor to the Debtor in the Collection AT-24 The reason for amendment of the Mandate AT-25 The date of signing of the Mandate AT-26 The Settlement Date of the Collection AT-27 Debtor identification code AT-31 The Reversal reason code AT-33 The signature(s) of the Debtor(s) AT-36 The signing date of the cancellation of the Mandate AT-43 The Creditor Bank?s reference of the Collection AT-44 The amount of the Reversal in euro. AT-R1 Type of ?R? message SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 65 ? 19 June 2007 AT-R2 Identification of the type of party initiating the ?R? message AT-R3 The reason code for non-acceptance AT-R4 The Settlement Date for the Return or Refund instruction (DS-05) or the Reversal instruction (DS-07) 15 AT-R5 Specific reference of the bank initiating the Reject/Return/Refund for Reject/Return/Refund. AT-R6 The Refund compensation recovered by the Debtor Bank from the Creditor Bank AT-R7 The specific reference of the Creditor Bank for the Reversal For each attribute specific for SEPA Direct Debit, there is a short description. Where appropriate there is also a related description of possible values (R-codes). The Rulebook does not define attribute format or field length, unless this is considered to be a business requirement. 4.8.2 AT-01 ?The Unique Mandate Reference Description: This reference identifies for a given Creditor, each Mandate signed by any Debtor for that Creditor. This number must be unique for each Mandate in combination with the identifier of the Creditor (AT-02 without the extension, called Creditor Business Code). The Creditor must organize himself in such a way that the delivery by any third party of the elements AT-01 + AT-02 without the extension, called Creditor Business Code, must allow indefinite retrieval of the Mandate data. The Rulebook does not limit the length of the attribute. It is recommended to Creditors to limit the length to a number of positions needed for managing the business of the Creditor as the attribute is used in several processes as a key to be entered to access files containing Mandate information. 4.8.3 AT-02 ? The Identifier of the Creditor Description: 1 The Creditor Identifier The identifier of the Creditor is unique in the Scheme: each identifier allows the identification of one Creditor without ambiguity in SEPA. A Creditor can use the ?Creditor Business Code? extension to identify different business activities. This identifier identifies a legal entity, or an association that is not a legal entity, or a person assuming the role of the Creditor. This identification must be stable in time, to enable the Debtor and the Debtor Bank to Return to the Creditor for Refund and complaints and to check the existence of a valid Mandate at the presentation of Collections by the Creditor. ______________________________________________________________________________ 15 Change 07/012 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 66 ? 19 June 2007 2 The Structure of the Identifier The Creditor identifier uses, wherever possible, information available in the public domain. Consequently, there is no need for a centralised database at Scheme level containing the identifiers of Creditors and other associated Creditor data. The Creditor identifier contains the following elements: a. The ISO country code (reference [4]) of the country where the national identifier of the Creditor, used in the national DD scheme, has been issued b. The check digit (covering a + d) c. The extension, called Creditor Business Code, allowing the Creditor to identify different business lines or different services. This extension is not needed to identify a Mandate in a unique way, but contains useful information for the Creditor and for the Debtor. It can be used by the Creditor in a flexible way, not being part of the real identifying part of the Creditor Identifier. Creditors can change it over time for business reasons. d. The country-specific part of the Creditor identifier being the national identifier of the Creditor, as used in the national DD scheme The identifier of the Creditor in the current DD scheme(s) contains, for most countries, a specific structure for the identification of the Creditors. The country-specific part is not unique on SEPA level, as the logic behind is totally different from country to country. These national rules might generate identical values for identifiers in different countries, which explains the necessity to add the ISO country code. The detailed specifications of this identifier are provided in detail in the SEPA Direct Debit Implementation Guidelines (reference [9]). 3 Implementation and Transition Period From the start of the Scheme in January 2008, the structure of the Creditor Identifier as defined above and specified in the Implementation Guidelines (reference [9]) will be used in the Scheme. For countries using a national identifier in current DD schemes which has insufficient capacity or is unsatisfactory for the intended use, they may define a new or adapted national identifier. 4 SEPA-wide use of the Creditor Identifier The advantage of the Scheme is that the Creditor can use a single identifier for the whole SEPA region. A Creditor Identifier based on an existing identifier from any SEPA country can be used in all SEPA countries. 4.8.4 AT-03 ? The Name of the Creditor Description: The name of the Creditor as forwarded to the Debtor. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 67 ? 19 June 2007 4.8.5 AT-04 ?The Account Number of the Creditor Description: The account number (IBAN) of the account of the Creditor ? To be credited for a Collection (DS-04) ? To be debited for a Reject, Return, Refund (DS-05) and Reversal (DS-07) of a Collection 4.8.6 AT-05 ? The Address of the Creditor Description: The address of the Creditor as forwarded to the Debtor 4.8.7 AT-06 ? The Amount of the Collection in Euro Description: The amount contains two parts, the first is expressed in euro, and the second is expressed in euro cents. The first part must be larger than or equal to zero euro, and equal to or not larger than 999.999.999 euro. The second part must be larger than or equal to zero euro cent, and smaller than or equal to 99 euro cents. The combined value of 0,00 euro (zero euro and zero euro cent) is not allowed. 4.8.8 AT-07 ? The Account Number of the Debtor Description: The account number (IBAN) of the account of the Debtor ? To be debited for a Collection (DS-04) ? To be credited for a Refund (DS-05) and for a Reversal (DS-07) of a Collection 4.8.9 AT-08 - The Identifier of the Underlying Contract Description: The identifier is defined in terms of layout and content by the Creditor. It may contain elements for self-control such as check-digits, but the other parties in the Scheme are not required to do any checking on this attribute. 4.8.10 AT-09 - The Address of the Debtor Description: The address of the Debtor as registered by the Creditor 4.8.11 AT-10 - The Creditor?s Reference of the Direct Debit Transaction Description: This number identifies for a given Creditor, each Collection transaction presented to the Creditor?s bank, in a unique way. This number will be transmitted in the whole process of the handling of the Collections from the Process-step PT-04.01, until the finality of the Collection. It must be returned in any exception handling process-step by any party involved. The Creditor cannot request for any other referencing information to be returned to him, in order to identify a Collection. The Creditor must define the internal structure of this reference; it can only be expected to be meaningful to the Creditor 4.8.12 AT-11 ? The Due Date of the Collection Description: See section 4.3.1 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 68 ? 19 June 2007 4.8.13 AT-12 - BIC Code of the Creditor Bank Description: See Chapter 7, Defined Terms in the Rulebook. 4.8.14 AT-13 - BIC Code of the Debtor Bank Description: See Chapter 7, Defined Terms in the Rulebook 4.8.15 AT-14 ? The Name of the Debtor Description: The name of the Debtor as registered by the Creditor. 4.8.16 AT-15 - The Name of the Debtor Reference Party Description: See section 3.1. Information relating to a Debtor Reference Party is included only for the purpose of assisting the Debtor and/or Creditor in managing their payments and is not required to be provided to or by the Debtor Bank and/or Creditor Bank for the purpose of effecting the payment to which the information relates. 4.8.17 AT-16 ? The Placeholder for the Electronic Signature Data Description: This is a placeholder for the transmission of the information needed for the use of an electronic signature. 4.8.18 AT-18 - The Identifier of the Original Creditor who issued the Mandate Description: The Creditor Identifier of the Creditor who issued the Mandate before the Mandate and its underlying contract was taken over by another Creditor. 4.8.19 AT-19 - The Unique Mandate Reference as given by the Original Creditor who issued the Mandate Description: In the case that a Mandate is taken over by another Creditor than the Creditor who initiated the Mandate, the original unique Mandate reference must be stored in this attribute. 4.8.20 AT-20 ?The Identification Code of the SEPA Direct Debit Scheme Description: This code allows instructions under the Scheme to be distinguished from those of other schemes. 4.8.21 AT-21 ? The Transaction Type Description: This attribute allows different types of transaction to be identified. Value range: 1. One-off Collection 2. Recurrent, not the first or the last Collection of the recurrent Collections 3. First Collection of the recurrent Collections 4. Last Collection of the recurrent Collections 5. Reversal SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 69 ? 19 June 2007 Remarks The values given for the codes are arbitrary for inventory purposes, not taken from an approved standard. 4.8.22 AT-22 ? The Remittance Information Sent by the Creditor to the Debtor in the Collection Description: This information is defined by the Creditor and must be communicated by the Debtor Bank to the Debtor when debiting the account of the Debtor. It is recommended that it contains a reference to the pre notification. It may also contain the identifier of the underlying contract. 4.8.23 AT-24 ? The Reason for Amendment of the Mandate Description: This code describes the reason for the amendment by the Creditor and/or the Debtor Value range: Change of AT-01 (the Creditor defining a new unique Mandate reference ) Change of AT-02 (new Creditor Identifier Information) Change of AT-03 (The Name of the Creditor) Change 1 of AT-07 ( the Debtor specifying another account to be debited in the same bank ) Change 2 of AT-07 (the Debtor specifying another account to be debited in another bank) Change of AT-01 and change of AT-02 4.8.24 AT-25 ? The Date of Signing of the Mandate Description: The date on which the Mandate was signed by the Debtor, as registered by the Creditor in the dematerialisation of the Mandate document. For Mandates migrated from other direct debit schemes, this attribute might not be available. In such case, it is up to communities of Participants to define how to provide a valid substitute for this date 4.8.25 AT-26 ? The Settlement Date of the Collection Description: The date on which the amount of the Collection is settled by the CSM. 4.8.26 AT-27 Debtor Identification Code Description: This attribute identifies the Debtor by specifying a code determined by the Debtor in agreement with the Creditor to facilitate the identification of the Debtor. May be specified by the Debtor, is optional for the Scheme. 4.8.27 AT-31 ? The Reversal Reason Code Description: This code explains the reason for the initiation of the Reversal for a Collection. It is defined by the Creditor who initiates the Reversal. It can be used by the Debtor Bank to inform the Debtor about the reason for the credit of the account of the Debtor. Value range: Duplicate entry Not specified 4.8.28 AT-33 ? The Signature(s) of the Debtor(s) Description: The signature(s) on paper of the Debtor(s) SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 70 ? 19 June 2007 4.8.29 AT-36 ? The Signing Date of the Cancellation of the Mandate Description: The date on which the cancellation of the Mandate was signed by the Debtor, as registered by the Creditor in the dematerialisation of the Mandate cancellation. 4.8.30 AT-43 ? The Creditor Bank?s Reference of the Collection Description: The reference of the Collection given by the Creditor Bank to be forwarded to the Debtor Bank. 4.8.31 AT-44 ? The Amount of the Reversal in euro Description: The amount for the reversal of a Collection. This amount cannot be different from the amount of the Collection involved, as partial reversals are not allowed. 4.8.32 AT-R1 ? Type of ?R? message Description: This code contains the code identifying the type of ?R? message Value range: Reject of a Collection Return of a Collection Refund of a Collection Return of a Reversal 4.8.33 AT-R2 - Identification of the type of party initiating the ?R? message Description: Types are: Creditor Bank (for Reject, Reversal) Debtor Bank (for Reject, Return) CSM (for Reject only) Creditor (for Reversal only) Debtor (for Refund only) SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 71 ? 19 June 2007 4.8.34 AT-R3 ? The Reason Code for Non-Acceptance (Reject, Return or Refund) Value range: The reasons for a Reject, Return or Refund by the Creditor Bank need not be specified, they are left to a bilateral agreement between Creditor?s bank and its Customer (Creditor). The reasons for a Reject by the CSM or the Debtor?s bank are as follows: ? Operation/transaction code incorrect, invalid File format ? Bank identifier incorrect (i.e. invalid BIC) ? Debtor deceased ? Account identifier incorrect (i.e. invalid IBAN) ? Account closed ? Direct debit forbidden on this account for regulatory reasons ? Account blocked ? Reason not specified ? Insufficient Funds ? Mandate data missing or incorrect ? No valid Mandate ? Regulatory reason ? Account blocked for Direct Debit by the Debtor ? Specific service offered by the Debtor Bank ? Duplicate collection The reasons for a Return by the Debtor?s bank are as follows: ? Account identifier incorrect (i.e. invalid IBAN or account number does not exist) ? Account closed ? Debtor deceased ? Direct debit forbidden on this account for regulatory reasons ? Duplicate collection ? Account blocked ? Reason not specified ? Insufficient Funds ? No valid Mandate ? Account blocked for Direct Debit by the Debtor ? Regulatory reason ? Specific service offered by the Debtor Bank The reasons for a Refund are as follows: ? Unauthorised Transaction ? Disputed authorised transaction The reasons for a Return of a Reversal are as follows: ? Account identifier incorrect (i.e. invalid IBAN or account number does not exist) SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 72 ? 19 June 2007 4.8.35 AT-R4 ? The Settlement Date for the Return or Refund instruction (DS-05) or the Reversal instruction (DS-07) 16 Description: The date on which the amount of the Return, Refund or Reversal is settled by the CSM. 4.8.36 AT-R5 ? Specific reference of the bank initiating the Reject/Return/Refund for a Reject/Return/Refund Description: The reference of the bank/CSM initiating the ?R? message. This reference must be provided by the party receiving the message when requesting any complementary information about the ?R? message 4.8.37 AT-R6 ? The Refund Compensation Recovered by the Debtor Bank from the Creditor Bank Description: The Refund compensation is calculated by the Debtor Bank for a Refund message sent to the Creditor Bank through the CSM, according to the rule described in PT-04.16. 4.8.38 AT-R7 ? The Specific Reference of the Creditor Bank for the Reversal Description: The reference of the Reversal forwarded by the Creditor Bank to the Debtor Bank. ______________________________________________________________________________ 16 Change 07/012 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 73 ? 19 June 2007 5 RIGHTS AND OBLIGATIONS OF ALL PARTICIPANTS 5.1 The Scheme The EPC may resolve to commence operation of the Scheme at a date that it determines at its sole discretion based on a decision taken in accordance with its Charter. However, in determining the Commencement Date, the EPC shall take into account progress made on the effective transposition of the Payment Services Directive into national law within each EEA jurisdiction. For Swiss Participants, the Scheme shall commence generally on a date when the EPC has received legal advice to the effect that Swiss Participants can comply with the undertakings set out in EPC Resolution, "Participation of Banks in Switzerland in SEPA Payment Schemes.17 " The EPC shall give Participants and stakeholders at least 3 months' prior notice of the Commencement Date. 5.2 Compliance with the Rulebook A Participant is acting as Debtor Bank and/or as Creditor Bank in the Scheme and shall comply with: ? the Rulebook, including amendments as and when they are made and properly communicated to Participants ? the SEPA Data Model and associated Implementation Guidelines for standards ? the SEPA Scheme Management Internal Rules (the ?Internal Rules?), as set out in Annex 5 to this Rulebook ? any Balancing Payment Arrangement (as referred to in section 5.14). ? any validly made order or notice issued as part of the SEPA Scheme Management processes under the Rulebook and the Internal Rules. The parties to the Rulebook are the EPC and each Participant. The Rulebook is a multilateral agreement comprising contracts between: ? the EPC and each Participant; and ? each Participant and every other Participant. A person who is not a party to the Rulebook shall have no rights or obligations under the Rulebook. A Participant shall procure that its employees, its agents and the employees of its agents comply with all applicable obligations under the Rulebook. ______________________________________________________________________________ 17 DOC EPC040/06 - Approved by the EPC Plenary on 8 March 2006 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 74 ? 19 June 2007 Participants should act consistently with the policies and practices set out in the PE-ACH/CSM Framework. 5.3 Reachability Each Participant shall offer services relating to the Scheme in the capacity of Debtor Bank. A Participant may also offer services relating to the Scheme in the capacity of Creditor Bank. A Participant which uses the services of a CSM to assist in the provision of its services to Creditors and Debtors shall only use a CSM which complies with the PE-ACH/CSM Framework in relation to the provision of Clearing and Settlement services in relation to the Scheme. A Participant which uses the services of an Intermediary Bank to perform any functions in relation to an obligation arising under the Rulebook shall ensure that its arrangements with such Intermediary Bank are consistent with, and do not detract from, the requirements of the Rulebook and the other documents listed at section 5.2. A Participant when using the services of a CSM or Intermediary Bank acts at its own risk. 5.4 Eligibility for Participation In order to be eligible as a Participant, a Participant must at all times: ? be active in the business of providing banking and/or payment services to Customers, including the provision of accounts used for the execution of payments, holding the Funds needed for the execution of payments or making the Funds received following the execution of payments available to Customers ? be regulated by an appropriate European regulatory body ? be incorporated or licensed in a SEPA jurisdiction ? be able to pay its debts as they fall due, and not be insolvent as defined in accordance with any insolvency law applicable to the Participant ? maintain a sufficient level of liquidity and capital in accordance with regulatory requirements to which it is subject ? be able to meet rating or other criteria set under the terms of the Scheme from time to time for the purpose of establishing the Participant?s ability to meet its financial obligations ? comply fully with applicable regulations in respect of money laundering, sanctions restrictions and terrorist financing ? participate, or be eligible to participate, directly or indirectly in one or more CSMs for the purpose of providing access to the Scheme throughout SEPA ? develop and effect operational and risk control measures appropriate to the business undertaken by the Participant, such as the recommended risk mitigation guidance set out in the Rulebook and in Annex II to the Rulebook. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 75 ? 19 June 2007 Applicants which fall within one of the following categories shall be deemed automatically to be eligible under this section 5.4: ? a credit institution which is authorised in accordance with Article 4 of Directive 2000/12/EC by a state which is a member of the European Economic Area; ? an undertaking which is listed in Article 2(3) of Directive 2000/12/EC; or ? a bank which is authorised in accordance with Article 3 of the Federal Law on Banks and Savings Banks of 8 November 1934 by the Swiss Federal Banking Commission. Any references in the Rulebook to a "bank" or "banks" shall be construed as including any undertaking which is eligible under this section 5.4 and shall not be construed as excluding or attempting to exclude undertakings which do not fall within one of the categories listed above. A Participant shall notify the Scheme Management Committee (?SMC?) immediately of any matter that is material to the Participant's eligibility as a Participant under this section 5.4. The SMC shall take reasonable steps to bring such notifications to the attention of all other Participants and the EPC Plenary. 5.5 Becoming a Participant Any undertaking which is eligible under section 5.4 above may apply to become a Participant. Applications shall be submitted to the EPC in accordance with its application procedures as set out in the Internal Rules. To apply to become a Participant, an undertaking shall submit to the EPC an executed and original Adherence Agreement and submit Supporting Documentation to the EPC. A Participant may appoint an agent to complete an Adherence Agreement on its behalf. If the latter procedure is adopted the Participant undertakes all rights and obligations under the Rulebook and the documents specified in section 5.2 above as if it had completed the Adherence Agreement itself. The EPC may require additional information from the applicant in support of its application. An applicant becomes a Participant on an admission date specified by the EPC in accordance with the Internal Rules. Names of applicants which will become Participants at a future date may be pre-published, and a date designated and published when they will become Participants. In consideration of the mutual obligations constituted by the Rulebook, an applicant agrees to be bound by, becomes subject to and shall enjoy the benefits of, the Rulebook upon becoming a Participant. If an application to become a Participant is rejected, the relevant applicant shall receive notice of such in writing and be provided with a statement of the reasons for such rejection. Upon receipt of such a written rejection, the applicant may appeal against the decision in accordance with the Internal Rules. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 76 ? 19 June 2007 5.6 Direct Debit Scheme List of Participants The Direct Debit Scheme List of Participants shall be maintained in good and up-to-date order and arrangements will be made for such list to be made available to Participants when issued or updated. Such list shall contain: ? current contact details for each Participant for the purpose of enabling notices to be served on Participants in accordance with the Rulebook ? the date on which each Participant attained Participant status ? details of undertakings which have been removed from the list, including the date of their removal; and ? such other information as is considered appropriate in the interests of the effective management of the Scheme. Any changes to contact details will be notified by Participants, in accordance with the Scheme management process. By submitting an application to become a Participant, an undertaking consents to publication of the details referred to in this section 5.6. 5.7 Obligations of a Creditor Bank In respect of each of its Creditors, a Creditor Bank shall: a. enter into an agreement governing the provision and use of services relating to the Scheme only after applying the principles of ?Know Your Customer? b. ensure that such agreement is consistent with the Rulebook c. ensure that such agreement makes adequate provision in circumstances where a Creditor moves its account from one Creditor Bank to another Creditor Bank, as provided for in the Rulebook d. ensure that such agreement makes adequate provision for the Creditor Bank?s succession (e.g. through merger or acquisition), in accordance with the Rulebook e. not restrict its Creditors from obtaining similar services relating to the Scheme from any other Creditor Bank f. provide Creditors and prospective Creditors with adequate information on the respective rights and obligations of the Debtor, Creditor and Creditor Bank in relation to the SEPA Direct Debit in question, in advance of the first SEPA Direct Debit to be collected by the Creditor and in accordance with the relevant provisions in the Rulebook on the content of such information g. use reasonable commercial endeavours, so far as practicable, to comply with any guidance issued from time to time in relation to risk mitigation as set out in the Rulebook and Annex II SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 77 ? 19 June 2007 h. in the event that a prospective Creditor does not have a Unique Creditor Identifier, provide or procure the provision of such a number i. perform all operational tasks allocated to Creditor Banks under the Rulebook and comply with the standards set out in the SEPA Data Model j. effect exceptional processing (including all Rejects, Returns and Refunds in relation to its Creditors' accounts) in accordance with the Rulebook k. pay the amount of each Refund to the relevant Debtor Bank, regardless of the status of the Creditor?s account or the Creditor itself l. upon request by a Debtor Bank to whom it has sent a Collection (including any Collection which has become subject to a Reject), seek all relevant information and, if requested, a copy of the relevant Mandate, from the Creditor and provide to the Debtor Bank without undue delay such information relating to the relevant Collection and Mandate as has been made available to it by the relevant Creditor m. monitor the use by its Creditors of SEPA Direct Debits to ensure continuing compliance with the Rulebook and in order to mitigate all the risks n. in the event that it has credible evidence that its Creditor has effected or proposes to effect one or more SEPA Direct Debits with intent to defraud any person, cease forthwith to effect further Collections for such Creditor o. ensure that, in its agreements with Creditors governing the provision and use of services relating to the Scheme, it has the right to terminate such agreements in the event that Creditors misuse the Scheme and that it exercises such right in such an event p. pay compensation to Debtor Banks in respect of Refunds as determined in accordance with the Rulebook A Creditor Bank shall oblige each of its Creditors, in accordance with the relevant requirements set out in the Rulebook: a. to obtain and use a Creditor Identifier when effecting SEPA Direct Debits b. to use a form of Mandate which complies with the Rulebook c. to provide Debtors and prospective Debtors with adequate information on the respective rights and obligations of the Debtor and Creditor in relation to the SEPA Direct Debit in question, in advance of the first SEPA Direct Debit to be collected by the Creditor from such Debtor and in accordance with the relevant provisions in the Rulebook on the content of such information. A model of the statement of Debtors' rights is provided in Annex III. d. to comply with the terms of Mandates agreed with its Debtors e. to collect, process and store data related to its Mandates in accordance with the relevant provisions of the Rulebook f. to pre-notify its Debtors in relation to Collections it proposes to initiate in accordance with the relevant Mandate SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 78 ? 19 June 2007 g. to initiate Collections with the Creditor Bank in accordance with the relevant timing requirements set out in the Rulebook h. to perform all operational tasks allocated to Creditors under the Rulebook i. to effect all Rejects, Returns and Refunds in relation to its Collections presented through the Creditor Bank, j. without delay, to provide the Creditor Bank with information relating to its Collections and Mandates, and a copy of any Mandate, when requested by the Creditor Bank k. to comply with any guidance for Creditors issued from time to time in relation to risk mitigation l. to resolve any disputes concerning the underlying contract and the related payments directly with the Debtor Where a Debtor Bank has suffered a Loss as a result of effecting a Refund in accordance with the Rulebook and the relevant Creditor Bank does not indemnify the Debtor Bank in respect of such Loss in accordance with the Rulebook, the Debtor Bank shall be entitled to take the benefit, in whole or in part and whether by way of subrogation or otherwise, of the Creditor Bank's rights against the relevant Creditor, and the Creditor Bank shall take all reasonable steps to secure such rights for the Debtor Bank. The Creditor Bank will indemnify the Debtor Bank for the financial loss incurred in the case of a Refund request honoured by the Debtor Bank according to the rule described in PT-04.16. 5.8 Obligations of a Debtor Bank In respect of each of its Debtors, a Debtor Bank shall: a. enter into an agreement governing the provision and use of services relating to the Scheme b. ensure that such agreement is consistent with the Rulebook c. ensure that such agreement makes adequate provision for a Debtor moving its account from a Debtor Bank to another Debtor Bank, as provided for in the Rulebook d. ensure that such agreement makes adequate provision for the Debtor Bank?s succession (e.g. through merger or acquisition), in accordance with the Rulebook e. provide Debtors and prospective Debtors with adequate information on the respective rights and obligations of the Debtor, Creditor and Debtor Bank in relation to the SEPA Direct Debit in question, in advance of the first SEPA Direct Debit to be debited from each relevant Debtor's account and in accordance with the relevant provisions in the Rulebook on the content of such information f. allow Debtors to prohibit the application of SEPA Direct Debits to its account g. use reasonable commercial endeavours, so far as practicable, to comply with any guidance issued from time to time in relation to risk mitigation as set out in the Rulebook and in Annex II SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 79 ? 19 June 2007 h. perform all operational tasks allocated to Debtor Banks under the Rulebook and comply with the standards set out in the SEPA Data Model i. effect all Rejects, Returns and Refunds in relation to its Debtors' accounts, in accordance with the Rulebook, even if the Debtor?s account is closed j. effect Refunds requested by the Debtor after the closure of his account in the Debtor Bank, in accordance with the Rulebook k. without delay, if requested by a Debtor in respect of whom a Collection has been received, seek all relevant information and a copy of the relevant Mandate from the Creditor Bank and provide to the Debtor without undue delay such information relating to the relevant Mandate as has been made available to it by the relevant Creditor Bank A Debtor Bank shall oblige each of its Debtors, in accordance with the relevant requirements set out in the Rulebook: a. to comply with the terms of Mandates agreed with its Creditors b. to claim Refunds only in accordance with the relevant timing requirements set out in the Rulebook c. to resolve any disputed Collection directly with the Creditor concerned, and accept that the obligations of the Debtor Bank and the Creditor Bank under the Scheme are not subject to claims or defences under the contractual or other arrangements in place between Debtor and Creditor 5.9 Indemnity and Limitation of Liability In respect of each SEPA Direct Debit which is the subject of a Collection received by a Debtor Bank from a Creditor Bank, such Creditor Bank shall indemnify the Debtor Bank in respect of all losses, costs, damages and expenses (including reasonable legal fees), taxes and liabilities for any claims, demands or actions but limited always to the amount specified in the Collection (each referred to as a "Loss") incurred by the Debtor Bank in connection with such SEPA Direct Debit, including but not limited to Loss arising out of or in connection with: ? the performance by the Debtor Bank of any obligation relating to the Collection to which it is subject under the Rulebook ? any defect in the Mandate to which the Collection relates ? any breach of the Rulebook by the Creditor Bank relating to the Collection ? any negligent act or omission of the relevant Creditor and/or Creditor Bank relating to the collection or the Mandate insofar as relevant to the operation of the Scheme; or ? any operational failure of the relevant Creditor and/or Creditor Bank relating to the Collection or the Mandate insofar as relevant to the operation of the Scheme, ? subject to proportionate reduction of such indemnity in the case of contributory negligence of the Debtor Bank, its employees, its agents or their employees. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 80 ? 19 June 2007 A Participant, its agents, its employees and the employees of its agents shall not be liable under the Rulebook for any indirect or consequential Losses. Any Loss which exceeds a sum specified in a Collection, increased by the Refund compensation as set out in PT-04.16 shall be deemed to be an indirect Loss. A Loss which results from action taken to limit or manage risk shall also be deemed to be an indirect Loss. Further, a Participant shall not be liable for any failure, hindrance or delay in performance in whole or in part of its obligations under the Rulebook if such failure, hindrance or delay arises out of circumstances beyond its control. Such circumstances may include, but are not limited to, acts of God, criminal action, fire, flood and unavailability of energy supplies. 5.10 Liability of the EPC The EPC, its agents, employees or the employees of its agents shall not be liable for anything done or omitted in the exercise of any discretion under the Rulebook unless it is shown that the act or omission was effected in bad faith. The EPC, its agents, its employees and the employees of its agents shall not be liable for any indirect or consequential Losses. 5.11 Termination A Participant may terminate its status as a Participant by giving no less than six months' prior written notice to the SMC of the EPC, such notice to take effect on a designated day (for which purpose such a day will be designated at least one day for each month). As soon as reasonably practicable after receipt of such notice, it or a summary shall be published to all other Participants in an appropriate manner. A former Participant shall continue to be subject to the Rulebook in respect of all activities which were conducted prior to termination of its status as a Participant and which were subject to the Rulebook, until the date on which all obligations to which it was subject under the Rulebook prior to termination have been satisfied. In particular, in each case by the former Participant and in favour of the former Participant, as appropriate: ? all SEPA Direct Debit obligations incurred prior to termination of its status as a Participant are preserved and shall be performed in accordance with the Rulebook; ? partly-completed SEPA Direct Debit obligations shall be fully completed; and ? all rights accrued prior to such termination are preserved. Upon termination or suspension of its status as a Participant, an undertaking shall not incur any new obligations under the Rulebook. Further, upon such termination, the remaining Participants shall not incur any new obligations under the Rulebook in respect of such undertaking's prior status as a Participant. In particular, no new SEPA Direct Debit obligations may be incurred by the former Participant or in favour of the former Participant. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 81 ? 19 June 2007 The effective date of termination or suspension of a Participant's status as a Participant is (where the Participant has given notice in accordance with the first paragraph of section 5. 11) the effective date of such notice, or (in any other case) the date on which the Participant's name is deleted from the Direct Debit Scheme List of Participants, and as of that date the Participant's rights and obligations under the Rulebook shall cease to have effect except as stated in this section 5.11. Sections of the Rulebook shall continue to be enforceable against a Participant, notwithstanding termination of such Participant?s status as a Participant. 5.12 Intellectual Property The Participants acknowledge that any copyright in the Rulebook belongs to the EPC. The Participants shall not assert contrary claims, or deal with the Rulebook in a manner that infringes or is likely to infringe the copyright held by the EPC in the Rulebook. 5.13 Compliance by CSMs A CSM that participates in the Scheme as a SEPA compliant CSM in accordance with the conditions set out in the PE-ACH/CSM Framework shall carry out a regular self-assessment to demonstrate its compliance with the PE-ACH/CSM Framework. A CSM that complies with the PE-ACH/CSM Framework shall notify of its users and owners of its compliance in an appropriate manner. A CSM that operates solely on a bilateral or internalised basis pursuant to paragraph 2.1 of the PE-ACH/CSM Framework is not obliged to carry out a self-assessment or notify the SMC of its compliance with the PE-ACH/CSM Framework in accordance with this section. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 82 ? 19 June 2007 5.14 51BBalancing Payments Balancing Payment Arrangement ? Creditor Banks and Debtor Banks shall be free to agree a Balancing Payment Arrangement. ? Pursuant to a Balancing Payment Arrangement, the Creditor Bank shall pay a Balancing Payment to the Debtor Bank in relation to a Direct Debit Transaction to which the Creditor Bank and Debtor Bank are parties. Multilateral Balancing Payment Arrangement ? In the absence of a Balancing Payment Arrangement between the Creditor Bank and the Debtor Bank, the Multilateral Balancing Payment Arrangement shall apply. ? Pursuant to the Multilateral Balancing Payment Arrangement, the Creditor Bank shall pay the Multilateral Balancing Payment to the Debtor Bank in relation to a Direct Debit Transaction to which the Creditor Bank and Debtor Bank are parties. ? The Multilateral Balancing Payment is payable when the Debtor Bank makes a payment in relation to Direct Debit Transaction, subject to any arrangements otherwise agreed between the Creditor Bank and Debtor Bank. Unresolved Issues and Compliance ? Sections 2.3 and 2.4 of the Internal Rules will not apply in the event of an Unresolved Issue relating to the Multilateral Balancing Payment or a Balancing Payment. 5.15 52BContractual Provisions The Rulebook contains legal obligations which are binding on the Participants and which are enforceable against a Participant by the SMC or another Participant. The whole Rulebook is intended to have legal effect. In the event of any inconsistency between the provisions of the Rulebook, the provisions of this Chapter 5 shall prevail. Subject to the prevalence of provisions in this Chapter 5, the provisions of Chapter 4 shall prevail over any other provision in the Rulebook. This Rulebook constitutes the entire agreement, and supersedes any previous agreement{s} (including rules or practices of national payment schemes), between any Participants and between any Participant and the EPC relating to the subject matter of this Rulebook. In the event of an inconsistency between the provisions of the Rulebook and any other agreement or convention between the Participants and the EPC in relation to the subject matter of this Rulebook, the provisions of this Rulebook shall prevail. Each Mandate and the terms of each agreement governing the provision and use of services relating to the Scheme between respectively the Debtor and Debtor Bank and the Creditor and Creditor Bank shall continue for the benefit of the successors and permitted assignees of any relevant party. For the purposes of the computation of time or any period of time under the Rulebook, only days which are Inter-Bank Business Days shall be included in such computation, unless a particular period of time is expressed in Customer Banking Business Days, Calendar Days, or other calendar time units, for example, weeks, months or years. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 83 ? 19 June 2007 Where an obligation which the Rulebook imposes on a Participant in favour of a Customer would fall to be performed by the Participant on a day which is not a Customer Banking Business Day in the country where the Participant is obliged to perform that obligation, that obligation shall not be due for performance until the next following day which is a Customer Banking Business Day in that country. Any reference in the Rulebook to statutes or statutory instruments shall be to such statutes or statutory instruments as amended or replaced from time to time. Every document that is required to be provided under the Rulebook shall be provided in the English language. Any reference in the Rulebook to a person or an undertaking (however described) shall include its living successors. Headings in the Rulebook are used for ease of reference only. The Rulebook is governed by, and shall be construed in accordance with, Belgian law. The Rulebook is drawn up in the English language. If the Rulebook is translated into any other language, the English language text prevails. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 84 ? 19 June 2007 6 SEPA SCHEME MANAGEMENT18 The Scheme Management Entity is EPC AISBL acting in accordance with the EPC Charter. SEPA Scheme Management comprises two functions. The first function involves managing the development and evolution of the Scheme and the second function involves the administration of the Scheme and the process of ensuring compliance with its rules. The detailed rules that describe the operation of these functions are set out in the Internal Rules of SEPA Scheme Management in Annex 5 of the Rulebook. Development and Evolution The development and evolution function of SEPA Scheme Management establishes formal change management procedures for the Scheme. The change management procedures aim to ensure that the Scheme is kept relevant for its users and up-to-date, with structured processes for initiating and implementing changes to the Scheme, the Rulebook and related documentation. An important component of change management is the innovation of ideas for enhancing the quality of the existing Scheme as well for developing new schemes, based always on sound business cases. The development of change proposals is to be carried out through clear, transparent and structured channels, which take into account the views of Scheme Participants, SEPA service suppliers, end-users as well as other concerned groups. The development and evolution function shall be performed by the EPC Plenary, supported by the SEPA Payment Schemes Working Group (?SPS WG?) or by such other working and support group as the EPC Plenary may designate. The EPC Plenary and the SPS WG shall perform the development and evolution function in accordance with the procedures set out in the Internal Rules. Administration and Compliance The administration and compliance function of SEPA Scheme Management establishes rules and procedures for administering the adherence process for the Scheme, for addressing cases of claimed non-compliance by Participants with the rules of the Scheme and for addressing situations where Participants are unable to resolve their grievances through local, national dispute resolution methods. In addition, the Internal Rules provide for an appeals process on decisions taken by the SMC on adherence and complaints matters. The administration and compliance function aims to ensure that the Schemes are administered fairly and transparently at every stage in accordance with the Rulebook and general principles of applicable law. The administration and compliance function shall be performed by the SMC as set out in detail in the Internal Rules. ______________________________________________________________________________ 18 New text replacing previous annex. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 85 ? 19 June 2007 The roles, rights and powers of the SMC and the EPC Plenary are set out in detail in the Internal Rules and in the EPC Charter. The SMC and the EPC Plenary are supported by a common EPC Secretariat in the exercise of their SEPA Scheme Management functions. The parties to this Rulebook are the EPC and each Participant. The SMC and the EPC Plenary are established by the EPC in accordance with the EPC Charter and are organs of the EPC. In this Rulebook, references to the rights, obligations and entitlements of the SMC and the EPC Plenary may be read as references to the rights, obligations and entitlements of the EPC. The Internal Rules form part of this Rulebook and may only be amended in accordance with the procedures set out in section 3 of the Internal Rules. The Internal Rules shall be binding on Participants in accordance with section 1.4 and 5.2 of the Rulebook. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 86 ? 19 June 2007 7 TERMS DEFINED IN THE RULEBOOK Definitions taken from other documents are acknowledged. Terms defined elsewhere in this document are not repeated here, but only referenced. Definition Additional Optional Services Complementary features and services based on the Scheme, as described in section 2.4 of the Rulebook. Adherence Agreement The agreement to be completed as part of the process by which an entity applies to become a Participant. The agreement is found as Annex 1 of the Rulebook. Affected Participant A Participant that is subject to disciplinary proceedings in accordance with Chapter 6 and the rules of the SMC. AOS See ?Additional Optional Services?. Balancing Payment A payment made by the Creditor Bank to the Debtor Bank in relation to the costs incurred by the Debtor Bank in relation to a Direct Debit Transaction. The level of a Balancing Payment shall comply with applicable competition rules. Balancing Payment Arrangement An agreement between the Creditor Bank and the Debtor Bank relating to a Balancing Payment. Bank Identifier Code (BIC) An 8 or 11 character ISO code assigned by SWIFT and used to identify a financial institution in financial transactions (ISO 9362). BIC See ?Bank Identifier Code?. Calendar Day A Calendar Day means any day of the year. Clearing The process of transmitting, reconciling and, in some cases, confirming payment orders prior to Settlement, possibly including the netting of instructions and the establishment of final positions for Settlements. Clearing and Settlement Mechanism ("CSM") A Clearing and Settlement Mechanism (including a PE-ACH) as described in the PE-ACH/CSM Framework, reference. [2] Collection A Collection is the part of a Direct Debit Transaction starting from the Collection initiated by the Creditor until its end through the normal debiting of the Debtor?s account or until the completion by a Reject, Return or Refund. Commencement Date The date on which the EPC resolves to commence operation of the Scheme in accordance with section 5.1. Creditor Defined in section 3.1. Creditor Bank Defined in section 3.1. Customer Non-bank Creditor or Debtor. Customer Account The account held by a Customer in the books of a SEPA bank. Customer Banking Business Day A Customer Banking Business Day is a day on which banks in the relevant jurisdiction are generally open for business with customers. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 87 ? 19 June 2007 Definition Cut-off Time The Rulebook defines time cycles expressed in the time-unit ?day?. More detailed time limits expressed in ?hours-minutes? must be specified by all actors, including CSMs, for operating the Scheme. D Defined in section 4.3.1. Debtor Defined in section 3.1. Debtor Bank Defined in section 3.1. Direct Debit Collection See ?Collection.? Direct Debit Transaction A Direct Debit Transaction is the whole process of the execution of a payment made by the use of direct debit, starting from the Collection initiated by the Creditor up to its finality, being or the normal execution, or the Reject, or the Return or the Refund of the Collection. It is the end?to-end execution of a direct debit payment. Due Date Defined in section 4.3.1. EBA European Banking Association. EBPP EBPP stands for ?Electronic Bill Presentment and Payment? and identifies a payment process where the handling of the underlying bill is, in one way or another, integrated in the payment process. ECSA European Credit Sector Association. EONIA Interest Rate The EONIA SWAP INDEX is the average rate at which, at 16:30 Brussels time, a representative panel of prime banks provide daily quotes, rounded to three decimal places, that each Panel Bank believes is the mid-market rate of EONIA swap quotations between prime banks. It is quoted on an actual/360 day basis. EPC The European Payments Council. EPC Charter The Charter of the European Payments Council dated 18 June 2004, as amended from time to time. EU The European Union. File An electronic envelope containing a number of transactions that allows the receiver of the File to control its integrity. A File may contain a single transaction, or several single transactions, or batches of transactions. Funds In relation to a payment transaction shall mean cash, scriptural money and electronic money as defined in Directive 2000/46/EC. IBAN An expanded version of the basic bank account number (BBAN) intended for use internationally that uniquely identifies an individual account at a specific financial institution in a particular country (ISO 13616, EBS 204). As of late-2005, ISO is in the process of aligning the ISO 13616 Standard with the European Standard EBS 204. In due course the ISO Standard will replace the EBS standard (reference [3]). SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 88 ? 19 June 2007 Definition Inter-Bank Business Day An Inter-Bank Business Day is a day on which banks generally are open for inter-bank business. The TARGET Days Calendar is used to identify Inter-Bank Business Days. TARGET is the Trans-European Automated Real-time Gross Settlement Express Transfer System. To avoid frequent changes to TARGET closing days and thus the introduction of uncertainties into financial markets, a long-term calendar for TARGET closing days has been established and applied since 2002. It is published by the European Central Bank. Internal Rules The Internal Rules of SEPA Scheme Management, as set out in Annex 5 of this Rulebook, and as amended from time to time. Intermediary Bank A bank which is neither that of the Creditor nor that of the Debtor and which participates in the execution of a Collection. Loss Defined in section 5.7. Mandate Defined in section X4.1X. Multilateral Balancing Payment In the absence of a Balancing Payment Arrangement, a default payment made by the Creditor Bank to the Debtor Bank in relation to the costs incurred by the Debtor Bank for a Direct Debit Transaction. The level of the Multilateral Balancing Payment shall be posted on the EPC [website] and shall be reviewed on a periodic basis to ensure compliance with applicable competition rules. Multilateral Balancing Payment Arrangement A default agreement between Creditor Banks and Debtor Banks relating to the Multilateral Balancing Payment. National Direct Debit Scheme A set of rules and operational procedures built by a national banking-community in order to operate efficient and secure direct debiting in an individual country. According to domestic needs there may exist one or more National Direct Debit Schemes in a country. Original Amount Original ordered amount for each Collection as specified by the Creditor to the Creditor Bank. Participant Debtor Bank and/or Creditor Bank. Payment Services Directive The EU Directive on payment services in the internal market. PE-ACH Pan-European Automated Clearing House. A business platform for the processing of euro payment instruments made up of governance rules and payments practices and supported by the necessary technical platform(s). PE-ACH CSM Framework The EPC document that establishes the principles on which CSMs will support the schemes for credit transfer and direct debits, as set out in reference [2]. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 89 ? 19 June 2007 ______________________________________________________________________________ Definition Pre-notification The notification provided by the Creditor to the Debtor of the amount and time schedule prior to the date on which the debits are to be collected. The notice can be provided as a separate piece of information, or via inclusion in a regular statement, bill, or invoice. Reachability Reachability is the concept that all Customer Accounts in SEPA are accessible for the receipt of direct debits in the Scheme. Refund Defined in section. 4.4. Refusals Defined in section 4.4. Rejects Defined in section 4.4. Remittance Information Information supplied by the Creditor to be passed to the Debtor. Request for Cancellation Defined in section 4.4. Returns Defined in section 4.4. Reversal Defined in section 4.4. Revocation Defined in section 4.4. R-transactions Direct debit transactions that result in exception processing are referred to as ?R-transactions?. Scheme The SEPA Direct Debit Scheme. Scheme Management Committee The committee of the EPC that shall perform the administration and compliance function of SEPA Scheme Management. SEPA The definition of SEPA is part of the EPC Roadmap approved by the EPC Plenary in December 2004. SEPA will be the area where citizens, companies and other economic actors will be able to make and receive payments in euro, within Europe (currently defined as consisting of all the EU member states plus Ireland, Norway, Liechtenstein and Switzerland. SEPA will also extend to cover the following territories that are considered to be a part of the EU in accordance with Article 299 of the Treaty of Rome: Martinique, Guadeloupe, French Guiana, Reunion, Gibraltar, Azores, Madeira, Canary Islands, Ceuta and Melilla and Aland Islands.), whether between or within national boundaries under the same basic conditions, rights and obligations, regardless of their location.19 SEPA Credit Transfer Scheme The SEPA Credit Transfer Scheme is the payments scheme for making credit transfers across SEPA, as set out in the SEPA Credit Transfer Scheme Rulebook. SEPA Credit Transfer Scheme Rulebook The Rulebook setting out rules and business standards for the SEPA Credit Transfer Scheme. 19 Change 07/001 SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 90 ? 19 June 2007 Definition SEPA Data Model This document sets out in detail elements of the logical data layer and the physical data layer of the Scheme, as described in Chapter 0.5 of the Rulebook and reference [8]. SEPA Direct Debit A SEPA Direct Debit is the payment instrument governed by the rules of the SEPA Direct Debit Scheme for making direct debit payments in euro throughout SEPA from bank accounts to other bank accounts. SEPA Direct Debit Scheme The SEPA Direct Debit Scheme is the payments scheme for making direct debits across SEPA, as set out in the SEPA Direct Debit Scheme Rulebook. SEPA Direct Debit Scheme Rulebook The Rulebook setting out rules and business standards for the SEPA Direct Debit Scheme. SEPA Scheme A SEPA payment scheme is a common set of business rules, practices and standards for the provision and operation of a SEPA payment instrument agreed at an inter-bank level in a competitive environment. SEPA Scheme Management SEPA Scheme Management denotes the administration, compliance and development functions in relation to a SEPA Scheme. Service Level Agreements An agreement between a Participant and another entity for the provision by such entity to the Participant of services which relate to the Scheme (including a statement of the parties? respective rights and obligations and the service levels required by the Participant for the service provider). Settlement An act that discharges obligations with respect to the transfer of Funds between Creditor Bank and Debtor Bank. Settlement Cycle The time taken to achieve Settlement. Settlement Date The date on which obligations with respect to Funds transfer between Debtor Bank and Creditor Bank are discharged. SMC Scheme Management Committee, see Chapter 6. Supporting Documentation A legal opinion in the form set out on the website of the EPC, duly executed by the undertaking's internal or external counsel in accordance with the Internal Rules. TARGET Calendar Defined in section 4.3. Terms and Conditions The general Terms and Conditions that a bank has with its Customers (and which may contain dispositions about their rights and obligations related to Scheme-debits. These dispositions may also be included in a specific agreement, at the bank?s choice). Time Cycle This describes the time constraints of a process in terms of days per key process step. Transaction Type Defined in section 4.8.21. Unauthorised Transaction Defined in section 4.4. SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 91 ? 19 June 2007 Definition Unresolved Issue Any dispute in relation to the Rulebook. Value Date A reference point in time used by a bank for the calculation of interest on the Funds transferred out or into a payment account. Annex I to SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 1 ?19 June 2007 ANNEX I ? DRAFT SEPA DIRECT DEBIT ADHERENCE AGREEMENT Annex I to SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 2 ?19 June 2007 Draft SEPA Direct Debit Adherence Agreement To: The European Payments Council (the "EPC") From: Name of Proposed Participant: ------------------------------------------------------------------------ (the "Proposed Participant") PREAMBLE The SEPA Direct Debit Scheme (the "Scheme") is a single pan-European direct debit Scheme that operates in all SEPA countries2 , comprising the EU member states, the three additional member states of the European Economic Area (the EEA), and Switzerland. The EPC controls and manages the operation of the Scheme in accordance with the terms and conditions set out in the SEPA Direct Debit Scheme Rulebook (the "Rulebook"). The Rulebook sets out the rights and obligations of all institutions bound by its terms (the "Participants") and the EPC Plenary, and binds each Participant to comply with their obligations to the EPC and to all other Participants pursuant to the rules set out therein. The EPC, acting on its behalf and on behalf of all Participants, will notify the Proposed Participant of the date following the Readiness Date (as defined below) on which this Adherence Agreement becomes effective (the "Effective Date") as between the Proposed Participant, the EPC and other Participants. As of the Effective Date the Proposed Participant shall become a Participant and be bound to all the obligations, and entitled to all the benefits, set out in the Rulebook. IT IS HEREBY AGREED AS FOLLOWS:- 1. The Proposed Participant hereby undertakes to all Participants and to the EPC to perform the obligations imposed by and to comply with the provisions of the Rulebook, as modified from time to time, with effect from the Effective Date. 2. The Proposed Participant makes the following representations and warranties: 2.1 The Proposed Participant has the power and authority to enter into and has taken all corporate action to authorise its entry into the Scheme and to perform the obligations and comply with the provisions of the Rulebook. 2.2 The signatories of the Proposed Participant have all necessary corporate authorisations and the power and authority to bind the Proposed Participant to the Rulebook. 2.3 The Proposed Participant shall ensure that it satisfies and will at all times during its participation in the Scheme satisfy the eligibility criteria for participation in the Scheme as set out in the Rulebook. If at any time, the Proposed Participant has reason to believe that it no longer satisfies such criteria, or may be unable to satisfy such criteria, it shall notify the EPC immediately of the circumstances. 2.4 The Proposed Participant will be in a position to comply with all of the obligations set out in the Rulebook by [insert date] (the "Readiness Date"). Annex I to SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 3 ?19 June 2007 3. By submitting this completed form of Adherence Agreement the Proposed Participant agrees to be bound by the provisions of the EPC's Internal Rules governing applications for participation in the Scheme, whether or not it becomes a Participant. 4. Any communication, including service of process, to be made with the Proposed Participant under or in connection with the Rulebook shall be made in writing and addressed to the Proposed Participant at the address set out above. 5. The Proposed Participant consents to the publication of its name and basic details of its adherence application on the public website of the EPC. 6. The Participant agrees to participate in the Scheme as a Debtor Bank, and where indicated below, also as a Creditor Bank (please check box as applicable) ? The Participant agrees to Participate in the Scheme as a Creditor Bank 7. This Agreement and all matters arising from or connected with it are governed by Belgian law. 8. This Agreement is supported by the following information (please check boxes as applicable). ? Internal or external legal counsel's opinion on capacity and authority in the form prescribed by the EPC ? Responses to questions set out in the schedule to this Adherence Agreement FOR AND ON BEHALF OF THE PROPOSED PARTICIPANT Signed by (1) By (2) ------------------------------------------------------ ------------------------------------------------------ Name/Position ----------------------------------- Name/Position ----------------------------------- Date of signature -------------------------------- Date of signature -------------------------------- Seal: (if necessary) Annex I to SEPA Direct Debit Scheme Rulebook Version 2.3 Approved Page 4 ?19 June 2007 SCHEDULE (A) The Proposed Participant must supply the information requested in this schedule in support of its application to adhere to the Scheme. A failure to supply this information may result in a rejection of the application or a delay in processing it. The information supplied below shall be recorded on the EPC?s Register of Participants for the Scheme. The Proposed Participant understands that any information supplied in response to questions in this section (C) shall publicly available on the public website of the EPC and may be made generally available for download by the EPC. Full Name of Proposed Participant Official Address for Notices BIC Code (BIC 8 or BIC 11) The Proposed Participant understands that any information supplied in response to questions in this section (D) shall be available only to the EPC or to any National Adherence Support Organisation ("NASO") that has been chosen by the Proposed Participant to assist in the completion of this application, as specified in section (F), and will not be disclosed to any other body. Details of Contact Point (for communication with the EPC, a generic email must be supplied here, e.g. sepa@bank.com. Contact details of individuals must NOT be supplied). Future Readiness Date (this field must only be completed in cases where the Proposed Participant seeks to specify a date for adherence to the Scheme that falls after {date tbd}. A Proposed Participant that will be adhering to the Scheme on {date tbd} will not be required to complete this field). The Proposed Participation nominates the following NASO(s) to have access to information supplied under section (D) of this schedule (if applicable): Full Name of NASO(s) Annex II to Scheme Rulebook Version 2.3 Approved Page 1 - 19 June 2007 ANNEX II - RISK MITIGATION Annex II to Scheme Rulebook Version 2.3 Approved Page 2 - 19 June 2007 RISK MITIGATION This document (EPC261-06) has a restricted distribution and is therefore not included here. Annex III to Scheme Rulebook Version 2.3 Approved Page 1 - 19 June 2007 ANNEX III ? STATEMENT OF CONSUMERS' RIGHTS Annex III to Scheme Rulebook Version 2.3 Approved Page 2 - 19 June 2007 STATEMENT OF CONSUMERS' RIGHTS What is a SEPA Direct Debit? 1. The SEPA Direct Debit Scheme provides a single method for payment of bills and making other payments, and is ideally suited for both one-off and regular but variable payments such as subscriptions or utility bills, in both your country and others in SEPA. 2. The payment is made by your bank or other SEPA Direct Debit Scheme Participant (called "Your Bank" in this statement) to the person or company to whom the payment is due (called "the Creditor"). You authorise the Creditor to collect the payment from Your Bank by providing the Creditor with a completed Mandate Form. The Creditor will supply you with a blank Mandate Form. You should complete only those fields on the Mandate Form are marked for you to fill, and all fields marked with a *. 3. After you have completed the Mandate Form, you should return it to the Creditor (not Your Bank). You do not need to take any further steps - the Creditor will arrange for the payments to be collected from Your Bank, even where Your Bank is located in a different SEPA country from the Creditor. 4. The SEPA Direct Debit Scheme covers payments in euro where Your Bank and the Creditor's payment service provider are each providing relevant payment services from an EEA member state or Switzerland. How the Mandate works 5. A completed Mandate Form is authority from you, addressed to Your Bank, which allows Your Bank to make debits from the payment account specified by you in the Mandate Form at the request of the Creditor. This authority is called a "Mandate". 6. The Mandate is separate from any contract you may have with the Creditor - it is the basis for making payments due from you, similar to an agreement to pay in cash. The person to whom the Creditor supplies goods or services under the contract may be different from the person who pays for the goods or services. This is permitted by the SEPA Direct Debit Scheme. References to "you" in this Statement are to the person who is making the payments, regardless of who is legally obliged to pay under the contract with the Creditor. 7. The Creditor is responsible for checking the Mandate Form and processing the information it contains. When you complete a SEPA Direct Debit Scheme Mandate Form, you agree that it is not necessary for the Mandate Form to be provided to Your Bank. 8. The Creditor will arrange for details of payments to be collected from Your Bank to be given to Your Bank. When Your Bank has received these details, it will debit your payment account. 9. The Creditor will inform you of the amount and Due Date of each payment to be collected from Your Bank. If the payments are a series of fixed amounts, you may be informed once only, when the arrangement is established. In other cases, you will be informed at least 14 days before the payment is collected from Your Bank. 10. Your Bank may offer additional services to you in connection with Mandates or SEPA Direct Debit payments, but any additional services will be set out in the terms of business which Your Bank has agreed with you. The SEPA Direct Debit Scheme only covers the obligations explained in this Statement. Cancelling and amending Mandates 11. You may inform the Creditor at any time that a Mandate is cancelled. Once the Creditor has been informed, the Creditor may no longer collect payments from Your Bank on the basis of the cancelled Mandate. Annex III to Scheme Rulebook Version 2.3 Approved Page 3 - 19 June 2007 12. If the Creditor does not present a Collection under a given valid Mandate for a period of 18 months, the Creditor must cancel the Mandate and is no longer allowed to initiate Collections based on this cancelled Mandate. If a Mandate lapses in this way, it does not affect any obligations you may have to pay the Creditor. The Creditor will then have to establish a new arrangement for payment. 20 13. You may amend a Mandate by informing the Creditor of the changes you wish to make. 14. It is not necessary for you to notify Your Bank of a cancellation or amendment of a Mandate. This is the responsibility of the Creditor. Refunds 15. You may request Your Bank to refund a payment made under the SEPA Direct Debit Scheme from your payment account in the circumstances set out in this Statement. 16. If you consider that the amount of the payment is wrong, or you wish to have a refund for any other reason, you must inform Your Bank no later than 6 weeks after the payment was debited to your payment account. Your Bank is obliged to give you a refund if you make a refund request within this 6 week period. 17. You may request a refund more than 6 weeks after the payment was debited to your payment account only if you did not authorise that payment to be made. If you wish to have a refund for this reason, you must inform Your Bank as soon as you become aware of the circumstances. Your Bank may require you to provide evidence supporting your claim. Your Bank must receive your request no later than one year after the payment was debited to your payment account. 18. If you request a refund, any obligations you may have to pay the Creditor will not be satisfied. You will remain responsible for paying any amount which the Creditor is owed. The SEPA Direct Debit Scheme does not provide a mechanism for resolving disputes between you and the Creditor, or between you and Your Bank. Additional information 19. Your rights in respect of the payments services which Your Bank provides to you are not affected by the rights set out in this Statement. You may have other rights which are not mentioned here, but any other rights are not provided by the SEPA Direct Debit Scheme. 20. If you wish to complain, you should ask Your Bank for details of the complaints procedure relating to the payments services provided by Your Bank. 21. The SEPA Direct Debit Scheme is governed by Belgian law. The obligations of SEPA Direct Debit Scheme participants are set out in the SEPA Direct Debit Scheme Rulebook. The Rulebook does not confer any contractual or other rights on persons other than Participants. Your rights are exercisable only against Your Bank through the agreement you have with Your Bank for payment. ______________________________________________________________________________ 20 Change 07/010 Annex IV to Scheme Rulebook Version 2.3 Approved Page 1 - 19 June 2007 ANNEX IV ? RULEBOOK CHANGES SINCE VERSION 2.2 Annex IV to Scheme Rulebook Version 2.3 Approved Page 2 - 19 June 2007 List of changes in SDD Rulebook v2.3 Compared to v2.2 SYMBOLS USED 1. Column one contains the unique identification number of the Change 2. Column two contains the reference(s) to the parts of the Rulebook v2.1updated 3. Column three contains a description of the change 4. Column four contains a status code: ? REJ : Rejected by the EDD Working Group ? PEN : Issue pending in the EDD Working Group ? ACC : Accepted in Rulebook v2.3 Column five contains the type of change: ? TYPO: typing and layout errors ? CLAR: clarification of the text ? CHAN: change of the Rulebook content In the Rulebook each change accepted is referenced with a footnote specifying the unique number of the change applied. R e f e r e n c e Chapter / Section / Paragraph / Bullet Description Status Type 07/001 0.4 and others ??within Europe (currently defined as consisting of the 25 European Union (?EU?) member states..:? : We do not mention the number of member states (except as part of a quotation) and the text is changed as follows: ??within Europe (currently defined as consisting of all the European Union (?EU?) member states..:? plus a qualification of additional territories according to Article 299 of the Treaty of Rome. ACC CLAR Annex IV to Scheme Rulebook Version 2.3 Approved Page 3 - 19 June 2007 R e f e r e n c e Chapter / Section / Paragraph / Bullet Description Status Type 07/002 4.2 §8 The wording ?The Debtor has the right to request the Debtor Bank to completely prohibit his bank account to be debited for any Collection.? should be changed to express the right of the Debtor to obtain such a prohibition. New wording:? The Debtor has the right to instruct the Debtor Bank to completely prohibit his bank account to be debited for any Collection. The Debtor bank must offer this service to its customers.?. ACC CLAR 07/003 4.6.4 PT-04.02 and 4.2 The wording ?The Creditor and the Debtor may agree to act otherwise for the Pre-notification.? could be interpreted as if the parties are allowed by the Rulebook to agree that a Pre-notification is not necessary, while the EDDWG confirms that the intention is only to allow the parties to agree on other time-cycles for the sending of the Pre- notification, than the one defined in the Rulebook,. New proposed wording: ?The Creditor and the Debtor may agree on another time-line for the sending of the Pre-notification.? Same type of change in the box ?Closing date/time?. ACC CLAR 07/004 4.6.4 PT-04.01 Wrong cross reference: Ds-04 to be replaced twice by DS-03 ACC CLAR 07/005 4.6.5 PT-05.04 Replace the third sentence in the description by the following more precise wording: ?A Return of a Reversal is only possible for the reason provided in the attribute AT-R3 under the header reasons for Return of a Reversal?. The only reason mentioned in AT-R3 is ?Account identifier incorrect(i.e. invalid IBAN or account number does not exist)? ACC CLAR 07/006 4.6.5 PT-05.02 In the description, the reference must be ?section 4.4? rather than ?section 4.3.5?. ACC TYPO Annex V to Scheme Rulebook Version 2.3 Approved Page 1 - 19 June 2007 ANNEX V ? SEPA SCHEME MANAGEMENT INTERNAL RULES EPC AISBL Secretariat ? Av. de Tervueren 12 ? B 1040 Brussels Tel: +32 2 733 35 33 Fax: +32 2 736 49 88 Enterprise N° 0873.268.927 www.europeanpaymentscouncil.org secretariat@europeanpaymentscouncil.org © 2007 Copyright European Payments Council (EPC) AISBL: Reproduction for non-commercial purposes is authorised, with acknowledgement of the source Doc: EPC027-07 19 June 2007 (Version 1.6 Approved) ROC SEPA SCHEME MANAGEMENT INTERNAL RULES Abstract This document contains descriptions of the internal organisation, structure, rules, and processes that make up Scheme Management of the SEPA Credit Transfer and Direct Debit Schemes. Such processes cover administration and compliance, and change management, including structured dialogue with stakeholders Document Reference EPC027-07 Issue Version 1.6 Approved Date of Issue 19 June 2007 Reason for Issue Approved by the EPC Plenary 19 June 2007 Reviewed by EPC Produced by EPC Authorised by EPC Plenary 19 June 2007 Circulation Publicly available as part of the Scheme Rulebooks TABLE OF CONTENTS 0 DOCUMENT INFORMATION ..........................................................................................................................4 0.1 REFERENCES...................................................................................................................................................4 0.2 CHANGE HISTORY ..........................................................................................................................................4 0.3 PURPOSE OF DOCUMENT.................................................................................................................................4 1 INTRODUCTION.................................................................................................................................................5 1.1 THE EUROPEAN PAYMENTS COUNCIL ("EPC") ..............................................................................................5 1.2 SEPA AND THE SEPA SCHEMES ....................................................................................................................6 1.3 SEPA SCHEME MANAGEMENT.......................................................................................................................7 2 ADMINISTRATION AND COMPLIANCE ......................................................................................................9 2.1 DEFINITION OF ADMINISTRATION AND COMPLIANCE ROLES..........................................................................9 2.1.1 Role of the Scheme Management Committee ............................................................................................9 2.1.2 Composition of the SMC ...........................................................................................................................9 2.1.3 Duration of Appointment ..........................................................................................................................9 2.1.4 Termination of Appointment by Resolution of the EPC Plenary.............................................................10 2.1.5 Criteria for Membership (EPC Related Member)...................................................................................10 2.1.6 Criteria for Membership (Independent Member)....................................................................................10 2.1.7 Criteria for Membership (Chair) ............................................................................................................11 2.1.8 Duties of SMC Members .........................................................................................................................11 2.1.9 EPC Plenary Role in Policy of SMC.......................................................................................................12 2.1.10 SMC - Key Roles and Responsibilities ...............................................................................................12 2.1.11 Meetings of the SMC ..........................................................................................................................13 2.1.12 Quorum ..............................................................................................................................................14 2.1.13 Voting.................................................................................................................................................14 2.1.14 Other Support.....................................................................................................................................14 2.1.15 Nominating Process ...........................................................................................................................14 2.1.16 Role of the Secretariat........................................................................................................................15 2.1.17 Information Service............................................................................................................................15 2.1.18 Additional Optional Services ("AOS") ...............................................................................................15 2.1.19 Support for Risk Management............................................................................................................16 2.1.20 [Expenses ...........................................................................................................................................16 2.1.21 Record Keeping..................................................................................................................................16 2.2 RULES FOR ADHERENCE...............................................................................................................................16 2.2.1 Eligibility for Participation in Schemes..................................................................................................16 2.2.2 Rules for Adherence by an Entity in a Group/Decentralised Structure ..................................................16 2.2.3 Rules for Signing the Adherence Agreement...........................................................................................17 2.2.4 National Adherence Support Organisation ("NASO")............................................................................17 2.2.5 Becoming a Participant ..........................................................................................................................17 2.2.6 Register of Participants ..........................................................................................................................18 2.2.7 Fees.........................................................................................................................................................19 2.2.8 Unsuccessful Applications ......................................................................................................................19 2.2.9 Appeals....................................................................................................................................................19 2.3 CONCILIATION UNDERTAKEN BY THE SMC .................................................................................................19 2.3.1 SMC Role in Conciliation .......................................................................................................................19 2.3.2 Application for Conciliation ...................................................................................................................20 2.3.3 Conciliation Proceedings........................................................................................................................20 2.3.4 Conciliation Involving the EPC ..............................................................................................................21 2.3.5 Report of Conciliators.............................................................................................................................21 2.3.6 Costs .......................................................................................................................................................21 2.3.7 Further Steps - Arbitration v Litigation..................................................................................................21 2.4 COMPLAINTS SUBMITTED TO THE SMC........................................................................................................22 2.4.1 Role of SMC in Complaints.....................................................................................................................22 2.4.2 Key Principles.........................................................................................................................................22 2.4.3 Investigation of Complaints ....................................................................................................................23 2.4.4 Evaluation of Complaint.........................................................................................................................23 EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 2 - 19 June 2007 2.4.5 Sanctions.................................................................................................................................................23 2.4.6 Appeals Arising from Complaints...........................................................................................................26 2.5 APPEALS.......................................................................................................................................................26 2.5.1 Introduction to the Appeals Process .......................................................................................................26 2.5.2 Key Principles.........................................................................................................................................26 2.5.3 Submission of Appeals Notice.................................................................................................................27 2.5.4 Meeting ...................................................................................................................................................27 2.5.5 Costs .......................................................................................................................................................28 2.5.6 Further Steps...........................................................................................................................................28 3 DEVELOPMENT AND EVOLUTION.............................................................................................................29 3.1 CHANGE MANAGEMENT PROCESSES ............................................................................................................29 3.1.1 Change Management - Guiding Principles.............................................................................................29 3.1.2 Change Management - Terminology.......................................................................................................29 3.1.3 Role of EPC Plenary and Working and Support Groups........................................................................30 3.1.4 Sending a Suggestion to the Secretariat..................................................................................................30 3.1.5 Acknowledgement of Receipt of Suggestion............................................................................................31 3.1.6 Consideration of a Suggestion ................................................................................................................31 3.1.7 Acknowledgement of Acceptance or Rejection of Suggestion to Initiator...............................................32 3.2 PROCESS FOR SUBMITTING MAJOR SCHEME AND RULEBOOK CHANGES ......................................................32 3.2.1 Preparation and Development of Change Request by SPS WG..............................................................32 3.2.2 Dialogue with the Initiator......................................................................................................................33 3.2.3 Consultation on Change Request............................................................................................................33 3.2.4 Feedback from National Consultation....................................................................................................33 3.2.5 Preparation of Change Proposal and the Change Proposal Submission Document..............................34 3.2.6 Submission of Change Proposal to the EPC Plenary .............................................................................34 3.2.7 Publication..............................................................................................................................................34 3.2.8 Change Release Process and Cycle ........................................................................................................34 3.3 PROCESS FOR SUBMITTING MINOR RULEBOOK CHANGES ............................................................................35 3.3.1 Preparation of List of Minor Changes....................................................................................................35 3.3.2 Publication of List of Minor Changes.....................................................................................................35 3.3.3 Re-classification of a Minor Change ......................................................................................................35 3.3.4 Submission of List of Minor Changes to the EPC Plenary .....................................................................35 3.3.5 Publication..............................................................................................................................................35 3.3.6 Change Release Process and Cycle ........................................................................................................35 3.4 STAKEHOLDER FORUMS AT EUROPEAN AND NATIONAL LEVELS .................................................................36 3.4.1 Obligations of Stakeholder Forums ........................................................................................................37 4 APPENDIX 1 - COST-BENEFIT ANALYSIS .................................................................................................39 4.1.1 Cost Benefit Analysis ("CBA") - Introduction.........................................................................................39 4.1.2 CBA - Analytical Parameters..................................................................................................................39 4.1.3 CBA - Results..........................................................................................................................................40 5 APPENDIX 2 - CONFLICTS OF INTEREST .................................................................................................41 5.1 RULES FOR MANAGING CONFLICTS OF INTEREST.........................................................................................41 5.1.1 General Principles..................................................................................................................................41 5.1.2 Record Keeping.......................................................................................................................................41 6 TERMS DEFINED IN THE INTERNAL RULES...........................................................................................42 EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 3 - 19 June 2007 0 DOCUMENT INFORMATION 0.1 References This section lists documents referred to in this document. The convention used throughout is to provide the reference number only, in square brackets. Document Number Title Issued by: [1] PRES_EPC109_04_V2.1 Realisation of the Single Euro Payments Area ? Roadmap 2004 ? 2010 EPC [2] EPC125-05 SEPA Credit Transfer Rulebook EPC [3] EPC016-06 SEPA Direct Debit Rulebook EPC 0.2 Change History Issue number Dated Reason for revision 1.0 approved 15/03/2007 National consultation until 30 April 2007 1.6 05/06/2007 For Plenary approval June 2007 and inclusion in the SDD and SCT Rulebooks 0.3 Purpose of Document This document sets out the internal rules ("Internal Rules") that govern SEPA Scheme Management. This document covers the following topics: 1. Rules for the administration and compliance function of SEPA Scheme Management, as performed by the Scheme Management Committee ("SMC"). 2. Rules for the development and evolution function of SEPA Scheme Management, as performed by the EPC Plenary and the SEPA Payment Schemes Working Group ("SPS WG"). EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 4 - 19 June 2007 EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 5 - 19 June 2007 1 INTRODUCTION 1.1 The European Payments Council ("EPC") EPC Objectives and Roles The EPC is the decision-making and co-ordination body of the European banking industry in relation to payments. The objective of the EPC is to provide leadership and support for the establishment of the Single Euro Payments Area (?SEPA?). The vision for SEPA was formulated in 2002 at the time of the launch of the EPC, when some 42 banks, the three European Credit Sector Associations (?ECSAs?) and the Euro Banking Association (?EBA?) came together and, after an intensive workshop, released the White Paper Euroland: Our Single Payments Area, in which the following declaration was made and subsequently incorporated into the EPC Charter: "We, the European banks and European Credit Sector Associations ("ECSAs"), the European Banking Federation ("FBE") and the European Savings Banks Group ("ESBG") and the European Association of Co-operative Banks ("EACB"): ? share the common vision that Euro land payments are domestic payments; ? join forces to implement this vision for the benefit of European customers, industry and banks, and accordingly; ? launch our Single Payments Area." As part of its role, the EPC is responsible for defining common positions on core payments services (retail and commercial payments) in euro in Europe and their settlement, giving strategic guidance on standards and best practice models for payments as well as monitoring the implementation of decisions taken on SEPA-related issues to ensure that SEPA credit institutions1 can maintain self- regulation and meet the expectations of users in an effective and efficient manner. The EPC is established as an international, not-for-profit association under Belgian law, with its headquarters in Brussels. Organisation of the EPC This section sets out an overview of the organisational structure of the EPC, as described in detail in the EPC Charter. 1 The EPC Internal Rules presently refer to credit institutions as well as to banking communities, both at a national and European level. These references will be amended to include such institutions and their communities as may be able to qualify for participation in SEPA schemes following developments in EU legislation. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 6 - 19 June 2007 The EPC Plenary is the main decision-making body of the EPC, comprising the members of the EPC2 acting in accordance with the EPC Charter and these Internal Rules. The role of the EPC Plenary is to define the strategy and objectives for the EPC, decide on matters of policy in relation to the work of the EPC, approve amendments to rules governing SEPA schemes and oversee the appointment of members of the SMC. In relation to SEPA Scheme Management, the EPC Plenary is responsible for carrying out the development and evolution function for SEPA schemes. The EPC Plenary convenes at least once every year at its annual general meeting. The EPC Plenary is supported by the following bodies in the exercise of its functions: ? the EPC Secretariat (the ?Secretariat?) ? the Secretariat performs administrative and secretarial functions in relation to the management of the SEPA schemes as well as providing technical and co-ordination support to the working and support groups and to the SMC as required. The Secretariat is further responsible for managing an information service on SEPA issues. ? the EPC Co-ordination Committee ? the EPC Co-ordination Committee is charged with preparing the agenda for EPC Plenary meetings, making recommendations on matters to be decided by the EPC Plenary as well as preparing the annual accounts and budget for the EPC. It is further charged with monitoring the implementation of EPC decisions, in conjunction with the ECSAs and banking communities. ? the SMC ? the SMC is responsible for performing the administration and compliance functions of SEPA Scheme Management. Its members are approved by the EPC Plenary and may, in certain exceptional cases, be removed from office by a resolution of the EPC Plenary. The SMC is a body with decision-making power. This power may only be exercised in relation to the specific functions of SEPA Scheme Management for which it is responsible pursuant to these Internal Rules. The SMC is required to report to the EPC Plenary at each EPC Plenary meeting and may do so more regularly, if required. ? the Nominating and Governance Committee (?NGC?) ? the NGC is charged with making recommendations to the EPC Plenary on potential candidates for positions in the various EPC bodies in accordance with the EPC Charter. ? Working and support groups and task forces, as established by the EPC Plenary in accordance with the EPC Charter ? the working and support groups are established by the EPC Plenary to carry out a variety of different functions in relation to the conception, creation and technical development of SEPA and SEPA schemes. Working and support groups may make recommendations to the EPC Plenary after consulting the EPC Co-ordination Committee. The working and support groups can set up task forces to assist in the performance of their functions. 1.2 SEPA and the SEPA Schemes SEPA SEPA is the geographical area where citizens, companies and other economic actors can make cross border payments in euro as easily, effectively and cheaply as they would within their national borders. The aim of SEPA therefore is to create a single market for making payments, where cross border payments can be made on the same terms and conditions as national payments. SEPA is supported by the European Commission and the European Central Bank, amongst others, as a key component of the Internal Market, with the potential to deliver both economic benefit, wealth creation and user convenience for SEPA. 2 A full list of EPC members can be found on the website www.europeanpaymentscouncil.eu EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 7 - 19 June 2007 SEPA, as defined by the EPC, encompasses the European Union member states, together with Iceland, Liechtenstein, Norway and Switzerland3 . SEPA Schemes An important step in the creation of SEPA is the development and implementation of SEPA schemes for making credit transfer and direct debit payments (the ?Schemes?) throughout SEPA. To this effect, the EPC has produced the SEPA Credit Transfer Scheme Rulebook and the SEPA Direct Debit Scheme Rulebook (the ?Rulebooks?) which set out binding rules and technical standards governing each of the Schemes. The Rulebooks are intended to have legal effect between participants in the Schemes (?Participants?). The EPC will be responsible for the implementation and operation of Scheme Management. These Internal Rules set out the rules in accordance with which the Schemes will be administered and enforced by the EPC, as well as detailing procedures for the innovation and development of both the existing Schemes and new SEPA schemes going forward. The PE-ACH/CSM Framework is a high-level set of policies and technical standards for clearing and settlement mechanisms ("CSMs") in SEPA, adopted by the EPC. All Scheme Participants and CSMs are expected to comply with its provisions. The EPC has produced the SEPA Cards Framework that sets out high-level guidelines for establishing a harmonised market in card payments in SEPA. This document is not intended to have legal effect but rather to set out over-arching principles for creating a SEPA market in card payments. The EPC will not be responsible for any implementation action in respect of the SEPA Cards Framework and its operations are outside the scope of these Internal Rules. The Single Euro Cash Area Framework provides non-binding guidance on harmonising the distribution and processing of SEPA cash with a view to encouraging merchants and consumers to migrate to electronic payment methods. The EPC is not responsible for the implementation of strategies set out in this document and its operations are outside the scope of these Internal Rules. 1.3 SEPA Scheme Management Introduction SEPA Scheme Management comprises two functions. The first function involves the administration of the Schemes and the process of ensuring compliance with their rules, as set out in each of their respective Rulebooks, and the second function involves managing the development and evolution of the Schemes. 3 In addition to the EU, EEA Member States and Switzerland, SEPA will also extend to cover the following territories that are considered to be a part of the EU in accordance with Article 299 of the Treaty of Rome: Martinique, Guadeloupe, French Guiana, Reunion, Gibraltar, Azores, Madeira, Canary Islands, Ceuta and Melilla and Aland Islands. Administration and Compliance The administration and compliance function of SEPA Scheme Management establishes rules and procedures for administering the adherence process for each of the Schemes, for addressing cases of claimed non-compliance by Participants with the rules of the Schemes and for addressing situations where Participants are unable to resolve their grievances through local, national dispute resolution methods. The administration and compliance processes aim to ensure that the Schemes are administered fairly and transparently at every stage in accordance with the Rulebooks and general principles of applicable law. The administration and compliance function shall be performed by the SMC, with some input from the EPC Plenary on matters relating principally to the policy of the Schemes. The SMC shall have wide decision-making power in respect of each of its functions however, it shall be accountable to the EPC Plenary. The EPC Plenary shall exclusively have the power to appoint members of the SMC, and if required, to remove them from office, as set out in detail in these Internal Rules. The SMC shall perform the administration and compliance function in accordance with the procedures set out in these Internal Rules. Development and Evolution The development and evolution function of SEPA Scheme Management establishes formal change management procedures for the Schemes. The change management procedures aim to ensure that the Schemes are kept relevant for their users and up-to-date, with structured processes for initiating and implementing changes to the Schemes, the Rulebooks and related documentation. An important component of change management is the innovation of ideas for enhancing the quality of existing Schemes as well for developing new schemes, based always on sound business cases. The development of change proposals is to be carried out through clear, transparent and structured channels, which take into account the views of Scheme Participants, suppliers and end-users as well as other interested groups. That is to say, the development and evolution function provides a structured and transparent means through which Participants, users and suppliers can participate in a dialogue with the EPC, so that proposals for change are openly considered by all relevant parties. The development and evolution function shall be performed by the EPC Plenary, supported by the SPS WG. The EPC Plenary and the SPS WG shall perform the development and evolution function in accordance with the procedures set out in these Internal Rules. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 8 - 19 June 2007 2 ADMINISTRATION AND COMPLIANCE 2.1 Definition of Administration and Compliance Roles 2.1.1 Role of the Scheme Management Committee The SMC is responsible for performing the administration and compliance functions of SEPA Scheme Management. The role of the SMC is limited to the following: - Adherence ? the SMC shall be responsible for administering the adherence process for becoming a Participant in the Schemes; - Conciliation ? the SMC shall be responsible for establishing and administering a conciliation process for Participants who are unable to resolve grievances relating to the Schemes through local dispute resolution methods; and - Complaints ? the SMC shall be responsible for investigating complaints made against Participants for alleged breaches of the Rulebooks, evaluating such complaints and determining appropriate sanctions against Participants who are found to be in breach. - Appeals - the SMC shall be responsible for hearing appeals brought in respect of decisions taken by the SMC in accordance with a fair process that is separate from the process of decision-making at first instance. The SMC has wide decision-making power in relation to the exercise of the functions outlined above. The SMC shall be accountable to the EPC Plenary. The Chair of the SMC is required to report to the EPC Plenary at each EPC Plenary meeting and may report to the EPC Plenary more regularly if required. The EPC Plenary has the power to remove members of the SMC, or the SMC as a whole in accordance with section 2.1.4. 2.1.2 Composition of the SMC [THE EPC PLENARY SHALL DETERMINE THE COMPOSITION OF THE SMC. THE PROPOSAL BEFORE THE EPC PLENARY IS THAT THE SMC WILL COMPRISE 3 INDEPENDENT MEMBERS, OF WHICH ONE WILL BE THE SMC CHAIR. ALL INDEPENDENT MEMBERS SHALL HAVE VOTING RIGHTS]. The definition of an Independent Member is set out in section 2.1.6 of these Internal Rules. The rules set out below are subject to further revision in accordance with the option chosen by the EPC Plenary. The SMC shall be composed of 12 members, one of which shall be the Chair of the SMC. [The SMC shall be required to have [3] Independent Members]. [The Chair of the SMC shall be an Independent Member]. The Chair of the SMC is appointed by the Plenary in accordance with the Nominating Process set out in section 2.1.7 of these Internal Rules. 2.1.3 Duration of Appointment Each member shall hold office for a term of 3 years, with the possibility of re-election for a further term of 3 years. Therefore, a member of the SMC may serve on the SMC for a maximum duration of 6 years. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 9 - 19 June 2007 Each member who does not act as the Chair, may resign from the SMC by giving notice in writing to the Chair and the NGC not less than 30 Calendar Days? prior to leaving the SMC. A Chair may only resign from the SMC by giving notice in writing to the NGC not less than 60 Calendar Days? prior to leaving the SMC. In exceptional cases, a member of the SMC, including the Chair, may be removed from office by a resolution of the EPC Plenary, as set out in section 2.1.4. 2.1.4 Termination of Appointment by Resolution of the EPC Plenary The EPC Plenary may by resolution vote to remove from office either an individual SMC member, a group of such members or the SMC as a whole. This power may only be exercised if the EPC Plenary, after due and proper consideration, reasonably believes that either an individual SMC member, a group of such members or the SMC as a whole is performing the functions of the SMC in a manner evidencing serious misconduct, a dereliction of duty, bad faith, or gross negligence. The EPC Plenary may further exercise this power where, after due and proper consideration, the EPC Plenary reasonably believes that a member of the SMC does not have the capacity to perform the function of the SMC. Any SMC member removed from the SMC by resolution of the EPC Plenary shall cease to be a member of the SMC with either immediate effect or on such a date as the EPC Plenary may specify taking into account the outstanding obligations of the SMC member to the SMC and to Scheme Management. A member of the SMC removed in this manner shall be notified in writing of his or her removal from the office of SMC member. 2.1.5 Criteria for Membership (EPC Related Member) A member of the SMC shall be chosen on the basis of his or her suitability and expertise for the position ahead of any other consideration. A prospective member of the SMC must therefore be of good repute, possess appropriate academic and vocational qualifications together with relevant work experience and a proven track record at a senior level in the payments services sector. Subject to the foregoing, the SMC shall aim to represent as far as reasonably practicable the composition of Scheme Participants, ensuring at all times that this composition fairly represents a balance of the country, size, and industry sectors of Scheme Participants and includes an appropriate representation of members from SEPA countries where the euro is the official currency. A member of the SMC may not also act as a representative of an EPC member in the EPC Plenary. If a Plenary representative of an EPC member wishes to be considered for the position of SMC member, he or she is obliged to cease acting as a Plenary representative of an EPC member before assuming the role of an SMC member. 2.1.6 Criteria for Membership (Independent Member) An Independent Member is a member who can display the highest standard of professional integrity and objectivity in relation to Scheme Management. An Independent Member should be a professional of good repute, with appropriate skills, who has a reasonable knowledge of the payments services sector but who is not employed or is otherwise affiliated with a Scheme Participant or its banking communities, service providers or a payment services user group or user association. A prospective Independent Member must possess appropriate academic and vocational qualifications for the position together with relevant work experience and a proven track record in a profession. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 10 - 19 June 2007 It is envisaged that an Independent Member shall provide expertise to the SMC as well as adding breadth to the knowledge base of the SMC membership. After NGC consultation, the EPC Plenary shall have complete discretion in deciding whether a member is an Independent Member in accordance with this section 2.1.6. 2.1.7 Criteria for Membership (Chair) A Chair of the SMC shall be [an Independent Member] chosen on the basis of his or her suitability and expertise for the position ahead of any other consideration. A prospective Chair of the SMC must therefore be of good repute, possess appropriate academic and vocational qualifications together with relevant work experience and expertise. A Chair shall be required to demonstrate a proven track record of leadership in his or her professional field together with relevant management experience. After NGC consultation, the EPC Plenary shall have complete discretion in choosing a Chair in accordance with these criteria. 2.1.8 Duties of SMC Members All SMC Members shall be required to act in accordance with the following general principles: ? each SMC member shall act in accordance with the provisions of these Internal Rules at all times for the duration of his or her term in office; ? each SMC member shall owe a duty to act in the best interests of the Schemes with a view to ensuring that the Schemes are administered efficiently, fairly and professionally; ? each SMC member shall observe the highest standards of integrity, fairness and professionalism at all times; ? as and when arising, each SMC member is obliged to disclose and manage any conflict of interest, as set out in further detail in Appendix 2; ? each SMC member shall act in a timely manner in respect of cases before the SMC; ? each SMC member shall be subject to a duty of confidence in respect of cases pending before the SMC. A member shall not discuss details of cases pending before the SMC with persons other than those on the SMC or persons engaged by the SMC to assist the SMC with the performance of its tasks and who are at all times subject to a duty of confidentiality in respect of their engagement; ? each SMC member agrees to act impartially in fulfilling the obligations of the SMC, notwithstanding his or her membership of a particular banking community, industry sector or position of employment. As part of this duty, an SMC member must be mindful of and refuse any inducements, rewards, or other gifts offered to him or her in the performance of his or her duties, ensuring at all times that he or she acts and is seen to act in accordance with the highest standards of independence and impartiality; ? each SMC member must ensure that decisions taken by him or her in the course of carrying out the functions of the SMC are based upon a sound understanding of the relevant issues and after due and proper consideration of the issues before the SMC; and ? each SMC member shall endeavour as far as reasonably practicable to carry out his or her duties in the SMC with reasonable skill, care and diligence. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 11 - 19 June 2007 2.1.9 EPC Plenary Role in Policy of SMC The EPC Plenary shall be able to raise issues arising from the work of the SMC at meetings of the EPC Plenary. The EPC Plenary shall not comment on specific cases pending before the SMC, but may discuss matters of SMC policy to ensure that the SMC is acting within its scope and performing its role in a proper manner. The EPC Plenary shall be able to raise issues arising from the work of the SMC in order to discuss policy issues arising in respect of the Rulebooks. The SMC may report to the EPC Plenary to raise issues relating to the substance or interpretation of the Rulebooks and the operation of the Schemes. 2.1.10 SMC - Key Roles and Responsibilities The SMC shall be responsible for performing the following functions of SEPA Scheme Management: ? Adherence ? Conciliation ? Complaints (together, the "Compliance Functions") ? Appeals (the "Appeals Function") Compliance Functions SMC members who are not charged with carrying out the Appeals Function shall perform the Compliance Functions of Scheme Management. In respect of the Compliance Functions, relevant SMC members shall be responsible for performing investigation, evaluation and decision-making functions in respect of a particular case appearing before it. It shall be open to the SMC to carry out any or all tasks in respect of such cases either as a whole, or to delegate the performance of its tasks to a group of such members of the SMC. All determinations by the SMC in adherence and complaints cases shall be taken by all of the members of the SMC acting together, excluding those members of the SMC that are charged with carrying out the Appeals Function. Appeals Function The SMC shall nominate 3 of its members to be responsible for carrying out the Appeals Function of Scheme Management, as described in detail in section 2.5 of these Internal Rules. [One of the members nominated for this role must be an Independent Member]. In addition, at least one of the members of the SMC nominated to carry out the Appeals Function must have some legal expertise. In respect of the Appeals Function, the SMC shall be responsible for performing evaluation and decision-making functions in respect of a particular case appearing before it. Members of the SMC that are responsible for performing the Appeals Function may not generally participate in decisions or discussions concerning any cases arising from the Compliance Functions of Scheme Management. The SMC shall make reasonable efforts to ensure that members of the SMC who are responsible for carrying out the Appeals Function remain in this role for the duration of their term in office. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 12 - 19 June 2007 The duties of the SMC in respect of each of the Compliance Functions and the Appeals Function are set out in detail in these Internal Rules. 2.1.11 Meetings of the SMC The SMC shall meet on a regular basis and generally not less than 4 times every year. The SMC may convene more regularly if it is appropriate to do so in the exercise of its duties. The SMC is not obliged to convene if it is not charged with any tasks in respect of its Scheme Management duties. Meetings of the SMC may be held either face-to-face or by telephone or teleconference. A member of the SMC shall be deemed to be present at a meeting of the SMC if he or she is able to participate through any of these means. The SMC may meet as a whole to discuss general issues relating to the policy, strategy and role of the SMC. Such meetings shall not involve discussions of specific cases appearing before the SMC. All members of the SMC may be present at such meetings. Alternatively, the SMC may meet to discuss the conduct of cases appearing before it. Where the SMC meets to discuss the conduct of particular cases, members of the SMC that are charged with performing the Appeals Function may never participate in any capacity in meetings to discuss cases arising under the Compliance Functions. Similarly, except as otherwise indicated below, members of the SMC that perform duties in respect of the Compliance Functions may never participate in meetings held to discuss the conduct of appeals cases. Meetings of the SMC are generally called by the Chair on giving reasonable notice in writing to the SMC members, in either paper or electronic format. Members of the SMC are required to make every reasonable effort to attend a meeting convened in accordance with this section. Where a member is unable to attend, he or she must give reasonable notice to this effect to the Chair. For general meetings, an SMC member who is unable to attend may wish to appoint a proxy from amongst the remaining SMC members to vote at the meeting on his or her behalf. For meetings to discuss cases before the SMC, members carrying out the Appeals Function may never be appointed as proxies in respect of other SMC members. Where a member carrying out an Appeals Function is unable to attend a meeting, he or she may appoint another member from the SMC to attend the meeting on his or her behalf, ensuring at all times that any SMC member appointed in this manner is not connected in any way, nor has had any influence in respect of any appeal discussed at the meeting. An SMC member wishing to appoint a proxy must give reasonable notice to the Chair in writing. A notice to appoint a proxy may be given either electronically or in paper format. An SMC member may not hold a proxy for more than 2 other SMC members at any SMC meeting. Where an SMC member is unable to attend SMC general meetings and if the SMC member is unable to attend 3 consecutive general meetings of the SMC, the matter will be brought to the attention of the NGC. The Chair must make every reasonable effort to attend a meeting convened in accordance with this section. Where the Chair is unable to attend in a particular instance, he or she may appoint another SMC member in writing to carry out the functions of the Chair. In such cases, the Chair must notify other members of the SMC in writing of this appointment. Where a Chair is unable to attend SMC general meetings and if the Chair is unable to attend 3 consecutive general meetings of the SMC, the matter will be brought to the attention of the NGC. Minutes of each meeting must be prepared and filed. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 13 - 19 June 2007 2.1.12 Quorum For a meeting involving all of the members of the SMC, the quorum for the meetings is at least 2/3rds of the total membership of the SMC present either in person or by proxy. Where the quorum is not reached, a further meeting may be called within 30 Calendar Days of the date of the first meeting and this second meeting may properly convene and carry out SMC business, if 50% of SMC members are present either in person or by proxy and as long as the Chair is present. Where tasks have been delegated to a group of SMC members, the quorum shall include at least 2/3rds of those members of the SMC to whom such authority has been delegated, present either in person or by proxy. 2.1.13 Voting Each member of the SMC shall be entitled to one vote. A resolution to nominate a member of the SMC to perform the Appeals Function in accordance with section 2.1.10 requires the approval of at least 75% of those present and voting on the resolution at a validly convened meeting of the SMC. In respect of all other matters discussed by the SMC as a whole or by a sub-set of the SMC acting under its delegated authority, resolutions may be passed with the approval of more than 50% of those present and voting on the resolution at a validly convened meeting of the SMC or of its relevant members. On a vote, a member of the SMC must disclose and manage any conflict of interest that exists or that might reasonably be expected to arise in accordance with Appendix 2. 2.1.14 Other Support The SMC may engage any appropriate person in order to carry out tasks related to the work of the SMC at the cost of the EPC and within the budget of the SMC. The SMC shall ensure that any person engaged in this manner shall be subject to a duty of confidentiality in respect of information acquired in the course of its engagement with the SMC. The SMC shall be entitled to consult third party advisors at its discretion, provided always that the SMC is able carry out its duties in accordance with the general principles set out in section 2.1.8. The SMC shall ensure that any person consulted in this manner shall be subject to a duty of confidentiality in respect of information acquired in the course of its engagement with the SMC. 2.1.15 Nominating Process The nomination of candidates for the position of SMC member shall be carried out by the EPC Plenary. The NGC shall recommend suitable candidates for this position to the EPC Plenary in accordance with its role, as set out in Article 11.2 of the EPC Charter. Subject always to the criteria set out in 2.1.5-2.1.7, the EPC Plenary shall endeavour to ensure that the composition of the SMC reflects a balanced composition of Participants, bringing together a fair representation of the country, size and industry sectors of Scheme Participants, including an appropriate representation of members from SEPA countries where the euro is the official currency. The NGC shall provide a list of candidates for the position of SMC member to the EPC Plenary 30 Calendar Days in advance of an EPC Plenary meeting. This list shall include a summary of the candidates? qualifications for the position. The NGC should only include details of suitable candidates on such a list. The EPC Plenary shall approve suitable candidates by resolution. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 14 - 19 June 2007 The NGC may not recommend and the EPC Plenary may not appoint a Plenary representative of an EPC member to the position of SMC member or propose his or her name to the EPC Plenary, without first ensuring that such a candidate has ceased to act as a Plenary representative of an EPC member. The NGC may not recommend and the EPC Plenary may not appoint a candidate to the position of SMC member, or propose his or her name to the EPC Plenary, if such a candidate has already served on the SMC for the maximum term set out in these Internal Rules. The NGC may not recommend and the EPC Plenary may not appoint a candidate to the position of SMC member, or propose his or her name to the EPC Plenary, if there are reasonable grounds to believe that such a candidate is subject to personal insolvency proceedings in his or her local jurisdiction or may be imminently subject to such proceedings. The NGC may not recommend and the EPC Plenary may not appoint a candidate to the position of SMC member, or propose his or her name to the EPC Plenary, if there are reasonable grounds to believe that such a candidate is a person of ill-repute who may bring the SMC and the Schemes into disrepute. 2.1.16 Role of the Secretariat The Secretariat shall provide secretarial and administrative support to the SMC. The Secretariat shall be responsible for referring cases arising in respect of Scheme Management to the SMC, as necessary. 2.1.17 Information Service The Secretariat shall be responsible for administering an information service on SEPA issues. The information service shall be open to everyone. Requests for information to the information service shall be in written format only, either by letter, fax or email. The information service shall endeavour to respond to requests for information within 30 Business Days from the date of receiving the request for information. 2.1.18 Additional Optional Services ("AOS") The following principles will apply to AOS: 1. All AOS must not compromise interoperability of the Schemes nor create barriers to competition. The SMC should deal with any complaints or issues concerning these requirements brought to its attention in relation to compliance with the Rulebooks as part of its normal procedures. 2. AOS are part of the market space and should be established and evolve based on market needs. Based on these market needs, the EPC may incorporate commonly used AOS features into the Schemes through the SEPA Schemes change management processes. 3. There should be transparency in relation to community AOS. In particular, details of community AOS relating to the use of data elements present in the UNIFI (ISO 20022) XML payment standards (including any community usage rules for the SEPA core mandatory subset) should be disclosed on a publicly available website (in both local language(s) and English). The SMC may receive complaints from Participants in relation to the operation of community AOS in respect of the above principles. Complaints received by the SMC on this matter shall be dealt with in an appropriate manner in accordance with these Internal Rules. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 15 - 19 June 2007 EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 16 - 19 June 2007 2.1.19 Support for Risk Management The SMC shall provide basic guidance on risk management issues pertaining to the Rulebooks to Participants and to the EPC. If the Rulebooks set out provisions on risk management (as may be the case for the SEPA Direct Debit Scheme Rulebook) that are construed as imposing an obligation on Participants, the SMC shall provide guidance on such risk management provisions. The SMC shall not otherwise be obliged to offer any guidance on risk management issues. Requests for guidance on risk management shall be in written format only, either by letter, fax or email. A request for guidance shall be sent to the Secretariat for the attention of the SMC. In exceptional circumstances, the SMC may provide ad hoc advice on risk management issues by telephone. The SMC shall endeavour to provide risk management advice within 30 Business Days of receiving the request for guidance. 2.1.20 [Expenses Independent Member(s) of the SMC shall be entitled to claim reasonable expenses. The SMC Independent Member shall also be able to claim a daily stipend for each full day spent on working on SMC related matters. The level of the stipend paid to the SMC member shall depend on the work undertaken and the time spent on carrying out such work.] 2.1.21 Record Keeping The Secretariat shall keep a record of all agenda and minutes of meetings of the SMC. The Secretariat shall use reasonable efforts to keep records relating to appeals separately from those relating to other compliance aspects of Scheme Management. Records may be held in either paper or electronic format. The SMC shall in its absolute discretion decide whether these minutes and related documentation may be made publicly available on the EPC website or on the internal extranet of the EPC. 2.2 Rules for Adherence4 2.2.1 Eligibility for Participation in Schemes In order to be eligible to participate in the Schemes, each applicant must satisfy the eligibility criteria set out in Chapter 5.4 of the Rulebooks. The SMC shall accept any applicant that fulfils the criteria set out in Chapter 5.4 of the Rulebooks and will only reject applications on the basis of failure to meet these criteria. 2.2.2 Rules for Adherence by an Entity in a Group/Decentralised Structure Each legal entity that seeks to adhere to one or both of the Schemes must agree to accept the rights and obligations of a Participant in relation to one or both of the Schemes. Upon admission to one or both Schemes, the adhering legal entity shall assume all of the rights and responsibilities arising from admission to one or both of the Schemes. 4 This section sets out a description of the general rules relating to adherence to the Schemes. The EPC shall separately produce a detailed document for describing the practical steps that must be taken to adhere together with guidance on the adherence process for the year 2007/2008. A subsidiary entity or affiliate of an adhering entity, i.e. each entity that has a separate and distinct legal personality within the adhering entity's group or organisational structure, must adhere separately from a parent or group entity. A subsidiary or affiliate shall be a Scheme Participant in its own right and shall assume all the rights and responsibilities arising from admission to one or both of the Schemes. A branch of an adhering entity, i.e. an entity that does not have separate legal personality, whether located in the jurisdiction of the adhering entity or in another SEPA jurisdiction, shall be deemed to be legally part of the adhering entity and able to carry out SEPA transactions in accordance with the Rulebooks. 2.2.3 Rules for Signing the Adherence Agreement An entity may sign the Adherence Agreement on its own behalf. Alternatively, an entity may give legal authority to an agent to sign the Adherence Agreement on its behalf (for example, an agent could be a parent company, another adhering entity or banking association). An entity that appoints an agent to sign the Adherence Agreement on its behalf must ensure that the agent is given the necessary legal authority to sign. An agent must demonstrate that it possesses the legal authority to bind an adhering entity in accordance with the local law of the entities involved. An agent signing the Adherence Agreement on behalf of other entities must demonstrate by way of legal opinion of external or internal legal counsel in a form specified by the EPC that it possesses the requisite legal authority to bind such entities. This provision permits members of a banking community to adhere to one or both of the Schemes at the same time by nominating an agent to complete the Adherence Agreement in respect of each member. Similarly, a parent company may sign an Adherence Agreement in respect of some or all of its subsidiaries and an entity in a group or de-centralised structure may sign an Adherence Agreement in respect of each of the other entities in the group or de-centralised structure. In each case, an entity signing the Adherence Agreement that acts as an agent on behalf of another must show that it possesses the legal authority to do so. 2.2.4 National Adherence Support Organisation ("NASO") The EPC shall, in conjunction with a national banking community, identify one or more NASOs in respect of each SEPA community. A NASO shall be responsible for providing basic guidance on the adherence process and on adherence applications through a helpdesk, for liaising with the SMC in respect of an application (as required) and for such other tasks as the EPC or any organ of the EPC may request it to perform from time to time. A NASO shall also carry out a basic preliminary review of an adherence application, if requested to do so. The EPC shall publish a list of NASOs on the EPC website. A NASO could be a national banking association(s) or a regulatory body, which has agreed to conduct the task on behalf of the national community. Except as otherwise indicated in this section, an adhering entity must consult a NASO on its adherence application and may submit an application directly to the EPC. Only multi-country entities that are signing as agent on behalf of four or more of their subsidiaries or arranging the completion of the adherence application by such subsidiaries may submit an adherence application directly to the EPC without first consulting a NASO. Such entities are nevertheless free to consult a NASO before submitting their application to the EPC, should they wish to do so. In such cases, where an entity wishes to consult a NASO, it may use the NASO of any of the adhering entities on whose behalf it is signing the adherence application. 2.2.5 Becoming a Participant An application to become a Participant in one or both of the Schemes shall be made using the form of Adherence Agreement set out in Annex 1 of each of the Rulebooks. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 17 - 19 June 2007 An application shall be accompanied by a legal opinion in the form specified by the EPC provided by either internal or external counsel on the capacity and authority of the applicant to become a Participant in one or both of the Schemes. The application for adherence shall be finally submitted to the EPC Secretariat. Except as otherwise indicated in section 2.2.4 of these Internal Rules, before submitting the application, an applicant must consult with the relevant NASO for preliminary guidance on eligibility and documentation involved in the adherence process. The Secretariat shall send a written acknowledgement of receipt of the application to the applicant within 10 Business Days of receiving the application. The SMC, supported by the Secretariat, shall use reasonable efforts to determine the application within 60 Calendar Days of receiving the application. In the event that the SMC requires more time to arrive at a determination, it shall notify the applicant as soon as it is reasonably practicable to do so. The SMC may request the applicant to provide such additional information as may be required by the SMC in the course of determining the application. In the course of determining the application, the SMC may take into consideration views expressed by the following bodies in relation to the application: ? other Participants; ? banking communities; and ? national regulators (this term extends to include such bodies as insolvency officers, law enforcement authorities and local courts). It is also open to the SMC to take into account views expressed by such other persons or bodies as it considers appropriate. In the case of a successful application, the applicant or its agent will receive a written notification of admission to one or both of the Schemes. The applicant becomes a Participant and becomes subject to the Rulebooks on an Admission Date specified by the SMC or, where requested by the applicant and agreed by the SMC, on a deferred Admission Date specified by the applicant in advance to the SMC. The Secretariat may send the written notification to the applicant in paper or electronic format. 2.2.6 Register of Participants The Secretariat shall maintain a register of Participants for each of the Schemes. The register shall contain the name, contact address and other details determined by the EPC in respect of the Participant, together with information about the capacities in which the Participant participates in one or both of the Schemes. The register shall be updated by the Secretariat regularly and at a minimum on a monthly basis. If the Participant changes its details, so that the register does not carry accurate data in respect of the Participant, the Participant shall notify the Secretariat as soon as it is reasonably practicable to do so. It is the responsibility of the Participant to ensure that the Secretariat is provided with information in relation to the Participant that is accurate and up-to-date at all times. The register may be accessed and searched through a website of the EPC, available to all users. The register is not an operational database in respect of Scheme usage. Any operational data needed by Participants in relation to other Participants shall be supplied outside of the Schemes. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 18 - 19 June 2007 2.2.7 Fees It is not planned to levy fees on Scheme Participants, although the EPC reserves the right to recover costs at a future date. This possibility is not contemplated during the early years of the Scheme being launched. 2.2.8 Unsuccessful Applications The SMC may reject an application for participation in one or both of the Schemes if an applicant fails to satisfy the eligibility criteria set out in chapter 5.4 of the Rulebooks. Where an application is rejected, the SMC shall provide the applicant with a letter setting out the reasons for rejecting the application. An applicant may not re-apply to become a Participant until 3 months after the determination of its application by the SMC or after a determination in an appeal begun in accordance with these Internal Rules or after a final determination of a tribunal or court responsible for determining the case. 2.2.9 Appeals An applicant whose application for participation in one or both of the Schemes has been rejected may appeal to the SMC for a re-consideration of its application. A notice of appeal in such cases must be filed within 21 Calendar Days of the applicant receiving a notification of rejection of its adherence application. The appeals notice must include a copy of the adherence application together with a letter supplied to the applicant under section 2.2.8 and any other information required by section 2.5.3 of these Internal Rules. The appeal shall be determined in accordance with section 2.5 of these Internal Rules. 2.3 Conciliation Undertaken by the SMC 2.3.1 SMC Role in Conciliation The SMC shall provide a voluntary conciliation service to Participants and to the EPC. Conciliation may be used for resolving Unresolved Issues that arise in respect of the Rulebooks only. Issues concerning SMC determinations on adherence applications or on complaints must be addressed through the appeals process rather than through conciliation. Conciliation services shall be available with regard to the following: ? Unresolved Issues arising out of the Rulebooks between Participants; ? Unresolved Issues arising out of the Rulebooks between a Participant and the EPC. Conciliation services shall only be available to a Participant where the Participant can demonstrate that it has used reasonable endeavours to resolve the matter amicably, after dialogue with banking communities and by using conciliation or other dispute resolution processes at a local level. SEPA banking communities are expected to make a body available to Scheme Participants for this purpose. Conciliation services shall be administered in a manner that is efficient and cost-effective, with a view to ensuring a rapid conclusion to the Unresolved Issue. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 19 - 19 June 2007 The SMC shall appoint a suitable number of conciliators from the body of relevant SMC members to hear the Unresolved Issue. The conciliators shall make a recommendation to the parties involved. This recommendation shall not be binding upon them and will be without prejudice to further proceedings between the parties. As set out in further detail in Appendix 2, conciliators must be mindful of any conflict of interest arising in relation to the subject matter of the conciliation or to any of the parties to the conciliation. In the event that a conciliator is aware that a conflict of interest exists, he or she shall make this known to the SMC immediately and the SMC can appoint another conciliator(s) from the relevant members of the SMC to carry out the conciliation. If the SMC is unable to find a conciliator(s) from the SMC to act in respect of the Unresolved Issue, the Chair may appoint a conciliator(s) from outside of the SMC and the EPC, provided always that the parties to the Unresolved Issue agree to this appointment. In cases where the conciliation is between a Participant and the EPC, the SMC shall ensure that conciliators from outside the SMC and the EPC are appointed, provided that both the EPC and the Participant agree to this appointment. 2.3.2 Application for Conciliation An application for conciliation shall be made in writing and filed with the Secretariat. The application shall clearly state the name of the other party involved together with details of the Unresolved Issue. The application shall also be accompanied with a written statement of consent from the other party stating that it wishes to submit to conciliation. The Participant shall give a copy of the application and accompanying information to the other party involved in the Unresolved Issue. Within 15 Business Days starting from the date that the application was filed, the Secretariat shall request the other party to file with the Secretariat any statement of facts in relation to the Unresolved Issue. The other party may withdraw from the conciliation at any time. If the other party withdraws in this manner, the conciliation proceedings shall be terminated with immediate effect and the conciliator shall not deliver a recommendation. The costs provisions set out in section 2.3.6 of these Internal Rules continue to apply. 2.3.3 Conciliation Proceedings The conciliator shall aim to resolve the Unresolved Issue between the parties in a manner that is fair, open and amicable. Unless otherwise agreed, conciliation proceedings shall be in private. The conciliator shall consider all the evidence put before the conciliator and allow both parties to provide clarification and elaboration on the points raised in the Unresolved Issue. The conciliator shall then recommend a proposed settlement to the Unresolved Issue. If a settlement is reached, the settlement shall be written down by the conciliator and signed by the parties. The parties may keep a copy of the settlement. If the parties cannot reach settlement, the conciliator shall close the conciliation proceedings. The parties may the take such procedures as they consider appropriate and may take the matter to arbitration or litigation in accordance with section 2.3.7. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 20 - 19 June 2007 2.3.4 Conciliation Involving the EPC Where conciliation involves the EPC, the conciliators shall always be individuals who are not connected to either the EPC or to the Participant in any way. The costs of engaging conciliators in such cases shall be borne by the EPC. In all other respects, the conciliation proceedings shall follow the procedure set out in this section. 2.3.5 Report of Conciliators Following the conclusion of conciliation proceedings, whether by way of settlement or voluntary termination by parties to the conciliation, the conciliators may prepare a report on the conciliation for the SMC. The report may contain such details relating to the conciliation proceedings as the conciliators wish to include. The report shall be confidential and may only be made available to relevant members of the SMC. Where the conciliators become aware of serious misconduct by the Participant such as behaviour evidencing fraud or other such serious violations of the law, they may bring this to the attention of the relevant national regulator or national authority. 2.3.6 Costs Each party shall bear its own costs for the conciliation, unless otherwise agreed between the parties to the conciliation and the conciliators. Where the conciliation is terminated before either a settlement is reached or before the conciliators close the conciliation, each party shall bear its own costs, unless the parties and the conciliators agree to a different allocation of costs. 2.3.7 Further Steps - Arbitration v Litigation Following consultation with the SMC, if the parties are unable to settle an Unresolved Issue through conciliation, or where such a conciliation process has not taken place, if a Participant gives another Participant notice that an Unresolved Issue exists and if the Unresolved Issue has not been resolved within 30 Calendar Days of service of the notice, the Unresolved Issue shall be referred by the SMC to arbitration. No Participant shall resort to arbitration against another Participant under the Rulebook until 30 Calendar Days after the referral of the Unresolved Issue to the SMC. Unless parties to the Unresolved Issue otherwise agree, any Unresolved Issue which is unresolved 30 Calendar Days after the referral of the Unresolved Issue to the SMC shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with those Rules. The seat of the arbitration shall be Brussels. The EPC, as represented by an appropriate member of the SMC, shall have the right to participate in the arbitration. However, if the Unresolved Issue is referred to arbitration in accordance with this section, the parties to the Unresolved issue may agree to submit to local arbitration in a SEPA jurisdiction. If the relevant Participants elect to submit to such local arbitration, they shall conduct the arbitration under rules agreed between them. The jurisdiction chosen by the relevant parties for such local arbitration must be substantially connected to the conduct of the Unresolved Issue. The EPC, as represented by an appropriate member of the SMC, shall have the right to participate in the arbitration. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 21 - 19 June 2007 Any arbitration between Participants under the Rulebook shall (unless the relevant Participants agree otherwise, and in an Unresolved Issue in which the EPC is participating, with the consent of the EPC) be conducted in the English language. Alternatively, following a failure by the relevant Participants to resolve an Unresolved Issue in accordance with the steps set out above, the parties to the Unresolved Issue may agree to submit to such other dispute resolution process (other than arbitration) as they consider appropriate, including litigation. If the relevant parties submit to litigation in accordance with this section, the relevant Participants shall conduct the litigation in a jurisdiction, and under such processes as are determined by established principles of conflicts of laws. In arbitration or litigation proceedings, the Rulebooks shall be governed by and interpreted in accordance with Belgian law. A court or arbitrator may however apply such rules of process in relation to the proceedings as may be applicable under established principles of conflicts of laws. The parties shall inform the SMC of the outcome of any litigation or arbitration or other dispute resolution methods conducted by them. The parties may consult the SMC on matters relating to the interpretation of the Rulebooks in the course of any such arbitration or litigation proceedings. 2.4 Complaints Submitted to the SMC 2.4.1 Role of SMC in Complaints The SMC shall oversee the implementation of the Rulebooks by Scheme Participants. The SMC may investigate breaches or potential breaches of the Rulebooks following a complaint made by a Scheme Participant to the SMC. The SMC may also receive complaints from Participants in relation to the operation of community AOS, as set out in section 2.1.18 of these Internal Rules. Unless otherwise stated, a complaint may be submitted by any Scheme Participant and must be filed in writing with the Secretariat. A complaint that is filed with the Secretariat must state the name of the Participant that is the subject of the complaint (the "Affected Participant") together with details of the complaint. Members of the SMC that are charged with carrying out the Appeals Function may never file a complaint against a Participant. In addition, the SMC may investigate breaches or potential breaches of the Rulebooks of its own accord. For the purposes of this section, investigations made by the SMC into breaches or potential breaches of the Rulebooks, whether or not initiated by the SMC itself, shall be referred to as complaints. 2.4.2 Key Principles In the course of carrying out its function in relation to complaints, the SMC shall ensure that it acts in accordance with the following general principles: ? the SMC shall act in a manner that is impartial and objective at all times; ? the SMC shall act in a manner that is fair to all parties, taking into account the circumstances of each case; ? the SMC shall ensure that, as far as possible, it acts in a manner that is transparent, open and intelligible to the parties; and EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 22 - 19 June 2007 ? the SMC shall ensure that it acts in a manner that is proportionate to the seriousness of the matter before it. The deliberations of the SMC and any discussions held in the course of evaluating and investigating the complaint shall be private and confidential, unless otherwise agreed between the parties. 2.4.3 Investigation of Complaints The SMC may nominate a group of members of the SMC to investigate and evaluate a complaint. The SMC shall immediately notify the Affected Participant that it is subject to investigation by the SMC. The Affected Participant may be required to cease any activity that could constitute conduct suspected of being in breach of one or both of the Rulebooks. Members investigating the complaint may in the course of the investigation call for such information and documentation from the Affected Participant as may be relevant for determining whether a breach of one or both of the Rulebooks has taken place. The Affected Participant shall use reasonable efforts to provide such information to the relevant SMC as is within the Affected Participant's possession, custody or control. The SMC may additionally require the Affected Participant to give all reasonable assistance in the course of the SMC investigation. A failure to provide such assistance shall be deemed to be a breach of Scheme rules and may therefore be actionable in accordance with this section. In addition, in the course of the investigation, relevant SMC members may consult Participants as well as end-users and suppliers and may call for information and documentation from such bodies, liaising through Scheme Participants. Members investigating the complaint may engage any person in order to carry out tasks related to the investigation at the cost of the EPC and within the budget of the EPC. The SMC may also engage a legal professional to give legal advice on any aspects of the investigation at the cost of the EPC and within the budget of the EPC. 2.4.4 Evaluation of Complaint The SMC shall evaluate any information that it may obtain in the course of the investigation. It may engage a skilled person in order to carry out tasks related to the evaluation of the complaint as well as a legal professional to give legal advice on any aspects of the evaluation and adjudication of the complaint at the cost of the EPC and within the budget of the EPC. The SMC shall ensure that any person engaged in this manner shall be subject to a duty of confidentiality in respect of information acquired in the course of its engagement with the SMC. In the course of this evaluation, the Affected Participant shall be invited to discuss the complaint with the SMC. The Affected Participant may seek legal advice at any stage of this process at its own cost. 2.4.5 Sanctions On completion of the evaluation, the SMC shall prepare a report on the conduct of the case, setting out the facts of the case and a preliminary evaluation of the complaint. Following the evaluation of the complaint, the SMC may consider that: ? no further action should be taken in relation to the alleged breach of the Rulebook if the SMC considers that either there is no evidence of a breach, or that the breach is of a trivial nature; EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 23 - 19 June 2007 ? discussions should take place with the Affected Participant to decide how to proceed in respect of a breach that has already occurred or one that is continuing - no sanctions are contemplated at this stage; ? discussions should take place with the Affected Participant and the Affected Participant should be sanctioned. If the SMC considers that the Affected Participant should be sanctioned, the SMC shall send a written notice to the Affected Participant setting out details of the complaint and the sanction proposed, the report and any material that is believed to be relevant to the matter. The Affected Participant shall have 30 Calendar Days following receipt of the notification to accept the sanction, or to present written or oral representations to the SMC. The Affected Participant may consult legal counsel at any stage of the sanctioning process. In considering any representations made to it, the SMC is not bound to follow rules of evidence, as followed in a court or tribunal. It will not normally consider oral evidence. Any party may however adduce written evidence in the course of the deliberations of the SMC and make such representations as it considers appropriate in accordance with this section. Within 30 Calendar Days of hearing representations from the Affected Participant, the SMC shall determine the sanction to be made against the Affected Participant. The SMC shall notify the Affected Participant of its determination. The sanctions available to the SMC are the following: ? private warning ? written notification of complaint ? public warning ? report to a national regulator or equivalent national authority, including a NASO ? termination Private Warning The SMC may give a private warning to the Affected Participant. The private warning shall constitute a formal notice to the Affected Participant and aims to deter the Affected Participant from committing a further breach of one or both of the Rulebooks or to cease conduct that is in breach of one or both of the Rulebooks. A record of the private warning shall be made by the SMC. This record shall be confidential. Written Notification of Complaint The SMC may give a written notification of a complaint to the Affected Participant. A written notification constitutes a formal reprimand to the Affected Participant. The written notification shall set out details of the breach and is aimed to deter the Affected Participant from committing a further breach of one or both of the Rulebooks or to cease conduct that is on breach of the one or both of the Rulebooks. The SMC may publish details of this sanction on the website of the EPC. Public Warning The SMC may give a public warning to the Affected Participant. The public warning shall constitute a formal notice to the Affected Participant and aims to deter the Affected Participant from committing a further breach of one or both of the Rulebooks or to cease conduct that is in breach of one or both of the Rulebooks. The public warning shall publish the name of the Affected Participant, together with details of the breach, on the website of the EPC. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 24 - 19 June 2007 Report to National Regulator In addition to giving a private warning, public warning or written notification of breach, the SMC may report the Affected Participant to its national regulator, NASO or to an equivalent national authority. The regulator shall be provided with the name of the Affected Participant together with details of the conduct of the Participant. Termination In addition to making a report to a relevant national regulator or giving a private warning, written notification of breach or public warning to the Affected Participant, the SMC may terminate the participation of an Affected Participant in one of both of the Schemes in the following circumstances: ? where the breach committed by the Affected Participant is sufficiently serious to undermine the operation and integrity of one or both of the Schemes; ? where the Affected Participation has committed a repeated breach of one or both of the Rulebooks, notwithstanding any earlier sanctions given to the Affected Participant by the SMC; ? where the conduct of the Affected Participant displays bad faith or gross negligence towards other Participants or towards the Scheme(s) of which it is part; or ? where the conduct of the Affected Participant displays dishonesty or is grossly unprofessional. Before making a termination order, the SMC may consult with relevant groups to determine the impact of the sanction. Such groups may include other Scheme Participants, the EPC Plenary, clearing and settlement mechanisms and relevant regulators or banking communities. If the SMC decides to terminate the participation of an Affected Participant, it shall make a termination order setting out the terms and conditions on which the termination is to be effected. Such an order shall set out the steps to be taken by the Affected Participant to ensure the continued orderly and efficient operation of the Schemes. Except in exceptional circumstances, this order shall not take effect until the conclusion of appeals proceedings before the SMC that may be commenced in accordance with these Internal Rules, or until such time as the time period for referring a matter to an appeal to the SMC has expired in accordance with these Internal Rules. In the opinion of the SMC, where the conduct of the Affected Participant threatens to seriously undermine the operation of one or both of the Schemes for either other Participants or other users, the order may take effect upon such notice as is specified in the order. In cases where the order takes effect at a time specified by the SMC, the order shall remain in force for as long as the conduct of the Affected Participant continues or until it is revoked by a determination of the case at appeal. In the event of termination, the Affected Participant shall be barred from exercising rights under one or both of the Rulebooks in accordance with the terms and conditions set out in the termination order. The Affected Participant shall fulfil all obligations arising under one or both of the Rulebooks in accordance with the termination order. If the participation of an Affected Participant is terminated, the Affected Participant may re-apply to join either one or both Schemes after 6 months, starting from the date of the termination of its participation. However, an Affected Participant may re-apply earlier if it can demonstrate to the SMC that it has remedied the breach and/or that there is no reasonable likelihood of the Scheme Participant committing the breach in future. The SMC shall publish details of a termination of participation on the website of the EPC together with the relevant order and details of the conduct giving rise to the complaint. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 25 - 19 June 2007 2.4.6 Appeals Arising from Complaints Within 14 Calendar Days of receiving the notification of a sanction, the Affected Participation may appeal to the SMC in accordance with section 2.5. 2.5 Appeals 2.5.1 Introduction to the Appeals Process In this section and unless otherwise stated, a reference to the SMC shall be read as a reference to those members of the SMC who have been nominated to carry out the Appeals Function of Scheme Management in accordance with section 2.1.10 of these Internal Rules. The role of the SMC shall be to determine whether, on the basis of the material put before it by the appellant, a decision reached in complaints and adherence matters was correct and justified. The SMC may request advice from a third party professional, including a legal professional in the course of its deliberations. Deliberations before the SMC shall be conducted in private and shall be confidential unless otherwise agreed between the parties. In considering any representations made to it, the SMC is not bound to follow rules of evidence, as followed in a court or tribunal. The SMC will not normally consider oral evidence. The SMC shall act in accordance with the principles set out in section 2.5.2 to ensure that a matter is handled fairly and impartially. It may stipulate such conditions as it considers appropriate in order to ensure that this obligation is fulfilled. Members of the SMC must ensure that all written information in respect of its Appeals Function, whether in electronic or paper format, is kept separately from documentation held by the SMC in relation to its Compliance Functions so that information is stored in proper manner and is available only to the relevant members of the SMC. The SMC may never have access to information held in respect of cases arising under the Compliance Functions, whether oral or written, until such time as such information is referred to appeal. In the course of determining an appeal, members carrying out the Appeals Function must not discuss details of the case with other members of the SMC, without first ensuring that such discussions are carried out with the agreement of the parties to the appeal. The SMC may engage skilled professionals or the Secretariat to carry out administrative duties arising out of the conduct of appeals before the SMC at the cost of the EPC and within the budget of the EPC. The SMC shall ensure that any person engaged in this manner shall be subject to a duty of confidentiality in respect of information acquired in the course of its engagement with the SMC. 2.5.2 Key Principles In carrying out the Appeals Function, the SMC shall perform its functions in accordance with the following principles: ? the SMC shall act in a manner that is impartial and objective at all times; ? the SMC shall act in a manner that is fair to all parties, taking into account the circumstances of each matter before it; EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 26 - 19 June 2007 ? the SMC shall act in a timely manner to determine matters arising before it; ? the SMC shall allow all parties to make representations and present written material to the SMC; ? the SMC shall ensure that, as far as possible, matters referred to it are dealt with in a way which is transparent, open and intelligible to the parties; and ? the SMC shall ensure that it acts in a manner that is proportionate to the seriousness of the matter before it. ? each member shall be subject to a duty of confidence in respect of appeals cases pending before the SMC. A member shall not discuss details of such cases other than with other members of the SMC that are nominated to carry out the Appeals Function, persons engaged by the SMC to assist the SMC in the exercise of this function, or with relevant parties in the course of appeals proceedings; 2.5.3 Submission of Appeals Notice A person with the right to an appeal under these Internal Rules must file an appeals notice with the Secretariat. An appeals notice shall set out details of the case under appeal, reasons supporting the appeal, together with a copy of the determination that is the subject of the appeal. Within 21 Calendar Days of receiving the appeals notice, the Secretariat shall provide a copy of the appeals notice to those members of the SMC whose decision is the subject of the appeals notice. These SMC members shall have 21 Calendar Days to file written representations in respect of the appeal. They may appoint one or more representatives from their number to take the appeal forward on their behalf A representative appointed in this manner must be an SMC member who has been nominated to carry out the Compliance Functions of Scheme Management in accordance with section 2.1.10. The SMC shall then consider the appeals notice and any representations filed and, within 21 Calendar Days of receiving representations from each party, shall notify all parties of the date of the appeal meeting. At any time before the date of the meeting, the SMC may, but is not obliged to make such directions to the parties as may be useful for the swift and fair determination of the appeal. Such directions may include the following: ? directions to exchange documents relevant for the appeal; and ? directions to exchange names and written statements of any witnesses, including expert witnesses (if any). The SMC shall ensure that all documents and evidence received from the SMC by the SMC or by one or other of the parties is provided to all the parties to the appeal in a timely manner in advance of the appeal meeting. 2.5.4 Meeting The SMC shall aim to determine the appeal between the parties in a manner that is fair, open and amicable at a meeting involving all relevant parties. Unless otherwise agreed, this meeting shall be private. Parties may bring legal representatives to a meeting. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 27 - 19 June 2007 In the event that a party does not attend the meeting, or if both parties do not attend, the SMC may arrive at such determination as it considers appropriate, or may postpone the date of the meeting. The SMC shall consider all the material put before it and allow the parties to make oral representations during the meeting. The SMC shall then deliver a decision on the appeal. The SMC may make either of the following determinations: ? confirm, vary, or reverse the decision of the SMC at first instance; ? impose any sanction that may have been imposed, but was not imposed by the SMC at first instance. The SMC may publish the details of the appeals decision on the website of the EPC. Any decisions of the SMC at first instance that are published on the website of the EPC, if varied or reversed at appeal shall be amended accordingly on the EPC website. A party to an appeal may withdraw from the appeal at any time by giving notice to the SMC. The appeal shall be closed with immediate effect and the SMC may make such determination in respect of the subject matter of the appeal and in respects of the allocation of costs for the appeal as may be appropriate. 2.5.5 Costs Each party shall bear its own costs in respect of the appeal, unless otherwise agreed between the parties to the appeal. 2.5.6 Further Steps Following the determination of the SMC, if a party to the appeal does not consider the issue to have been correctly resolved, it shall be open to that party to attempt to resolve the matter through such means as it considers appropriate, including litigation in a competent court in Belgium. As the EPC shall always be a defendant in such proceedings, the courts of Belgium shall have exclusive jurisdiction in respect of proceedings brought in accordance with this section. Such a party may challenge the decision before the courts of Brussels, but only on the grounds of a serious breach by the SMC of these Internal Rules or of a breach of mandatory rules of law, or on the grounds that the decision, when subject to a prima facie review (examen marginal / marginale toetsing) by the court, appears manifestly incorrect. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 28 - 19 June 2007 3 DEVELOPMENT AND EVOLUTION 3.1 Change Management Processes 3.1.1 Change Management - Guiding Principles It is a key objective of the EPC that the Schemes are able to develop with an evolving payment services market. To meet the demands of Participants, end-users and banking communities, the Schemes shall be subject to a change management process that is structured, transparent and open, governed by the rules of the development and evolution function of SEPA Scheme Management. The key principles underpinning change management are the following: ? Innovation - the Schemes shall be open to innovative proposals to improve delivery of the Schemes with a view to ensuring that the Schemes are competitive, efficient and able to benefit from the latest developments in payments technology. Innovation shall provide the basis for the conception, design and implementation of new schemes for SEPA going forward. ? Transparency - the change management process shall be transparent and open so that changes implemented into the Schemes are carefully considered and scrutinised. Establishing open channels for Scheme Participants, users and suppliers to propose changes is a key aim of change management. ? Cost-benefit analysis - proposals for change shall be supported by careful analysis weighing up its costs and benefits to ensure that changes implemented into the Schemes are viable for all concerned. ? Development of SEPA - the Schemes are seen as an important platform for Scheme Participants to develop SEPA-enabled products and services that allow both end-users and Participants to take advantage of the development and investment in SEPA. 3.1.2 Change Management - Terminology The change management process shall involve ideas for changes being formulated as follows: Submission of Suggestion - A Suggestion denotes any idea for making a change to the Schemes. A Suggestion may be devised by any person and then submitted to the SPS WG in accordance with the procedures set out in these Internal Rules. An Initiator refers to a person that submits a Suggestion in accordance with these Internal Rules; Preparation of Change Request - A Change Request is formulated by the SPS WG. A Change Request is prepared if a Suggestion is accepted into the change management process, as set out in these Internal Rules. A Change Request involves detailed analysis into the change set out in the Suggestion and can include cost-benefit analysis and market research. Where the change proposes to modify the Rulebooks and any related documentation, a Change Request shall include a mark-up of the Rulebooks and any related documentation to show the amendments required to be made to the Rulebooks and related documentation as a result of implementing the change; and EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 29 - 19 June 2007 Preparation of Change Proposal - A Change Proposal is prepared after consultation on the Change Request, as set out in detail in these Internal Rules. A Change Proposal sets out a detailed framework for making a change to the Schemes, taking into consideration comments made during consultation. Where the change proposes to modify the Rulebooks and any related documentation, the Change Proposal shall include a mark-up of the Rulebooks and any related documentation to show the amendments required to be made to the Rulebooks and any related documentation as a result of the change proposed. The Change Proposal is accompanied by a Change Proposal Submission Document. The Change Proposal Submission Document certifies that each stage of the change management process has been completed. 3.1.3 Role of EPC Plenary and Working and Support Groups The development and evolution function of SEPA Scheme Management shall be performed mainly by the EPC Plenary and the SEPA Payment Schemes Working Group ("SPS WG"). The EPC Plenary shall implement changes, taking into account the overall strategy and policy goals of SEPA and the EPC, identifying key needs and finding appropriate solutions. The EPC Plenary shall be supported by the SPS WG. The SPS WG is the co-ordination and administration body for change management whose role involves liaising with Initiators, accepting Suggestions, formulating Change Requests and guiding these through the change management process. The SPS WG shall operate in accordance with its terms of reference. 3.1.4 Sending a Suggestion to the Secretariat A Suggestion is an idea for making any change to the Schemes. A Suggestion may be devised by any person and is to be submitted to the Secretariat in accordance with the rules set out in this section. Suggestions can then be sent to the SPS WG for consideration. The SPS WG, supported by the Secretariat, shall look to receive Suggestions from the following sources: ? Scheme Participants (or representatives) ? end-users (or representatives ) ? suppliers (or representatives) The Secretariat may also accept Suggestions made by bodies within the EPC, such as the SMC, that have insight into the operation of the Schemes and ideas about enhancing the delivery of SEPA services to Participants and users. Such Suggestions may also be sent directly to the SPS WG. Scheme Participants Scheme Participants must submit a Suggestion to their relevant banking community. The Suggestion should be submitted in a format that can be understood by the banking community. Upon receiving a Suggestion, the banking community shall carry out a preliminary evaluation of the Suggestion to determine whether the Suggestion is appropriate for the change management process. The banking community may conduct an initial consultation of its members on the Suggestion at this stage. In the course of carrying out its evaluation, the banking community may consult with the SPS WG at any time on any aspect of the evaluation process. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 30 - 19 June 2007 If the banking community determines that the Suggestion is likely to be appropriate for the change management process, it shall submit this Suggestion to the Secretariat for the attention of the SPS WG. The SPS WG shall then analyse the Suggestion further in accordance with these Internal Rules. The banking community shall notify the relevant Participant of the outcome of its evaluation as soon as it is reasonably possible to do so. A banking community that wishes to submit its own Suggestion may do so directly to the Secretariat at any time and the Secretariat shall send this Suggestion to the SPS WG. End-users and suppliers End-users and suppliers may send Suggestions to the EPC, or to a relevant stakeholder forum at a national or SEPA level. If a Suggestion is sent to the EPC, the EPC shall send the Suggestion to an appropriate stakeholder forum in a timely manner after receiving the Suggestion. Where a stakeholder forum receives a Suggestion either from such an Initiator or from the EPC, it shall discuss this Suggestion with a view to determining whether the Suggestion is appropriate for the change management process and whether there is substantial consensus in support of the Suggestion within the relevant stakeholder forum. In the course of this process, a stakeholder forum may send the Suggestion to a relevant banking community for discussion and for possible consultation nationally or at the European level. In the course of conducting its discussions, the stakeholder forum may consult with the SPS WG at any time. If the forum determines that the Suggestion is suitable for the change management process and if there is substantial consensus in support of the Suggestion, it shall submit the Suggestion to the Secretariat. The SPS WG shall then analyse the Suggestion further in accordance with these Internal Rules. The stakeholder forum shall notify the Initiator of the outcome of its discussions as soon as it is reasonably possible to do so. A stakeholder forum that wishes to submit its own Suggestion may do so at any time directly to the Secretariat, provided always that such a Suggestion is supported by substantial consensus within the forum. 3.1.5 Acknowledgement of Receipt of Suggestion The Secretariat shall acknowledge receipt of the Suggestion to the Initiator within 21 Calendar Days of receiving the Suggestion. An acknowledgement of receipt does not imply that a Suggestion has been accepted but only that the Suggestion has been received for consideration by the SPS WG. 3.1.6 Consideration of a Suggestion The SPS WG shall be responsible for deciding (a) whether the change should be accepted into the change management process or rejected and (b) whether the change proposed by the Suggestion is a Minor Change or a Major Change. In respect of (a), the SPS WG will only accept Suggestions into the change management process that propose ideas that fall within the scope of the Schemes. As part of this analysis, the SPS WG shall consider the change proposed by a Suggestion in accordance with the following broad criteria: ? the change presents a case for wide SEPA market-acceptance; ? the change is underpinned by cost-benefit analysis; ? the change is aligned with the strategic objectives of the EPC; EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 31 - 19 June 2007 ? the change is feasible to implement; and ? the change must not impede SEPA-wide interoperability of the Schemes. Suggestions that are not within the scope of the Schemes, or ones that fail to meet these criteria will generally not be accepted into the change management process. In respect of (b), the SPS WG shall decide whether a Suggestion proposes a change can be defined as a Minor Change or a Major Change. A Minor Change is a change of an uncontroversial and usually technical nature that facilitates the comprehension and use of the Rulebooks. Clarifications of existing rules shall not be deemed to affect the substance of the Rulebooks or the Schemes and will therefore be a Minor Change. Examples of such changes include corrections of spelling mistakes, grammatical corrections, or minor adjustments to technical standards in the Rulebooks to take account of upgrades. If a change is classified as a Minor Change, it can be approved through a simplified procedure, as set out below in these Internal Rules. A Major Change by contrast is a change that affects or proposes to alter the substance of the Rulebooks and the Schemes. Examples of such changes include the addition or development of new technical standards, proposals for new services to be offered in the Schemes, changes affecting policy, or the innovation of new SEPA schemes. Any change to chapters 5 and 6 of the Rulebooks shall always be a Major Change. Changes that are classified as Major Changes are approved through detailed consultation with relevant SEPA groups, as set out in these Internal Rules. 3.1.7 Acknowledgement of Acceptance or Rejection of Suggestion to Initiator After considering the Suggestion, the SPS WG shall decide whether or not to formulate a Change Request on the basis of the Suggestion made and whether the Suggestion should be accepted into the change management process. After arriving at its determination, the SPS WG shall notify the Initiator of its decision in a timely manner. The SPS WG may notify an Initiator either directly or indirectly using the EPC website. All Suggestions, irrespective of whether they have been accepted into the change management process shall be published on the EPC website, with a view to permitting such a list to be openly viewed by all groups. 3.2 Process for Submitting Major Scheme and Rulebook Changes 3.2.1 Preparation and Development of Change Request by SPS WG Once a Suggestion has been accepted and the change proposed by the Suggestion classified as a Major Change by the SPS WG, the SPS WG is responsible for carrying out detailed work to prepare and develop a Change Request on the basis of the Suggestion made. The SPS WG shall conduct research and carry out a cost-benefit analysis on the Suggestion, in accordance with Appendix 2 of these Internal Rules. This work will involve developing a business case for making a Change Request and eventually a Change Proposal. The analysis of the SPS WG should also show how the Suggestion meets the criteria set out in section 3.1.6 of these Internal Rules. Where the change proposes to modify the Rulebooks and any related documentation, a Change Request shall also show the likely amendments to be made to the Rulebooks and related documentation as a result of implementing the change proposed in the Suggestion. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 32 - 19 June 2007 The SPS WG shall make all reasonable efforts to develop the Change Request in a timely manner. The SPS WG shall publish a regular update on the EPC website to indicate the stage of development of the Change Request. 3.2.2 Dialogue with the Initiator In the course of developing the Change Request, the SPS WG shall consult with the Initiator, so that, as far as reasonably feasible, the Change Request is in line with the Suggestion submitted by the Initiator. 3.2.3 Consultation on Change Request Once the SPS WG has developed a Change Request, the SPS WG shall begin the process of consulting Participants, end users and service suppliers on the Change Request. Scheme Participants The SPS WG shall consult Scheme Participants, through all banking communities, on the Change Request. Banking communities will be asked to consult all of their members who are part of the Schemes with a view to ensuring that the views of the payment services constituency are considered in the consultation process. Banking communities shall ask their Scheme Participants to approve the Change Request, or alternatively, indicate their disapproval. A banking community shall notify the SPS WG of the outcome of such a consultation with its members. A Change Request shall be deemed to be approved by SEPA Participants if the Change Request is supported by those Scheme Participants who carry out at least 2/3rds of the volume of SEPA payment transactions in SEPA as a whole. For this purpose, a SEPA payment transaction is defined as a transaction under one or both Schemes, or under such other scheme as the EPC may devise from time to time. The EPC and the SPS WG shall not be obliged to verify the correctness of any notification made by the banking community or any evaluative methods used by the banking community in the consultation process. In addition to either approving or rejecting the Change Request, Scheme Participants, through their banking community may provide comments on the Change Request to the SPS WG. The SPS WG shall aim to conclude consultations within 90 Calendar Days of first calling for consultation. However, in cases where the Change Request requires further consideration or clarification, the SPS WG shall be free to extend any deadline for completing the consultation to ensure that Scheme Participants have an opportunity to provide their contributions. End-user and suppliers End-users and suppliers will be invited to contribute to the consultation through stakeholder forums organised at the European level and at the level of the national community. In addition to consultation with national banking communities, the SPS WG may also consult other SEPA banking communities. The composition of stakeholder forums for end-users and suppliers, and their role in the change management process, is set out in greater detail below. Stakeholder forums shall be requested to give their views on the Change Request to the SPS WG. 3.2.4 Feedback from National Consultation The SPS WG shall collect and analyse the comments received from both Participants and end-users and suppliers. The SPS WG shall prepare a feedback report on the consultation and make this report available on the EPC website to all groups. The SPS WG shall additionally give feedback on the consultation to the Initiator. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 33 - 19 June 2007 A Change Request that is not approved by Scheme Participants during the consultation process shall generally not be taken forward by the SPS WG. However, notwithstanding this general position, the SPS WG may, after due and proper consideration, raise issues arising from the national consultation for discussion at the EPC Plenary in accordance with the EPC Charter. 3.2.5 Preparation of Change Proposal and the Change Proposal Submission Document If the SPS WG decides to proceed with the change following consultation, the SPS WG shall prepare a Change Proposal, taking into account comments received during the national consultation. The Change Proposal shall set out details of the change proposed and the likely costs and benefits involved in implementing the change. The Change Proposal shall detail non-confidential comments received from the different banking communities of Scheme Participants and from end-users and suppliers in the stakeholder forums. Where the change proposes to modify the Rulebooks and any related documentation, the Change Proposal shall include a mark-up of the Rulebooks and related documentation to show the amendments to be made to the Rulebooks and related documentation as a result of implementing the change. A Change Proposal may bring together more than one change, as developed from one or more Suggestions. The SPS WG shall complete a Change Proposal Submission Document for submission to the EPC Plenary alongside the Change Proposal. The Change Proposal Submission Document shall certify that each stage of the change management process, from initiation to consultation, has been properly completed in respect of the change proposed. 3.2.6 Submission of Change Proposal to the EPC Plenary Following its consideration by the Co-ordination Committee in accordance with the EPC Charter, the Change Proposal and the Change Proposal Submission Document shall be submitted to the EPC Plenary for determination. The EPC Plenary shall determine whether or not to accept the Change Proposal by resolution. 3.2.7 Publication A Change Proposal that has been considered at the EPC Plenary shall be published on the EPC website together with the Change Proposal Submission Document and the decision of the EPC Plenary. The SPS WG shall use reasonable efforts to publish all Change Proposals, irrespective of whether the change has been accepted or rejected at the EPC Plenary, as soon as reasonably practicable after the relevant meeting of EPC Plenary. 3.2.8 Change Release Process and Cycle In order to ensure that the Schemes are not disrupted by the rapid implementation of numerous Change Proposals in a short space of time, it shall not be possible for the EPC Plenary to approve more than 1 Change Proposal in any year, except in exceptional circumstances. The EPC Plenary may only approve a further Change Proposal(s) in exceptional circumstances, for example, where the failure to implement a Change Proposal may result in disruption to the Schemes or to users of the Schemes. In implementing the changes set out in a Change Proposal, the EPC Plenary shall take into account current, mandated changes in the payments industry. Except in exceptional circumstances, the EPC may only implement a Change Proposal, as approved by the EPC Plenary, 6 months after the date on which the Change Proposal is published on the EPC website in accordance with section 3.2.7. In respect of complex changes, the EPC may specify a longer period of notice before implementing a Change Proposal. The EPC may implement a Change Proposal on shorter notice where the change proposed is necessary to ensure the efficient operation of one or both of the Schemes. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 34 - 19 June 2007 3.3 Process for Submitting Minor Rulebook Changes 3.3.1 Preparation of List of Minor Changes The SPS WG shall prepare a List of Minor Changes not more than twice each year. This List shall take into account Suggestions received by the SPS WG as well as any Minor Changes that the SPS WG considers are required for the Rulebooks. 3.3.2 Publication of List of Minor Changes The SPS WG shall publish the List of Minor Changes on the EPC website and ensure that the List may be viewed by all groups. Any person may submit comments on the List of Minor Changes through the EPC website to the SPS WG. The SPS WG shall permit comments to be sent to it for a period of 90 Calendar Days starting from the date of the publication of the List of Minor Changes on the EPC website. However, the SPS WG shall be free to extend this period, if appropriate. 3.3.3 Re-classification of a Minor Change In the event that the SPS WG receives extensive comments on the List of Minor Comments, where some items on the List are identified by contributors as potentially Major Changes, the SPS WG may remove the item from the List and consider re-classifying this item. The SPS WG may consult with relevant contributors and relevant groups on the status of the item with a view to determining whether a change is a Minor or a Major Change. Following such a consideration, the change may be re-classified as a Major Change and fall to be approved through the approval process for Major Changes, as set out in these Internal Rules. 3.3.4 Submission of List of Minor Changes to the EPC Plenary The List of Minor Changes shall be submitted to the EPC Plenary for determination. The EPC Plenary shall determine whether or not to accept the changes proposed in the List of Minor Changes by resolution. 3.3.5 Publication A List of Minor Changes that has been considered at the EPC Plenary shall be published on the EPC website together with the decision of the EPC Plenary on the items listed. The SPS WG shall use reasonable efforts to publish the List of Minor Changes, irrespective of whether the changes proposed have been approved or rejected at the EPC Plenary, as soon as it is reasonably practicable to do so after the relevant meeting of the EPC Plenary. 3.3.6 Change Release Process and Cycle In order to ensure that the Schemes are not disrupted by the rapid implementation of numerous changes in a short space of time, it shall not be possible for the EPC Plenary to approve more than 2 Lists of Minor Changes in any year, except in exceptional circumstances. The EPC Plenary may only approve a further List exceeding this limit in exceptional circumstances, for example, where the failure to implement a change may result in severe disruption to the Schemes or to users of the Schemes. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 35 - 19 June 2007 Except in exceptional circumstances, the EPC may only implement the changes set out in the List of Minor Changes 6 months after the date on which the List is published on the EPC website in accordance with section 3.3.5. The EPC may implement one or more of the changes set out in the List on shorter notice where the change(s) proposed is necessary to ensure the efficient operation of one or both of the Schemes. 3.4 Stakeholder Forums at European and National Levels The SPS WG shall consult stakeholder forums on a Change Request during the change management process. It is envisaged that end-users and suppliers shall have an opportunity to present their views through stakeholder forums. The change management process shall aim to capture a range of stakeholder opinions in SEPA by ensuring that stakeholder forums at the national level are represented alongside those at the European level. Stakeholder Forums - National Levels The SPS WG shall invite locally established stakeholder forums in SEPA jurisdictions to provide comments on a Change Request. Consultation at the national level shall take place through banking communities who shall be responsible for collecting and presenting views from established stakeholder forums in their jurisdiction. Banking communities shall consult stakeholder forums from a broad cross-section of interests, so that consumers, small and medium sized businesses, large users of payments services and suppliers are given an opportunity to contribute to the discussion. Banking communities shall be required to demonstrate to the SPS WG that they have made reasonable efforts to consult established stakeholder forums representing these interest groups in their jurisdictions. Banking communities should consult stakeholder groups that are properly established and with a track record in commenting on issues in the payments services industry. If a national stakeholder forum that wishes to be consulted by its banking community is not so consulted, it may provide its comments directly to the SPS WG. However, it is envisaged that banking communities shall consult broadly, ensuring that appropriate and relevant stakeholder forums in their jurisdictions are given an opportunity to consider and comment on the Change Request. After carrying out the consultation, banking communities shall prepare a report for the SPS WG in an appropriate format, setting out the views of stakeholders in their community. The SPS WG may publish stakeholder consultation reports received from communities in different SEPA jurisdictions on the EPC website during the consultation and feedback process. Stakeholder forums - European Level In addition to consulting Scheme Participants, the EPC shall facilitate the establishment of a stakeholder forum for various types of payments services users in SEPA as well as a separate forum for suppliers of payments technology and infrastructure. In respect of the stakeholder forum for users, it is envisaged that the stakeholder forum shall represent a wide cross-section of interest groups at the European level, including consumers, large users and small and medium sized enterprises. This stakeholder forum shall operate in accordance with a code of conduct and terms of reference concluded with the EPC. However, it shall be an independent body, with the power to structure its meetings, discussions and decision-making procedure in a manner that it considers appropriate. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 36 - 19 June 2007 The EPC shall request properly established, payments services stakeholder groups at the European level to nominate a representative(s) to this stakeholder forum. The representative(s) nominated by such groups shall form this stakeholder forum. It is open for organisations nominating a representative to withdraw a member from this forum at any stage and replace this member with another representative. However, to encourage continuity in the work of the forum, the forum should aim, as far as reasonably possible to have a stable and committed membership. This stakeholder forum shall operate in accordance with a code of conduct and terms of reference concluded with the EPC. However, it shall be an independent body, with the power to structure its meetings, discussions and decision-making procedure in a manner that it considers appropriate. Stakeholder groups at the European level that wish to have a role in nominating a representative but who have not been invited to submit a nomination, may request the Co-ordination Committee for permission to submit a nominee. The Co-ordination Committee, as advised by the NGC, shall have complete discretion in deciding whether a stakeholder group at the European level is sufficiently established to qualify as a nominating stakeholder group. The EPC shall similarly facilitate the establishment of a stakeholder forum for SEPA suppliers of payments technology and infrastructure. The EPC shall request European level stakeholder groups representing the interests of SEPA suppliers to nominate representatives to this forum. It is open for organisations nominating a representative to withdraw a member from this forum at any stage and replace this member with another representative. However, to encourage continuity in the work of the forum, the forum should aim, as far as reasonably possible to have a stable and committed membership. This stakeholder forum shall operate in accordance with a code of conduct and terms of reference concluded with the EPC. However, it shall be an independent body, with the power to structure its meetings, discussions and decision-making procedure in a manner that it considers appropriate. Stakeholder groups at the European level that wish to have a role in nominating a representative for the forum for suppliers but who have not been invited to submit a nomination, may request the Co- ordination Committee for permission to submit a nominee. The Co-ordination Committee, as advised by the NGC, shall have complete discretion in deciding whether a stakeholder group at the European level is sufficiently established to qualify as a nominating stakeholder group. A member of a stakeholder forum at the national level that is consulted by its banking community as part of national consultations may also be a member of these stakeholder forums at a European level. 3.4.1 Obligations of Stakeholder Forums Stakeholder forums at both the European and the national level shall be expected to conduct their affairs in accordance with the following obligations: ? stakeholder forums shall act in the best interests of the Schemes, with a view to always furthering the objectives of SEPA; ? stakeholder forums shall act with diligence and skill, ensuring that Change Requests are carefully considered and discussed; ? representatives of the stakeholder forums and the forum acting together shall ensure that they represent the interests of their constituents when acting in the stakeholder forums; ? stakeholder forums shall establish good management procedures, keeping records of all meetings held and keeping records of documentation considered at forum meetings; EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 37 - 19 June 2007 ? stakeholder forums shall observe principles of good governance, openness and transparency, ensuring that all interests groups are fairly represented in any governance arrangement established within a stakeholder forum; and ? stakeholder forums shall conduct their affairs with the highest level of integrity and professionalism. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 38 - 19 June 2007 4 APPENDIX 1 - COST-BENEFIT ANALYSIS 4.1.1 Cost Benefit Analysis ("CBA") - Introduction CBA is a powerful evaluative tool, used widely in industry and in the public sector to evaluate the costs and benefits involved in making an investment. CBAs provide a monetary evaluation of the impact of a potential investment together with a practical assessment of its benefit for the investor, consumer, industry and society as a whole. CBAs therefore help all parties concerned in determining whether the costs of an investment are worth the benefits that are likely to be garnered from it. While a CBA gives a good indication of the costs and benefits involved in monetary terms, it forms one component of a broader analysis into the decision of whether an investment is necessary or desired. While the importance of establishing the "business case" is self-evident, the CBA permits the business case to be given due weight while allowing parties to consider the change holistically, taking into account stakeholder opinions on factors that may more difficult to quantify. CBAs are conducted on the basis of key ground rules: ? a CBA should take into account all important costs and benefits; and ? a CBA should take full account of the risks and uncertainties involved in a project (technical failures, market disruptions etc.) 4.1.2 CBA - Analytical Parameters Not every Change Request may require a CBA to be performed, for example in cases where the benefit of the innovation is overwhelming and self-evident. However, where the Change Request requires the CBA to be performed, SPS WG shall be responsible for carrying out, or requesting a third party to carry out, a CBA to evaluate the CBA business case for the proposed change. The SPS WG may also take into consideration CBA received from third parties. A CBA shall be responsible for showing the following: ? the costs and benefits for industry, including Scheme Participants and suppliers of payments technology and infrastructure; and ? the costs and benefits for consumers and for SEPA as a whole, showing where the costs may be distributed across the different areas of the SEPA payments society. Costs and Benefits for Industry A CBA should clearly show all the monetary costs involved in a Change Request, so that capital as well as operational costs are reflected in this analysis. The benefits for industry shall be determined mainly by the value added to the service already provided to customers for the new services, or by the value-added to the service already provided to customers. Accordingly, the CBA shall include information on the likely customer uptake of the Change Request by including results of any surveys, research or projections. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 39 - 19 June 2007 Benefits for Customers and SEPA The CBA shall consider the wide benefit accruing to customers and to society as a whole as part of any analysis. The wider social benefits of a change may be seen in the benefits it holds for technological innovation, faster service delivery or financial stabilisation. 4.1.3 CBA - Results The Change Request shall take into account the results of the CBA for Participants, users and suppliers together with the level of net monetary return expected from the change. In addition, the Change Request shall set out the costs for upgrading technology and infrastructure to deal with the change together with an analysis of the general risks that may impact on the implementation of the new changes. If a CBA shows that the benefits do not justify the costs involved, it is expected that this will lead to the rejection of the Change Request by relevant groups and by the EPC Plenary. In some cases, where the CBA shows that the change would be positive for consumers but costly for industry, this analysis is likely to inform the debate at the level of users, suppliers and the EPC Plenary. Such a debate may focus on the funding arrangements necessary for re-distributing the costs involved, given that Scheme Participants and EPC Plenary members are not obliged to fund measures that are not in their overall financial interest. In such cases, the EPC Plenary shall exercise its discretion in determining the feasibility of changes, taking into account the views expressed in the consultation process. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 40 - 19 June 2007 5 APPENDIX 2 - CONFLICTS OF INTEREST 5.1 Rules for Managing Conflicts of Interest 5.1.1 General Principles A member of the SMC may be faced with a situation where the duties owed by him or her under these Internal Rules conflict in some way with another interest, duty or consideration of the member. A member of the SMC must be extremely alert to such conflicts of interest, or potential conflicts of interest arising in the course of his or her engagement with the SMC. In order to ensure that the Schemes are administered in accordance with the highest standards of fairness and transparency, a member of the SMC must monitor any conflicts of interest arising or potentially arising in the course of his or her office. On appointment, a member of the SMC must supply the NGC with a written list of issues that create or that may create a conflict of interest for a member in the course of his or her office. Such a list must constantly be updated in the course of a member's appointment to the SMC. Members of the SMC shall monitor conflicts of interest arising in respect of any of the other members of the SMC on a continuing basis. A member of the SMC shall be expected to declare any actual or potential conflicts of interests at the start of any meeting involving the SMC. A note of such a declaration must be retained in accordance with section 6.1.2 below. Any member of either the SMC may inform an appropriate person like the Chair of that body that he or she feels that a member of the body or the body as a whole is subject to a conflict of interest, or that a conflict of interest might reasonably be expected to arise. In such cases, the Chair shall act in an appropriate manner to ensure that the conflict of interest is managed effectively and transparently. Where the Chair is subject to a conflict of interest, he or she may nominate another person within the SMC to manage the conflict on his or her behalf. Where all the members of a body are subject to a conflict of interest, the body must request the NGC to take appropriate action. Examples of conflicts of interest include situations where a member of the SMC finds him or herself in a position to adjudicate against a competitor of his or her employer, or where such a member may stand to gain in some way from a particular outcome of proceedings before either the SMC. Where a conflict exists or where one might reasonably be expected to arise, the member must declare the conflict and the Chair, acting together with other members of either of the SMC shall decide whether a conflict does indeed exist and how such a conflict should be managed. Where a conflict of interest is deemed to exist or where one might reasonably be expected to arise, the Chair, acting together with the other members of the SMC, must determine whether the affected member should refrain from voting on the relevant issue before him or her. 5.1.2 Record Keeping Members of the SMC shall keep a record of each case where a conflict of interest has arisen or where one has been likely to arise, together with the action taken by the relevant member or body to manage the conflict. Members of the SMC should also record cases where a conflict of interest was suspected but where, after analysis, such a conflict was deemed not to have arisen. Such records shall be open to inspection by the EPC and to such other persons as the SMC may consider appropriate. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 41 - 19 June 2007 6 TERMS DEFINED IN THE INTERNAL RULES Definitions taken from other documents are acknowledged. Terms defined elsewhere in this document are not repeated here, but only referenced. Term Definition Additional Optional Services Complementary features and services based on the Schemes, as described in more detail in the Rulebooks. Adherence Agreement The agreement to be completed as part of the process by which an entity applies to become a Participant. The agreement is found at Annex 1 of the Rulebooks. Admission Date A date specified for admission to one or both of the Schemes for a group of successful applicants. Affected Participant A Participant that is subject to proceedings before the SMC in accordance with section 2.4 of these Internal Rules. SMC The SMC of Scheme Management, as further detailed in these Internal Rules. Bank Identifier Code (BIC) An 8 or 11 character ISO code assigned by SWIFT and used to identify a financial institution in financial transactions (ISO 9362). BIC See ?Bank Identifier Code?. Business Day A day on which banks in the relevant jurisdiction are generally open for business with customers. Calendar Day A Calendar Day means any day of the year CBA Cost benefit analysis Chair Chair refers to the Chair of the SMC Initiator Any person making a Suggestion Change Proposal A detailed proposal setting out a proposal for change after consultation with relevant groups such as users and suppliers and detailed consideration of the Change Request. A Change Proposal can set out comments received from such groups together with a detailed analysis of the change and the costs and benefits of implementing a change. Where the change proposed in the Change Proposal modifies the Rulebooks or related documentation, a Change Proposal shall include a mark-up of the Rulebooks and related documentation to show the amendments required to be made to the Rulebooks and related documentation as a result of the change proposed. Change Proposal Submission Document A pro-forma document prepared by the SPS WG to certify that each stage of the change management process has been properly completed. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 42 - 19 June 2007 EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 43 - 19 June 2007 Term Definition Change Request A Change Request is formulated by the SPS WG on the basis of Suggestions accepted into the change management process. A Change Request takes into account CBA, and other details in relation to the change proposed. Where the change proposed in the Change Request modifies the Rulebooks or related documentation, a Change Request shall include a mark-up of the Rulebooks and related documentation to show the amendments required to be made to the Rulebooks and related documentation as a result of the change proposed. CSMs Clearing and Settlement Mechanisms Commencement Date The date on which the EPC resolves to commence operation of the Scheme in accordance with section 5.1 of the Rulebooks. Customer Banking Business Day A Customer Banking Business Day is a day on which banks in the relevant jurisdiction are generally open for business with customers. EBA European Banking Association ECSA European Credit Sector Association EPC The European Payments Council EPC Charter The Charter of the European Payments Council dated 18 June 2004, as amended from time to time. EU The European Union Independent Member An Independent Member is a member who can display the highest standard of professional integrity and objectivity in relation to Scheme Management. An Independent Member should be a professional of good repute, with appropriate skills, who has a reasonable knowledge of the payments services sector but who is not employed or is otherwise affiliated with a Scheme Participant or its banking communities, service providers or a payment services user group or user association. Internal Rules These are the internal rules for Scheme Management set out in this document, as amended from time to time. List of Minor Changes As defined in section 3.3.1 of these Internal Rules Major Change As defined in section 3.1.6 of these Internal Rules Minor Change As defined in section 3.1.6 of these Internal Rules NASO National Adherence Support Organisation, as explained in section 2.2.4 of these Internal Rules. NGC Nominating and Governance Committee Participant A Participant is an entity that has adhered to one or both of the Schemes in any capacity. EPC027-07 Internal Scheme Management Rules Version 1.6 Approved Page 44 - 19 June 2007 Term Definition Payment Services Directive The EU Directive on payment services in the internal market. Scheme Each of the SEPA Direct Debit Scheme and the SEPA Credit Transfer Scheme SMC Scheme Management Committee Secretariat The EPC Secretariat SEPA The definition of SEPA is part of the EPC Roadmap approved by the EPC Plenary in December 2004. SEPA will be the area where citizens, companies and other economic actors will be able to make and receive payments in euro, within Europe (currently defined as consisting of the EU member states plus Iceland, Norway, Liechtenstein and Switzerland), whether between or within national boundaries under the same basic conditions, rights and obligations, regardless of their location. SEPA will also extend to cover the following territories that are considered to be a part of the EU in accordance with Article 299 of the Treaty of Rome: Martinique, Guadeloupe, French Guiana, Reunion, Gibraltar, Azores, Madeira, Canary Islands, Ceuta and Melilla and Aland Islands. SEPA Credit Transfer Scheme The SEPA Credit Transfer Scheme is the payments scheme for making credit transfers across SEPA, as set out in the SEPA Credit Transfer Scheme Rulebook. SEPA Credit Transfer Scheme Rulebook The Rulebook setting out rules and business standards for the SEPA Credit Transfer Scheme, as amended from time to time. SEPA Direct Debit Scheme Rulebook The Rulebook setting out rules and business standards for the SEPA Direct Debit Scheme, as amended from time to time. SEPA Scheme A SEPA payment scheme is a common set of business rules, practices and standards for the provision and operation of a SEPA payment instrument agreed at an interbank level in a competitive environment. SEPA Scheme Management SEPA Scheme Management denotes the governance, development and compliance mechanisms in relation to a SEPA Scheme. SPS WG SEPA Payments Services Working Group Suggestion A Suggestion is an idea for change to the Schemes, proposed to the SPS WG. Unresolved Issue Any dispute in relation to one or both of the Rulebooks.

PARTAGER SUR

Envoyer le lien par email
2777
READS
4
DOWN
7
FOLLOW
8
EMBED
DOCUMENT # TAGS
#SEPA  #développement 

licence non indiquée


DOCUMENT # INDEX
Business 
img

Partagé par  stanislas56

 Suivre

Auteur:ECP
Source:http://www.europeanpaymentscouncil.org