Glossary

A

A2A (Application-to-Application)

Interaction between IT applications (typical interaction method between computers that generally cooperate among themselves via a data communication network).

AAU (Authorized Account User)

A participant in TIPS (TIPS Participant or Reachable Party) authorized to settle payments on a TIPS DCA or CMB. The authorization is assigned to the participant as the holder of an identification code, the BIC. The configuration of an AAU is performed through the CRDM.

Assigner

Participant in TIPS requesting the refund of a previously settled payment order. The refund is requested through a Recall Request.

Automated clearing house (ACH)

An infrastructure that enables participants to exchange flows containing payment orders automatically, according to shared business rules and standards. An ACH can also clear the debit and credit positions of participants arising from the exchange of payment flows and calculate the balances (bilateral or multilateral) to be settled.

ACH

See: Automated clearing house.

Ancillary system

A system managed by an entity established in the EEA (see EEA) that is subject to supervision and/or oversight by a competent authority and complies with the oversight requirements for the location of infrastructures offering services in euro. In an ancillary system, payments and financial instruments are exchanged and/or cleared and the resulting monetary obligations are settled in TARGET2 (see TARGET2).

Assignee

The beneficiary of a previously settled instant payment for which the Assigner is demanding to be reimbursed. The Assignee can respond to the refund request by sending to TIPS a positive (positive recall answer) or negative (negative recall answer) response message.

Acceptance Timestamp

Date and time (expressed in UTC) indicating the starting point in time of the execution process of an instant payment. This information is contained in the instant payment order sent to the TIPS platform.

B

BILL (Billing)

Common component developed by the Eurosystem in order to maximize the synergies between TARGET2 and TARGET2-Securities and facilitate the consolidation of the technical, application and infrastructural components of TARGET services. The BILL component provides the centralized creation and management of invoices for all TARGET services.

BIC (Bank Identifier Code)

International ISO standard that specifies the bank identifier code (BIC). The Society for Worldwide Interbank Financial Telecommunication (SWIFT) in its role of ISO registration authority issues BICs to financial and non-financial institution. The BIC can be an 8 (BIC8) or 11 character code (BIC11).

C

Centro applicativo Banca d'Italia (CABI)

The Centro Applicativo della Banca d'Italia is the infrastructure that makes it possible for Banca d'Italia to clear both its own payments and those pertaining to general government (made in SEPA Credit Transfer - SCT - format) independently, without needing to use external clearing systems. Payments are sent through CABI to national and foreign banks, provided that they participate in the retail payment systems that are interoperable with BI-Comp or in the STEP2 system (see STEP2).

Central bank money

in exercising monetary policy, a central bank issues its own liabilities which take the form of both cash, namely banknotes and metal coins, and overnight deposits held at the central bank by financial institutions, especially banks. A transaction is settled 'in central bank money' when the accounts of the counterparties involved are held with their respective central banks.

Collateral

assets eligible to guarantee Eurosystem financing operations (monetary policy operations and intraday credit in TARGET2).

Commercial bank money

as well as being created by central banks, money can also be created by commercial banks through the issuance of their own liabilities which are used as money by their customers. This occurs every time a commercial bank issues a loan, and takes the form of bank deposits. A transaction is settled in 'commercial bank money' when the accounts of the counterparties involved are held with commercial banks.

CMB (Credit Memorandum Balance)

It represents a limit defined by a TIPS Participant owner of TIPS DCAs for a Reachable Party, in the usage of the liquidity of a given TIPS Account.

Central securities depository (CSD)

An entity that holds securities accounts in the name of and on behalf of its customers (mainly financial institutions); it offers settlement and custody services for financial instruments and it registers new issuances of securities in its own books. The central securities depository for the Italian market is Monte Titoli SpA (see Monte Titoli SpA ), established in 1978.

Clearing system

A system characterized by formal and standardized mechanisms and by common rules which are designed to allow participants to exchange payment data.

CRDM (Common Reference Data Management)

Common component developed by the Eurosystem in order to maximize the synergies between TARGET2 and TARGET2-Securities and facilitate the consolidation of the technical, application and infrastructural components of TARGET services. The CRDM component provides features to setup, maintain and query all reference data used by the different Eurosystem Market Infrastructure (EMI) services.

D

Drawee

The bank, or other authorized entity, which holds the account on which the cheque is drawn.

E

ESMIG (Eurosystem Single Market Infrastructure Gateway)

Common component developed by the Eurosystem in order to maximize the synergies between TARGET2 and TARGET2-Securities and facilitate the consolidation of the technical, application and infrastructural components of TARGET services. The ESMIG component provides a set of features shared among all the market infrastructure services beyond representing a single point of contact with the external networks.

Electronic payments

Payments made with instruments other than cash which enable payments to be made without needing to exchange documents in paper form, e.g. credit cards, credit transfers and direct debits.

ECMS (Eurosystem Collateral Management System)

A unified system for managing assets used as collateral in Eurosystem credit operations (refinancing operations and intraday credit).

EPC (European Payments Council)

The decision-making and coordination body of the European banking industry in relation to the development of the SEPA.

I

ISO 20022 (standard)

International standard based on XML messages (Extensible Markup Language) for electronic data interchange between financial institutions.

IBAN (International Bank Account Number)

Code used to identify uniquely, at international level, a client's account with a financial intermediary.

L

LeA (Legal Archiving)

Common component developed by the Eurosystem in order to maximize the synergies between TARGET2 and TARGET2-Securities and facilitate the consolidation of the technical, application and infrastructural components of TARGET services. The LeA component provides features to gather all information that is subject to legal archiving requirements from all the Eurosystem Market Infrastructure services.

Liquidity Transfer

Cash transfer between accounts held in the RTGS system and accounts in TIPS.

M

MIB (Market Infrastructure Board)

The Market Infrastructure Committee is the governance body that supports the Governing Council of the European Central Bank by ensuring the development, management and evolution of the Eurosystem's market infrastructures, in accordance with: (i) the objectives defined by the Treaty on the Functioning of the European Union and the Statute of the European System of Central Banks and of the European Central Bank; (ii) operational needs and technological advances; (iii) the legal framework applicable to Eurosystem services and projects, as well as legal and oversight requirements, in full compliance with the mandate of the ESCB committees. The MIB reports directly to the decision-making bodies of the ECB.

N

NSP (Network Service Provider)

A company that provides network services to connect the TIPS Actor (e.g. PSP, central banks) with the TIPS platform through the U2A (User-to-Application) and A2A (Application-to-Application) channels.

Negotiator

The bank, or another entity authorized to negotiate, which receives the cheque to be cashed.

P

Party Technical Address

See: TIPS DN

PSP (Payment Service Provider)

Provider of shops online services that allow entities, shops and merchants to accept electronic payments by a variety of payment methods, including credit card, bank based payments such as direct debit, bank transfer.

R

Recall Request

A message to request the return of funds previously settled. The recall process is foreseen in the SEPA Instant Credit Transfer Rulebook.

Reachable Party

A participant reachable in TIPS without holding TIPS accounts. It has to rely on a TIPS Participant’s account to settle payments in TIPS. A Reachable Party is identified by a BIC11.

S

STEP2

A retail payment system owned by EBA Clearing (see EBA Clearing). It was established in 2003 to process intra-EU cross-border credit transfers; in 2006 the provision of services was extended to domestic credit transfers exchanged between some Italian banks participating in the system. The system has been dealing with SEPA credit transfers (see SEPA) since 28 January 2008, with SEPA direct debits since 2 November 2009 and with SEPA instant credit transfers since 21 November 2017. The technical infrastructure for processing submitted payments is provided by SIA (see SIA).

SEPA payment instruments

The SEPA project currently includes four types of instruments (credit transfers, instant credit transfers, direct debits and payment cards); these are standardized basic services to which intermediaries can add other functions. In the context of the European Payments Council (EPC) (see EPC) the SEPA Credit Transfer Scheme Rulebook, SEPA Direct Debit Scheme Rulebook and SEPA Instant Credit Transfer Rulebook were produced, which describe the interbank rules, practices and standards for credit transfers, direct debits and instant credit transfers respectively. A set of principles, rules and guidelines was drawn up for payment cards and detailed in a specific document known as the SEPA Cards Framework. Newly issued payment cards have been compliant with SEPA standards since 1 January 2008 which, among other things, envisage the use of microchip technology; the SEPA credit transfer was introduced on 28 January 2008, the SEPA direct debit on 2 November 2009 and the SEPA instant credit transfer on 21 November 2017. As provided for in Regulation (EU) No 260/2012, in 2014 the domestic procedures for credit transfers and direct debits were replaced by the corresponding pan-European schemes.

SEPA Direct Debit - SDD

See: SEPA payment instruments.

SEPA Instant Credit Transfer - SCT Inst

See: SEPA payment instruments.

SEPA Credit Transfer - SCT

See: SEPA payment instruments.

T

TIPS DCA (Dedicated Cash Account)

Account held by a bank as a TIPS Participant, opened and used for the settlement of instant payments in TIPS. TIPS DCAs are governed by the TARGET2 Guideline.

TIPS Participant

A participant in TIPS, owner of one or many TIPS DCAs. A TIPS Participant is identified by a BIC11.

Transit Account

An account held by each central bank responsible for the RTGS System related to a given settlement currency in TIPS. The transit account reflects any movement of liquidity from/to the RTGS. The ECB is responsible for the Transit Account denominated in euro.

TEGM (Tasso Effettivo Globale Medio) Average Overall Effective Rate under Law 108/96 (anti-usury law)

The average overall effective rate is the benchmark for setting the threshold rate above which interest on a loan is deemed usurious, regardless of who applies it. It provides the average value of the interest rates applied by banks and supervised financial institutions (including commissions, remuneration of any kind and expenses, excluding taxes).

As delegated by the Ministry of Economy and Finance (MEF), the Bank of Italy collects data on TEGMs on a quarterly basis for homogeneous categories of loans (e.g. overdraft facilities, personal loans, mortgages, etc.). The values collected, adjusted for any changes in the official rates after the reference quarter, and the threshold rates are published in the Official Journal of the Italian Republic (Gazzetta Ufficiale) by the MEF, which also makes them available on its website (only in Italian). Banks and financial institutions are required to display the decree identifying lending operations and that governing TEGMs and threshold rates in premises open to the public.

TIPS GUI (Graphical User Interface)

Graphic interface used by TIPS users in order to interact with the platform in U2A mode.

Triparty service

a service through which a market player entrusts a third party (see triparty agent) with the selection, mobilization and, more generally speaking, the overall management of collateral, both for market and credit operations within the Eurosystem.

TIPS DN (Distinguished Name)

Network address used by participants in TIPS to send and receive instant payment orders. The TIPS DN is also used as a technical address (Party Technical Address) for receiving notifications and reports.

U

UTC (Universal Time Coordinated)

The primary time standard known as Coordinated Universal Time.

U2A (User-to-Application)

Method of interaction between physical users and an IT application.