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Industry roundup: 4 August

Lloyds Bank and Visa partner on STP for commercial charge cards

Lloyds Bank has become the first bank in Europe to partner with Visa to offer straight-through processing (STP) technology to customers using its commercial charge cards. STP enables a more efficient way to pay invoices while providing the traditional benefits of commercial card payments to both the buyer and the supplier. 

With STP, buyers can request to time their payments to maximise the number of days before their statement, giving them more flexibility with their cashflow than would be the case with a bank transfer. Suppliers benefit by receiving funds directly into their accounts without the need to manually input card details or use card terminals. STP also makes it easier for suppliers to identify the source of inbound payments thanks to the rich remittance data. 

"Partnering with Visa to add STP technology to our commercial cards is a direct result of us acting on a payments pain point for our clients," said James Sykes, head of Commercial Cards at Lloyds Bank Commercial Banking. "STP turns the traditional supplier-initiated payments model on its head. It makes conversations around card payments easier, provides more control and insight over the transaction and can help buyers and sellers improve their working capital."

"Commercial cards are a secure, reliable and convenient way for businesses to pay," commented Helen Jones, executive director, Visa Business Solutions at Visa. "STP will help make the experience of paying invoices easier and more streamlined for both suppliers and buyers. We’re delighted to partner with Lloyds Bank to help their customers better manage their cashflow and their supplier relationships at such a critical moment for UK businesses."


FxPro and Currencycloud partner on multi-currency digital wallet

FxPro has partnered with Currencycloud on a new business called BnkPro, which will offer to the mass affluent segment of the market the ability to access private banking-like services through an app. The app will enable customers to create a multi-currency digital wallet and request a Mastercard debit card. BnkPro customers can make payments using domestic and international facilities, transfer money between their multi-currency accounts, and trade and invest in securities.

The integration of Currencycloud into FxPro’s offering expands its geographic reach as well as providing access to a number of new local, and international payment rails and schemes. This should make it easier and quicker for customers to send, receive and hold funds in multiple currencies. The service is now live.

"FxPro Group and our brands have always strived for constant technological innovation, and this integration is another step towards us offering the complete financial services package, facilitating global transfers and multi-currency accounts alongside robust digital investment services," said Charalambos Psimolophitis, CEO of FxPro Group. 


Trade associations launch framework for Common Domain Model

The International Swaps and Derivatives Association (ISDA), the International Capital Market Association (ICMA) and the International Securities Lending Association (ISLA) have signed a memorandum of understanding (MoU) to strengthen collaboration on the future development of the Common Domain Model (CDM), which establishes a single, common digital representation of trade events and actions across the lifecycle of financial products. The associations say that this cross-industry initiative marks an important step in their commitment to define and promote the development of a digital future for financial markets, as set out in a joint letter a year ago.

The MoU establishes a framework for closer collaboration between the three associations, providing a path for joint governance and setting out arrangements in relation to the open-source components of the CDM and associated intellectual property for market-specific components.  The MoU is intended to unlock further synergies in the development of the CDM across financial markets, creating efficiencies for market participants and setting digital standards that will enable the use of innovative technologies in future.

ICMA, together with its CDM Steering Committee, has recently concluded the initial phase of its CDM project for repo and bonds, which provides a single, unambiguous representation of the execution, clearing and settlement of a fixed-term repo transaction, as well as a bond transaction. 

ISDA is accelerating the pace of adoption of the CDM via a digital regulatory reporting initiative, specifically for new rules required by the Commodity Futures Trading Commission (CFTC) and the European Securities and Markets Authority. Industry participants are coding reporting rules into machine-readable and executable models for these regimes in the CDM for implementation as early as 2022 in the case of the CFTC requirements. In the area of collateral processes and legal documentation, CDM development will be implemented into ISDA Create, facilitating output of executed representations of the various credit support annexes and other documentation in CDM format for consumption on collateral infrastructure platforms. In terms of risk management, ISDA has pointed to the potential for the CDM to automate and streamline the preparation and collection of risk, capital and margin data in a recent whitepaper and imminent pilot project.

At the beginning of July, ISLA’s CDM Working Group, comprising some 35 member firms, made major contributions and enhancements to the extensive foundations laid by ISDA, including enhancements to the allocation function, the ability to associate more than one legal agreement with a transaction, updates to the transfer function critical for physical settlement, and the very first concept of a bill within the CDM.


Fed extends comment period on proposed rule to govern funds transfers over FedNow Service

The Federal Reserve Board has announced that it will extend the comment period for its proposal to govern funds transfers over the Federal Reserve Banks' FedNow Service until 9 September 2021.

The FedNow Service is a new 24x7x365 service that will support instant payments in the United States and is expected to be available in 2023.

The Board extended the comment period to allow interested persons more time to analyse the proposal and prepare their comments. Originally, comments were due by 10 August 2021.

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