On 26 January 2015 the European Payments Council ( ) published the Direct Debit ( ) Core Rulebook version 9.0 and the Business to Business (B2B) Rulebook version 7.0. The Rulebook version 9.0, the Rulebook version 7.0 and associated implementation guidelines (see ‘related links’ below) will take effect on 20 November 2016.
The has traditionally published updated versions of the rulebooks and associated implementation guidelines once annually in November to take effect in November of the next year. Exceptionally, the resolved to publish the Rulebook versions to take effect in November 2016 in January 2015.
This decision was made to give payment service providers ( ) participating in the Single Euro Payments Area ( ) payment schemes an extended lead-time to implement principal changes incorporated in the Rulebook version 9.0 and Rulebook version 7.0 prior to them taking effect. The Rulebook version 9.0 introduces a shorter standard time cycle. Both the Rulebook version 9.0 and Rulebook version 7.0 have been amended to simplify the use of sequence types.
The public consultation on possible modifications to be incorporated into next generations rulebooks carried out by the in 2014 identified broad support to amend the Rulebook as regards the standard time cycle and both the and Rulebooks as regards the use of sequence types. A majority of scheme participants advocated implementing related changes by November 2016 to allow for sufficient time to update processes and operations.
This blog describes again the main changes introduced into the Rulebook version 9.0 and Rulebook version 7.0 (previously described in a dedicated article published in the October 2014 edition of the Newsletter). It also recaps the rulebook release management process applicable until November 2017.
Recap: the scheme change management process
The launched the Credit Transfer ( ) Scheme in January 2008 and the and Schemes in November 2009. The payment schemes, as set out in the and Rulebooks, evolve based on a transparent change management process adhered to by the . This evolution reflects changes in market needs and updates of technical standards. The principles governing the evolution of the Schemes are set out in the Scheme Management Internal Rules, which are an integral part of the rulebooks.
The scheme change management process provides all stakeholders with the opportunity to participate; i.e. to introduce suggestions for changes to the schemes. All suggestions for changes to the rulebooks received are evaluated by the and consolidated into a single change request document per rulebook. All proposed changes to the schemes are then released with the change request documents for a three-month public consultation. Proposed changes to the schemes that find broad acceptance in the entire stakeholder community and are technically and legally feasible are taken forward. Proposed changes that lack such broad support are not – regardless of whether such a change is proposed by a or by a user representative. This ensures that the and Schemes evolve in line with the requirements of the majority of market participants.
The Rulebook version 9.0 includes a shorter standard time cycle for the presentation of one-off and recurrent direct debit collections at the debtor’s bank
To give some background: the standard time cycle of the Rulebook currently is: the debtor’s bank must receive the request for a first direct debit collection or for a one-off direct debit collection at least five business days prior to the due date (‘D-5’). For subsequent direct debit collections, the debtor’s bank must receive such a request at least two business days prior to the due date (‘D-2’). The due date (‘D’) is assigned by the creditor (biller) and should be agreed with the debtor (payer) in the contract underlying a direct debit collection (a newspaper subscription, for example). (The Schemes allow payers and billers to anticipate the precise date (due date), when their account will be debited or credited, respectively. The due date may be later than the date agreed between the payer and the biller if the due date is not a banking business day or in case of other exceptional circumstances.)
The Rulebook currently includes – as an option – the possibility of using a shorter time cycle for the presentation of first, recurrent and one-off direct debit payments by allowing the creditor’s bank to send the payments to the debtor’s bank at least one interbank business day prior to the due date (‘D-1’). This option, (which is often referred to as ‘ COR1’), caters for the needs of certain businesses which require a shorter time cycle for direct debit payments than the standard cycle. It allows for time critical business transactions, e.g. security related transactions and insurance collections.
As of the effective date of November 2016 of the Rulebook version 9.0, all collections presented for the first time, on a recurrent basis or as a one-off collection can be presented up to one interbank business day prior to the due date. This change does not impact the creditor as the creditor can continue to use the currently applicable collection timelines after November 2016.
It should be noted that all participating in the Scheme must continue to support the current standard time cycle of the Scheme until the shorter standard time cycle takes effect in November 2016. Creditors should contact their bank to learn more about the possibilities of using these shorter timelines prior to November 2016, as certain banks or communities of banks may already agree to operate under these timelines, while other banks may not yet support this currently optional feature. To learn which , or communities thereof, have advised the that they are making use of the currently optional shorter time cycle, refer to the Website page, entitled ‘Use of Options’ (see ‘related links’ below).
The Rulebook version 9.0 and Rulebook version 7.0 have been amended to simplify the use of sequence types by making the sequence type ‘first’ optional
To give some background: the Rulebooks currently require that the payment message used to request a direct debit collection specifies whether the transaction is a first, one-off, recurrent or last collection. (These specifications are also referred to as ‘sequence types’.)
The current requirement to use the sequence type ‘FRST’ in a first of a recurrent series of collections is no longer mandatory as of the effective date of November 2016 of the Rulebook version 9.0 and Rulebook version 7.0 (i.e. a first collection can be used in the same way as a subsequent collection with the sequence type ‘RCUR’). This change does not impact the creditor side as the creditor can continue to provide the sequence type ‘FRST’ after November 2016 (no reject rule for data element ‘FRST’).
Updated version of clarification paper on and addresses changes introduced into the Rulebooks to take effect in November 2016
In January 2013, the first published a clarification paper, which addresses operational aspects related to the and Schemes. It published version 2.0 of the paper in June 2013.
The paper seeks to ensure consistent implementation of the and Rulebooks by participating in the schemes. It covers the following aspects: character set, pre-notification, sequence types for collections, R-transactions and currency conversion. (Possible exceptions to the normal execution of a direct debit collection include refunds, returns, rejects, refusals and reversals, commonly referenced as ‘R-transactions’ and described in detail in the Rulebooks.)
The paper, which will be updated from time to time, as required, provides guidance and, where feasible, recommendations to scheme participants, i.e. that have formally adhered to the schemes, on how to handle situations that are not described in the rulebooks.
In November 2014, the published version 2.1 of the clarification paper (see ‘related links’ below) including a few updates compared to the second version published in June 2013:
- At the start of section 3, an announcement was added regarding the collection time cycle and the use of the sequence type ‘first’ under the and Rulebooks applicable as of November 2016.
- Section 3.8 includes an important change on the use of the sequence type ‘first’ relevant to both the and Rulebooks applicable as of November 2016. A clarification is given on the sequence type to be used for the representation of a returned one-off and last collection. Finally, a note is included regarding a refunded one-off or last collection.
Rulebook release management process applicable until November 2017
With the publication of the next generations of rulebooks, the has ensured planning security for all stakeholders in for the period 2015 through 2017. The rulebook release management process applicable until November 2017 is as follows:
- The Rulebook version 7.1, Rulebook version 7.1 and Rulebook version 5.1 currently in effect remain in effect until November 2015.
- The Rulebook version 8.0, Rulebook version 8.0 and Rulebook version 6.0, published in November 2014, will take effect on 22 November 2015. The Rulebook version 8.0 will remain in effect until November 2017. The Rulebook version 8.0 and Rulebook version 6.0 will remain in effect until November 2016.
- The Rulebook version 9.0 and Rulebook version 7.0, published in January 2015, will take effect on 20 November 2016 and remain in effect until November 2017.
The rulebook versions listed above will be further amended during 2015 to include updated Scheme Management Internal Rules (SMIRs). Changes to the SMIRs have no operational impact whatsoever.
The next scheme change management cycle will roll out in 2016 / 2017
As previously reported, there will be no further scheme change cycle in 2015. The will reach out to all interested parties in the course of 2015 to engage in the next scheme change management cycle. The period for stakeholders to submit suggestions for changes to the published rulebooks is open and will end on 31 December 2015. These suggestions will then be considered with regard to the rulebook versions to be published in 2016 to take effect in 2017.
- EPC Website: 2016 SDD Rulebooks (SDD Core Rulebook version 9.0, SDD B2B Rulebook version 7.0 and associated implementation guidelines)
- EPC Website: 2015 SDD Rulebooks (SDD Core Rulebook version 8.0, SDD B2B Rulebook version 6.0 and associated implementation guidelines)
- EPC Website: 2015 SCT Rulebook (SCT Rulebook version 8.0 and associated implementation guidelines)
- EPC Newsletter (October 2014): SCT and SDD Rulebooks: Modifications to the Rulebooks to Take Effect in November 2015 and November 2016, Respectively
- EPC Website: Use of SDD Core Options
- EPC Clarification Paper: SEPA Credit Transfer and SEPA Direct Debit
- EPC Website: EPC Consultations
- EPC Website: SCT / SDD Rulebook Release Management and Scheme Development
- Regulation (EU) No 260/2012 establishing technical and business requirements for credit transfers and direct debits in euro (the SEPA Regulation) adopted by the EU legislator in February 2012
- EPC Website: What is a Payment Scheme?
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