coming into effect september 17, 2018 · coming into effect september 17, 2018 . payments canada is...

COMING INTO EFFECT SEPTEMBER 17, 2018 Payments Canada is in the process of implementing a multi-year roadmap to modernize Canada’s national payments clearing and settlement infrastructure, to better support the long term effectiveness of the Canadian payments ecosystem. An important component of the Canada’s retail payments system is the Automated funds transfer capability– also known as batch payments – which moves roughly 1.5 billion payments in Canada every year. Around the world, batch payments remain a long-standing staple of most payments systems because they are a cost effective and efficient way for financial institutions and their business clients to manage important and predictable transactions such as payroll, bill payments, business-to-business and business-to-consumer payments. With automated funds transfer, organizations can pay employees electronically at the same time rather than issuing cheques one by one. Automated funds transfer also allows for the use of Pre-authorized Debits (PADs) which are a convenient way to arrange for scheduled or ad-hoc payments, such as payments to a biller. One of the objectives of modernization is to improve the existing AFT batch system through the addition of a 3rd daily Exchange Deadline, faster funds availability for beneficiaries and requiring the use of ISO 20022 payment messages. These enhancements will be implemented using a phased approach with initial focus on Phase 1 which enables the 3rd daily exchange and faster funds availability. To accommodate the implementation of Phase 1, amendments to several ACSS Rules (F1, F4, F7, K8 and G12) have been proposed and approved by the Payments Canada Board of Directors. The rules, which will come into effect on September 17, 2018 will enable the following improvements to AFT:

● The addition of a 3rd inter-FI AFT exchange deadline at 9:00pm ET; ● The ability to exchange AFT Credits on the due date; ● New obligations for members around funds availability for AFT Credits; and ● New obligations for Clearing Agents to provide files to Indirect Clearers.

Sections of the rule which have changed significantly are highlighted for ease of reference. Note that the rules currently in force are still available through the ACSS Rules page.

CANADIAN PAYMENTS ASSOCIATION

ASSOCIATION CANADIENNE DES PAIEMENTS

RULE F1

RULES APPLICABLE TO AUTOMATED FUNDS TRANSFER (AFT) TRANSACTIONS

2017 CANADIAN PAYMENTS ASSOCIATION 2017 ASSOCIATION CANADIENNE DES PAIEMENTS

This Rule is copyrighted by the Canadian Payments Association. All rights reserved, including the right of

reproduction in whole or in part, without express written permission by the Canadian Payments Association. Payments Canada is the operating brand name of the Canadian Payments Association (CPA). For legal

purposes we continue to use “Canadian Payments Association” (or the Association) in these rules and in information related to rules, by-laws, and standards.

Rule F1

Rules Applicable to Automated Funds Transfer (AFT) Transactions

Implementation and Revisions Implemented August 17, 2015 Amendments 1. Amendments to consolidate Rules F1, F2, F3, F4, F5, F6, F11, & F12 and changes to reflect

current business practices. 2. Amendments to accommodate the ISO 20022 AFT Message Formats, approved by the Board

February 18, 2016, effective April 18, 2016. 3. Amendments to appendix IV, section 3 to replace operational committee names (‘AFT Sub

Committee’ to ‘E-Payments Working Group’) to reflect the restructuring of operational committees. Approved by the Board December 1, 2016, effective January 3, 2017.

4. Amendments to replace references to Standard 017 with the Canadian ISO 20022 Usage

Guidelines, approved by the Board December 1, 2016, effective January 30, 2017. 5. Amendments to add reasons for error corrections and to reference Standard 018, approved by the

Board February 23, 2017, effective April 24, 2017. 6. Amendments to accommodate Phase 1 of the AFT Enhancements including an additional daily

exchange and changes to the funds availability requirements; approved by the Board June 22, 2017, section 13 effective October 15, 2018, and all other sections effective September 17, 2018.

Rule F1 TABLE OF CONTENTS


Table of Contents 32TIntroduction32T .................................................................................................................................................. 1 32TScope32T ........................................................................................................................................................... 1 32TGeneral - Reference32T .................................................................................................................................... 1 32TDefinitions32T .................................................................................................................................................... 1 32TPart I – General Requirements32T .................................................................................................................... 4

32TParticipation32T ............................................................................................................................................. 4 32TRegistration32T .............................................................................................................................................. 4 32TChanges to an AFT Exchange Point32T ....................................................................................................... 4

32TPart II – Exchange & Processing Procedures32T .............................................................................................. 5 32TAFT File Layout32T ........................................................................................................................................ 5 32TExchange Deadlines and Periods32T ............................................................................................................ 5 32TServiceability Code Assignment32T .............................................................................................................. 5 32TCredit Transaction Lead Times & Exchange32T ........................................................................................... 5 32TCredit Transaction Funds Availability32T ...................................................................................................... 5 32TDebit Transaction Exchange Dates32T ......................................................................................................... 6 32TTransmission Requirements32T .................................................................................................................... 6 32TAFT File Receipt32T ...................................................................................................................................... 6 32TAFT Initial File Edit and Rejected Files32T .................................................................................................... 6 32TDelivery of AFT Files to Indirect Clearers32T ................................................................................................ 7 32TTransaction Edit, Account Validation and Rejected Transactions32T ........................................................... 7 32TResubmission of Rejected Transactions32T ................................................................................................. 7 32TProhibition against Amalgamation32T ........................................................................................................... 8

32TPart III – Returns & Exception Processing32T ................................................................................................... 9 32TTime Limitation for Return32T ........................................................................................................................ 9 32TExceptions to Time Limitation: Payor/Payee Initiated Returns32T ................................................................ 9 32TUnposted/Dishonoured Transactions/Transactions Refused by Payor/Payee32T ........................................ 9 32TRe-presentment and Rejected Returned Transactions32T ........................................................................... 9 32TRe-Routing of Transactions32T ..................................................................................................................... 9 32TReimbursement Claim 32T ........................................................................................................................... 10 32TAccuracy and Delivery of Returned Transactions32T.................................................................................. 10 32TError Correction Transactions32T ................................................................................................................ 10 32TTime Frames for Error Correction32T .......................................................................................................... 10 32TAccuracy of Error Correction Transactions32T ............................................................................................ 11 32TTime Limit for Error Correction Refusal32T ................................................................................................. 11 32TRejected Error Correction Transactions32T ................................................................................................ 11

32TPart IV – Tracing & Controls32T ...................................................................................................................... 12



32TFile Creation Number Records32T .............................................................................................................. 12 32TTracing Facilities32T .................................................................................................................................... 12 32TTrace Requests, Tracing Limits and Tracing Procedures32T ..................................................................... 12

32TPart V – Settlement Procedures32T ................................................................................................................ 13 32TSettlement32T .............................................................................................................................................. 13 32TACSS Entries32T ......................................................................................................................................... 13 32TDefault32T .................................................................................................................................................... 13

32TPart VI – Contingency Procedures32T ............................................................................................................ 14 32TDeclaration of Severity 1 Contingency Situations32T .................................................................................. 14 32TSeverity 1 Contingency Situation Emergency Conference Call Meeting(s)32T .......................................... 14 32TResponsibilities of the Direct Clearer Declaring a Severity 1 Contingency Situation32T ............................ 14 32TDeclaration of Severity 2 Contingency Situation32T.................................................................................... 14 32TSeverity 2 Contingency Situation Emergency Conference Call Meeting(s)32T .......................................... 14 32TResponsibilities of Direct Clearers during a Severity 2 Contingency Situation32T ..................................... 15 32TResponsibilities of the CPA during a Severity 2 Contingency Situation32T ................................................ 15 32TResponsibilities of Direct Clearers Relating to Exchange of AFT Files32T ................................................. 15 32TResponsibilities of Indirect Clearers Relating to Exchange of AFT Files32T .............................................. 15 32TDisaster Recovery Site32T .......................................................................................................................... 15 32TIncident Reports32T ..................................................................................................................................... 15

32TPart VII – Notice of Change Procedures32T .................................................................................................... 17 32TNotice of Change32T ................................................................................................................................... 17 32TParticipants32T ............................................................................................................................................ 17 32TNotification of NOC Participation32T ........................................................................................................... 17 32TObligation of the NOC Originating Direct Clearer and Inaccurate NOCs32T .............................................. 17 32TObligation of NOC Processing Direct Clearer and Rejected Files and Transactions32T ............................ 18 32TFile Creation Numbers32T ........................................................................................................................... 18 32TForwarding of NOCs32T .............................................................................................................................. 18 32TRecord Retention32T ................................................................................................................................... 18 32TTracing Facilities32T .................................................................................................................................... 18

APPENDIX I: AFT Sample Trace Request Form APPENDIX II: AFT Sample Reimbursement Claim Request Form APPENDIX III: CPA Service Desk Contact Information APPENDIX IV: Procedures for the Maintenance of AFT Transaction Codes

Rule F1 INTRODUCTION

Page 1 Rules Applicable to Automated Funds Transfer (AFT) Transactions

Introduction

This Rule governs the Exchange of Automated Funds Transfer (AFT) Transactions through the use of Standard 005 between Canadian financial institutions, for the purposes of Clearing and Settlement. It includes general rules relating to the Exchange of AFT Files, procedures applicable to the processing of AFT transactions, as well as the Settlement of obligations arising from the Exchange and Clearing of AFT debits and credits between Direct Clearers. It also contains procedures applicable to exception processing, problem resolution, contingency situations, and escalation procedures in the AFT environment. References to Eastern Time (ET) in this Rule are to be understood as either Eastern Standard Time or Eastern Daylight Time, depending on the time in Ottawa.

Scope

This Rule applies to all Canadian dollar and US dollar AFT Transactions, subject to the exceptions outlined in Rule K8. For rules and procedures applicable to ISO AFT Transactions created in accordance with the ISO AFT Usage Guidelines, refer to Rule F4. General - Reference This Rule shall be read in conjunction with the following Rules, Standards and guidelines: (a) Introduction to the Rules Manual; (b) Rule A4; (c) Rule F7; (d) Rule F8; (e) Rule H1; (f) Rule H3; (g) Rule G12; (h) Rule K5; (i) Rule K8; (j) CPA Standard 005; (k) CPA Standard 007; (l) CPA Standard 018; and (m) The ISO AFT Usage Guidelines. Definitions

In this Rule,



“AFT” means Automated Funds Transfer by electronic media and in accordance with CPA Standard 005 and the ISO AFT Usage Guidelines; “AFT Exchange Point” means the electronic site from which a Direct Clearer delivers and receives AFT Files; “AFT File” means a file containing one or more AFT Transactions as outlined in CPA Standards; “AFT Initial File Edit” means the process of validating an exchanged AFT File; “AFT Logical Record Type” means a logical record type as defined in CPA Standard 005; “AFT Transaction” means a Payment Item exchanged in an AFT File as defined in Standard 005 or the ISO AFT Usage Guidelines; “CPA Services Network (CSN)” means the CPA managed network that is used by Direct Participants to transmit certain electronic Payment Items, and which may be used to transmit proprietary files on a bilateral basis, as agreed to by the parties and with the consent of the CPA; “Credit Transaction” means a credit Payment Item exchanged in an AFT File as defined in CPA Standard 005; “Debit Transaction” means a Pre-authorized Debit Payment Item within the meaning of Rule H1 exchanged in an AFT File as defined in CPA Standard 005. [Note: This is equivalent to a Payment Reversal Transaction as defined in Rule F4]; “Due Date” means the date indicated by the Payment Originator of the transaction on which AFT Transaction funds are to be credited to a Payee’s account, in the case of a Credit Transaction, or debited from a Payor’s account, in the case of a Debit Transaction. [Note: “Due Date” is also referred to as “Date Funds To Be Available” for Logical Record Types “C”, “E”, and “I” in CPA Standard 005]; “Error Correction Transaction” means an AFT Transaction used to correct an error made by the Payment Originator or the Originating Direct Clearer; “Exchange Deadline” means the point in time at the end of an Exchange Period. For example, where the Exchange Period is between 09:30:01 ET and 16:30:00 ET, the Exchange Deadline is 16:30:00 ET; “Exchange Period” means a period of time defined in this Rule in which an AFT File may be Exchanged between an Originating and a Processing Direct Clearer. “IC Cut-off” means, in relation to a Credit Transaction, the point in time 2 hours following the end of the Exchange Period in which the AFT File containing the transaction was Exchanged. For example, where the Exchange Period is between 09:30:01 ET and 16:30:00 ET, the IC Cut-off is 18:30:00 ET. “Notice of Change (NOC)” means a non-financial transaction created by a Processing Direct Clearer which allows the Originating Direct Clearer to inform Payment Originators of changes to payment routing information. [Note: This is equivalent to an Identification Modification Advice (IMA) message as defined in Rule F4]; “NOC File” means a file containing one or more NOCs as outlined in CPA Standard 005; “NOC Originating Direct Clearer” means the issuer of an NOC;



“NOC Processing Direct Clearer” means the recipient of an NOC; “Originating Direct Clearer” means the Direct Clearer that delivers AFT Files to another Direct Clearer; “Payment Originator” means a business, association, government or other entity which, upon authorization from its Payee or Payor, initiates an AFT Transaction; “Processing Direct Clearer” means the Direct Clearer that receives AFT Transactions from an Originating Direct Clearer; “Rejected Transaction” means an AFT Transaction which has not passed the Transaction Edit by the Processing Direct Clearer, and is delivered back to the Originating Direct Clearer in an AFT File; "Return Reason Code” means a three (3) digit code, as assigned by the CPA and defined in CPA Standard 007, which is used by the Processing Direct Clearer or Indirect Clearer to identify the reason for the return of the payment to the Payee/Payor; “Returned Transaction” means an AFT Transaction which is unpostable, dishonoured, or refused by the Payor/Payee at the Branch of account, and is delivered back to the Originating Direct Clearer in an AFT File; “Serviceability Code” means a code representing the number of Business Days required to credit a Payee’s account with an AFT Credit Transaction on the date those funds are to be made available; “Summary of Data Delivered Report” means a report of the total number and dollar amount of the AFT Transactions contained on an AFT File; “Trace Request” means a request by the Originating Direct Clearer for the trace of an AFT Transaction which has been delivered to a Processing Direct Clearer; “Transaction Code” means a three (3) digit code, as assigned by the CPA and defined in CPA Standard 007, used by the Payment Originator to identify the type of payment, and by the Processing Direct Clearer or Indirect Clearer to further identify the payment to the Payee/Payor. “Transaction Edit” means the process of validating individual AFT Transactions contained on an exchanged AFT File in accordance with CPA Standards, the ISO AFT Usage Guidelines and the Financial Institution File (FIF). “Warehoused AFT Transactions” means those AFT Transactions held by a Direct Clearer for future processing.

Rule F1 PART I Page 4


Part I – General Requirements

Participation

1. Each Direct Clearer shall participate in the Exchange of AFT Files via the CSN.

Registration

2. (a) At least 90 days prior to participating in AFT Exchange, each Direct Clearer shall register with the CPA and provide notification regarding which AFT Exchange Point(s) (i.e., 10 – Montreal, 20 – Toronto, 90 – Calgary and 00 – Vancouver) the Direct Clearer will use.

(b) Registration with the CPA constitutes notice that the Direct Clearer is prepared to:

(i) receive all AFT Logical Record Types at a minimum of one AFT Exchange Point; (ii) deliver, at a minimum, Rejected Transactions and AFT Logical Record Types “I”

and “J”; (iii) provide the Association with its Account Number Formats and Validation Criteria

(for all Canadian and U.S. dollar accounts domiciled in Canada) for reproduction in the CPA’s “List of Account Number Formats and Validation Criteria”; and

(iv) Employ security controls to protect the integrity, privacy and confidentiality of AFT Transaction content, in accordance with Standard 018 – Payment Item Information Security Standard.

(c) Prior to the Exchange of AFT Files, the Direct Clearer shall mutually Exchange test files

with all other Direct Clearers and shall provide confirmation of successful testing to the CPA prior to the effective date.

(d) Each Processing Direct Clearer shall receive all AFT Logical Record Types destined for an

AFT Exchange Point for all its Branches and any Financial Institution for which it acts as a Clearing Agent.

(e) Notwithstanding anything else in this Rule, each Direct Clearer shall be responsible and liable for every Credit Transaction, and every Payment Item purporting to be a Credit Transaction, that it delivers for the purpose of Clearing and Settlement. Each Direct Clearer and shall indemnify the CPA and its Members for any direct loss, costs or damages caused by the Direct Clearer’s failure to comply with CPA Rules.

Changes to an AFT Exchange Point 3. (a) A Direct Clearer may cease to accept AFT Files at any AFT Exchange Point by providing

180 days’ written notice to the CPA, provided they continue to Exchange through a minimum of one AFT Exchange Point. The CPA shall give notice to all other Direct Clearers. Withdrawal from an AFT Exchange Point with less than 180 days’ notice requires the unanimous consent of all Direct Clearers.

(b) Where a Direct Clearer wishes to add an additional Exchange Point, it shall provide the

CPA with at least 90 days’ notice in advance of the effective date of the addition.

Rule F1 PART II Page 5


Part II – Exchange & Processing Procedures

AFT File Layout

4. The content and structure of an AFT File shall be in accordance with Standard 005.

Exchange Deadlines and Periods 5. An AFT File may be Exchanged within the following Exchange Periods, as organized by the

applicable Exchange Deadline (in ET):

Exchange Deadline (Business Days only) Exchange Period

09:30:00 hours 21:00:01 – 09:30:00 hours

(this period begins on one Business Day and ends on the next Business Day)

16:30:00 hours 09:30:01 – 16:30:00 hours 21:00:00 hours 16:30:01 – 21:00:00 hours

Serviceability Code Assignment 6. Each Direct Clearer shall designate on the Financial Institutions File a Serviceability Code of:

(a) “0” for each of its destination Branches; and

(b) Either “0”, “1”, or “2” for each destination Branch of a Financial Institution for which it acts as a Clearing Agent.

Credit Transaction Lead Times & Exchange 7. Each Originating Direct Clearer shall Exchange AFT Credit Transactions, where available, on or

before the Due Date, in accordance with the lead time requirement and Serviceability Code of the destination Branch. Serviceability Codes and associated lead times are as follows: (a) Serviceability Code “0” – Credit Transactions shall be Exchanged on the earlier of (i) the

Business Day prior to the Due Date, where the Credit Transactions are available for Exchange; or (ii) the Due Date;

(b) Serviceability Code “1” – Credit Transactions shall be Exchanged one Business Day before

the Due Date; and

(c) Serviceability Code “2” – Credit Transactions shall be Exchanged two Business Days before the Due Date.

Credit Transaction Funds Availability 8. Where a Credit Transaction Logical Record Type “C” is received by a Payee’s Financial Institution

in accordance with section 7 and 13, that Processing Direct Clearer or Indirect Clearer shall, unless precluded by a prior restriction placed on the Payee’s account, be responsible for ensuring the funds are available for withdrawal or other use in accordance with the terms of agreement (for example, an account agreement) between the Payee’s Financial Institution and the Payee within the following timeframes:



(a) Subject to subsections (c) and (d), below, where the destination branch is a Serviceability Code “0”, funds shall be made available within 2 hours of the Exchange Deadline by which the transaction was received;

(b) Where the destination branch is a Serviceability Code “1” or “2”, funds shall be made

available by the opening of business on the Due Date of the transaction;

(c) Subject to subsection (d), below, where the destination branch is an Indirect Clearer with a Serviceability Code “0”, funds shall be made available within 2 hours of the IC Cut-off by which the transaction was received by the Indirect Clearer.

(d) (i) Where a Credit Transaction is received the Business Day prior to the Due Date,

funds shall be made available by the opening of business on the Due Date.

(ii) Where a Credit Transaction is destined to an account other than a demand deposit account, the transaction may be treated as though destined to a Serviceability Code “1” branch.

(iii) Where a Credit Transaction destined to a Serviceability Code “0” branch is

Exchanged on or before October 14, 2018, the transaction may be treated as though destined to a Serviceability Code “1” branch.

Debit Transaction Exchange Dates

9. No Originating Direct Clearer shall deliver a Debit Transaction to a Processing Direct Clearer prior to the Due Date.

Transmission Requirements 10. (a) An Originating Direct Clearer shall make reasonable efforts to transmit AFT Files with

sufficient time to allow the Processing Direct Clearer to receive the file prior to the applicable Exchange Deadline.

(b) A Summary of Data Delivered Form shall be sent to the Processing Direct Clearer concurrent with the exchange of the associated AFT File.

AFT File Receipt

11. (a) An AFT File is considered delivered in the Exchange Period in which the Processing Direct Clearer received the file, regardless of whether the transmission was initiated in a previous Exchange Period.

(b) Where a Processing Direct Clearer does not receive an AFT File from an Originating Direct Clearer in an Exchange Period, the Processing Direct Clearer shall, on a best efforts basis, give notice to the Originating Direct Clearer of non-receipt or late receipt as soon as possible and no later than one hour after the applicable Exchange Deadline.

AFT Initial File Edit and Rejected Files

12. (a) The Processing Direct Clearer shall perform an initial edit check in accordance with Standard 005 on each AFT File received and if unable to process the AFT File, shall give notice to the Originating Direct Clearer as soon as possible and no later than one hour following receipt and indicate the File Creation Number, File Creation Date, and a reason for rejecting the AFT File.



(b) If the Originating Direct Clearer is unable to resend an AFT File rejected under

subsection (a) in the same Exchange Period, the Originating Direct Clearer may resend the file in a subsequent Exchange Period.

Delivery of AFT Files to Indirect Clearers 13. A Processing Direct Clearer acting for an Indirect Clearer with branch(es) bearing Serviceability

Code “0” shall deliver, at a minimum, all Logical Record Type “C” Credit Transactions destined for that Indirect Clearer‘s Serviceability Code “0” branch(es) no later than the IC Cut-off applicable to the Credit Transactions.

Notes: For further certainty, nothing in this rule prevents a Processing Direct Clearer and an Indirect

Clearer from establishing a mutually agreed upon time for the delivery of transactions that is earlier than the IC Cut-off. This section 13 shall enter into effect on October 15, 2018.

Transaction Edit, Account Validation and Rejected Transactions

14. (a) AFT Transactions failing to pass the Transaction Edit shall be rejected and delivered back to the Originating Direct Clearer on an AFT File no later than the Business Day following editing of the original AFT File. The total number of Rejected Transactions due on each Settlement date shall be included with the appropriate totals in the Summary of Data Delivered Report (refer to CPA Standard 005, Section C, Appendix 1).

(b) (i) Each Direct Clearer shall submit additions or revisions to validation routines and account number formats to the CPA 180 calendar days prior to the effective date. The CPA will circulate this information as received to Direct Clearers on behalf of the submitting Direct Clearer.

(ii) A Processing Direct Clearer may not reject AFT Transactions destined to an

Indirect Clearer for which it acts as Clearing Agent for reason of invalid account number, where the Clearing Agent has not made available the Indirect Clearer’s account number formats and validation routines for publication in the CPA’s “List of Account Number Formats and Validation Criteria” in accordance with subsection (i), above.

(c) (i) Rejected Transactions shall bear a 900 transaction type and the appropriate invalid

data element as specified in Section D, of CPA Standard 005.

(ii) Should an AFT File contain 50 or more Rejected Transactions, the Processing Direct Clearer shall immediately notify the Originating Direct Clearer.

(d) (i) Credit Transactions with a Due Date more than 30 calendar days prior to the file

creation date shall be rejected. (ii) Debit Transactions with a Due Date more than 173 calendar days prior to the file

creation date may be rejected.

Resubmission of Rejected Transactions

15. If an AFT Transaction has been rejected by a Processing Direct Clearer, it may only be resubmitted by the Originating Direct Clearer as a new Transaction.



Prohibition against Amalgamation

16. Each AFT Transaction received by a Processing Direct Clearer shall be handled individually and shall not be amalgamated with any other AFT Transaction.

Rule F1 PART III


Part III – Returns & Exception Processing

Time Limitation for Return

17. Subject to section 18 and 19, where a Financial Institution is returning a Debit or Credit Transaction, it shall return the transaction no later than the Business Day following receipt by the first organizational unit that is able to make or act upon a decision to dishonour or refuse an Item.

Exceptions to Time Limitation: Payor/Payee Initiated Returns

18. Each Debit Transaction being returned due to a Payor’s claim for reimbursement shall be returned in accordance with the time limitation set out in Rule H1.

19. A Credit Transaction may be refused by a Payee up to and including 90 calendar days after the

date on which the transaction was processed to the Payee’s account. Credit Transactions being refused after this time shall be addressed outside of the Clearing.

Unposted/Dishonoured Transactions/Transactions Refused by Payor/Payee

20. AFT Transactions (Logical Record Types “C”, “D”, “E” and “F”) that are accepted in the AFT Initial File Edit by the Processing Direct Clearer and subsequently unposted, dishonoured or refused by a Payor/Payee shall be returned using the applicable Return Reason Code indicated in Standard 007, section E, Appendix II.

21. A Returned Transaction (Logical Record Type "I" and “J”) accepted in the AFT Initial File Edit

shall not be returned for the purpose of Clearing and Settlement. It shall be treated as an Item in Dispute. (Refer to Rule A6.)

Re-presentment and Rejected Returned Transactions

22. A Debit Transaction which has been returned for the reason “Non-Sufficient Funds” (Return Reason Code 901), or “Funds Not Cleared” (Return Reason Code 908), may be re-presented on a one-time only basis provided that re-presentment occurs within 30 days following the return of the original Debit Transaction. In addition, a Pre-Authorized Debit shall only be re-presented for the same amount as the original Pre-Authorized Debit (i.e. shall not include additional charges). If the Debit Transaction is dishonoured a second time, it shall not be re-presented by the Originating Direct Clearer.

23. Notwithstanding section 18, a Processing Direct Clearer shall not resubmit a Returned

Transaction (Logical Record Type “I” or “J”) that has been rejected by the Originating Direct Clearer.

Re-Routing of Transactions

24. Where a Financial Institution undertakes the re-routing of a Debit or Credit Transaction, any liability resulting directly from the re-routing shall be borne by that Financial Institution.

25. Where a Financial Institution has elected to re-route a Debit or Credit Transaction and wishes to

advise the Payment Originator of corrections to Branch account information, the re-routing Financial Institution shall deliver a NOC.

Rule F1 PART III Page 10


Reimbursement Claim

26. Where a Reimbursement Claim is required for the return of an AFT Debit Transaction (refer to Rule H1), the Payor’s FI shall retain the Reimbursement Claim for a minimum period of twelve (12) months from the date the Item was returned.

27. In the event that a copy of the Reimbursement Claim is required, the following procedures shall

apply: (a) The Originating Direct Clearer shall submit a Reimbursement Claim Request Form

(sample provided in Appendix II) to the Processing Direct Clearer (refer to the AFT Master Contact List) prior to the expiration of the twelve (12) month retention timeframe.

(b) Where the Payor’s FI is an Indirect Clearer, the Processing Direct Clearer shall forward

the completed Reimbursement Claim Request Form to that Indirect Clearer as soon as possible but no later than the next Business Day.

(c) The Payor’s FI shall fulfill the request within 30 calendar days of receipt by: (i) providing a copy of the Reimbursement Claim to the requestor, or

(ii) if unable to do so, by reimbursing the amount of the claim, according to the

instructions provided in the Reimbursement Claim Request Form.

Accuracy and Delivery of Returned Transactions

28. A Direct Clearer initiating a Returned Transaction is responsible for ensuring the accuracy of every Returned Transaction it delivers to another Direct Clearer. Where an incorrect debit Returned Transaction is delivered, the Direct Clearer that initiated the Transaction shall reimburse the receiving Direct Clearer for the value equal to the inaccurate Returned Transaction and any service or interest charges incurred.

Error Correction Transactions

29. An Error Correction Transactions may only be initiated to correct to the following types of errors:

a) Duplicate payment b) Incorrect amount in original payment; c) Incorrect account number; d) Canceled PAD agreement; and e) Transaction not in accordance with PAD agreement.

30. Returned Transactions (i.e. “I” and “J” records) are not eligible for Error Correction. 31. Error Correction Transactions shall not be originated to protect a Member from an insolvent

Payment Originator. 32. An Error Correction Transaction shall not be rejected for the reason that the original transaction,

where received in the same Exchange Period, has not yet been processed.

Time Frames for Error Correction

Rule F1 PART III Page 11


33. Delivery of Error Correction Transactions shall be made no earlier than the exchange of the original Debit or Credit Transaction, and no later than three (3) Business Days following the Settlement date.

Accuracy of Error Correction Transactions 34. An Originating Direct Clearer shall ensure the accuracy of every Error Correction Transaction it

delivers to a Processing Direct Clearer. Where an incorrect Error Correction Transaction is delivered to and received by the Processing Direct Clearer, the Originating Direct Clearer that delivered it shall reimburse the Processing Direct Clearer for the value equal to the inaccurate Error Correction Transaction and any service or interest charges incurred.

Time Limit for Error Correction Refusal

35. A customer may refuse an AFT Error Correction Transaction (Logical Record Type “E” and “F”) provided that it does so within 90 calendar days subsequent to the posting date. In this case, the AFT Error Correction Transaction shall be returned using Return Reason Code 915 (to return a Logical Record Type E) or 922 (to return a Logical Record Type “F”) in accordance with CPA Standards 005 and 007.

Rejected Error Correction Transactions

36. An Originating Direct Clearer shall not resubmit an Error Correction Transactions (Logical Record Type “E” or “F”) that has been rejected by the Processing Direct Clearer.

Rule F1 PART IV Page 12


Part IV – Tracing & Controls

File Creation Number Records

37. In order to ensure that adequate control of File Creation Numbers is maintained, a record of the last 30 File Creation Numbers processed should be kept. If the number does not conform to CPA Standard 005 it is cause for rejection.

Tracing Facilities

38. All Direct Clearers shall maintain adequate tracing facilities in accordance with Rule B10.

Trace Requests, Tracing Limits and Tracing Procedures

39. (a) A Trace Request (refer to Appendix I) shall be initiated by the Originating Direct Clearer to the Processing Direct Clearer at the AFT Exchange Point subject to Regional Clearing Association arrangements. The Originating Direct Clearer shall not be obliged to respond to an enquiry from a customer of a Processing Direct Clearer.

(b) A Processing Direct Clearer shall not be obliged to respond to any Trace Requests

received more than 12 months after the AFT Transaction Settlement date.

(c) A Processing Direct Clearer shall not be obliged to respond to any Trace Requests regarding an AFT Transaction of less than $20.00

(d) At the option of the Processing Direct Clearer, a Trace Request may be accepted by

telephone. Adequate records of telephone requests shall be kept by the Processing Direct Clearer.

(e) The Processing Direct Clearer shall determine the disposition of the AFT Transaction and

shall advise the Originating Direct Clearer of the status and of any action taken, as follows:

(i) within two (2) Business Days of the date of receipt of the request, for Trace Requests with Settlement dates of up to 30 calendar days; or

(ii) within five (5) Business Days of the date of the receipt of the request, for Trace

Requests with Settlement dates of greater than 30 calendar days.

Rule F1 PART V Page 13


Part V – Settlement Procedures

Settlement

40. (a) Each Direct Clearer shall maintain a summary of Debit and Credit Transactions, by AFT File, and by Due Date for all AFT Transactions Exchanged for a period of one year.

(b) No Settlement shall be made for obligations arising from any AFT Transactions contained

in a rejected AFT File.

(c) Settlement must be effected for obligations arising from the Exchange and Clearing of Rejected Transactions.

(d) The Settlement date shall be the Business Day following the Due Date or the Business

Day following the date of Exchange for AFT Transactions delivered after the Due Date.

(e) Where applicable, the rules and regulations of the Regional Clearing Association for the handling of Clearing Logs and settling of balances shall apply.

ACSS Entries

41. (a) Each Processing Direct Clearer shall initiate, in the National Electronic Settlement Region and using stream identifier “C”, a debit entry against each of the other Direct Clearers from which it has received Credit Transactions (i.e., “C”, “F” and “I” Logical Record Types) for Settlement in accordance with subsection 31(d). Each debit entry shall specify the total volume and value of AFT Transactions received from the Direct Clearer being debited. Such debit entry shall be made by 5:00 a.m. Ottawa time on the settlement date, except where the settlement date is a Business Day following a Regional or Civic Holiday, in which case entries may be made up to 9:30 a.m. Ottawa time on that day.

(b) Each Originating Direct Clearer shall initiate, in the National Electronic Settlement Region and using stream identifier “D”, a debit entry against each of the other Direct Clearers from which it has delivered Debit Transactions (i.e., “D”, “E” and “J” Logical Record Types). Each debit entry shall specify the total volume and value of AFT Transactions delivered to each Direct Clearer being debited. Such debit entry shall be made by 05:00 a.m. ET on the Settlement Date, except where the Settlement Date is a Business Day following a Regional or Civic Holiday, in which case entries may be made up to 09:30 a.m. ET on that day.

Default

42. In the event of a Default, AFT Transactions shall be returned or rejected in accordance with the procedures outlined in Rules L1 (for Default of a Direct Clearer) or L2 (for Default of an Indirect Clearer).

Rule F1 PART VII Page 14


Part VI – Contingency Procedures

Declaration of Severity 1 Contingency Situations

43. Each Direct Clearer shall declare a “Severity 1 Contingency Situation” when it:

(a) cannot process AFT Files; (b) cannot send or receive AFT Files; (c) cannot make funds available, in accordance with section 8, to the Payee’s account for

Credit Transactions; or (d) has encountered an internal incident that is likely to impact more than one other Direct

Clearer. In the event of a “Severity 1 Contingency Situation”, the Direct Clearer declaring the Contingency Situation shall immediately give notice to the CPA by contacting the Service Desk (see Appendix III of this Rule).

Severity 1 Contingency Situation Emergency Conference Call Meeting(s)

44. Upon the CPA receiving notice of the Severity 1 Contingency Situation, it shall advise the AFT representatives of each Direct Clearer and such other persons or entities considered appropriate. Emergency conference call meetings shall be arranged as deemed necessary by the CPA in consultation with the AFT representatives.

Responsibilities of the Direct Clearer Declaring a Severity 1 Contingency Situation

45. During each emergency conference call meeting or as otherwise requested by the CPA, the Direct Clearer declaring the Severity 1 Contingency Situation shall report on the Contingency Situation. This report shall include, at a minimum, the following information:

(a) the nature of the Contingency Situation, anticipated recovery time, what systems or

processes are affected, and suggested schedule of update for communication; and

(b) if possible, specific details on the cause of the Contingency Situation (e.g., hardware, software, procedural or personnel), what additional Payment Items (if any) are affected, the customer impact (if any), and a summary of the procedures that are being conducted to resolve the Contingency Situation.

Declaration of Severity 2 Contingency Situation

46. “Severity 2 Contingency Situation” shall be declared if the CPA Services Network is not operational for all Direct Clearers (in any situation other than a Force Majeure Situation).


47. Upon the CPA discovering or receiving notice of a potential Severity 2 Contingency Situation, it shall advise the AFT representatives of each Direct Clearer and such other persons or entities considered appropriate. The CPA, in consultation with the AFT representatives of each Direct Clearer, shall determine the nature and extent of the Contingency Situation and arrange conference call meetings as deemed necessary.



Responsibilities of Direct Clearers during a Severity 2 Contingency Situation

48. In the event the CPA Services Network is not operational for Direct Clearers, Direct Clearers shall immediately give notice to the CPA of the Severity 2 Contingency Situation unless the CPA originally identified the Contingency Situation.

Responsibilities of the CPA during a Severity 2 Contingency Situation

49. In the event of a Severity 2 Contingency Situation, the CPA shall report on the Contingency Situation during each emergency conference call meeting. This report shall include, at a minimum, the following information:

(a) the nature of the Contingency Situation, anticipated recovery time, what systems or

processes are affected, likely time for resolution of the CPA Services Network problem and suggested schedule of update for communication; and

(b) if possible, specific details of the cause of the Contingency Situation (e.g., hardware,

software, procedural or personnel), what additional Payment Items (if any) are affected, and a summary of the procedures that are being conducted to resolve the Contingency Situation.

Responsibilities of Direct Clearers Relating to Exchange of AFT Files

50. In the event of a Severity 2 Contingency Situation, Direct Clearers shall delay pre-scheduled transmissions of AFT Files to each Direct Clearer until such time that the network becomes operational.

Responsibilities of Indirect Clearers Relating to Exchange of AFT Files 51. Where an Indirect Clearer with one or more Serviceability Code “0” branches experiences an

interruption in services and cannot make funds available to the Payee’s account in accordance with section 8, it shall immediately give notice to the CPA by contacting the Service Desk (see Appendix III of this Rule).

Disaster Recovery Site

52. Each Direct Clearer shall have, and maintain, two separate and distinct sites (primary site and disaster recovery site) connected to the CPA Services Network at all times, for the transmission of AFT Files.

53. Each Direct Clearer shall test its disaster recovery site at least once per calendar year. The tests

shall be coordinated by the CPA on pre-determined dates. 54. The Originating Direct Clearer is prepared to recreate and resubmit an AFT File upon request

from a Processing Direct Clearer, provided that such a request is made within three business days of the AFT File exchange. The Processing Direct Clearer should have the facility to process the original Logical Record Type “A” and related control data.

Incident Reports

55. Each Direct Clearer that is required to report on a Severity 1 Contingency Situation in accordance with this Rule shall complete and forward an AFT Contingency Situation Incident Report Form to



the CPA as soon as possible and no later than 10 Business Days of encountering a Severity 1 Contingency Situation (contact the CPA Service Desk to obtain report).



Part VII – Notice of Change Procedures

Notice of Change 56. This Part outlines procedures for a Processing Direct Clearer to give Notice of Change (NOC) to a

Payment Originator via the Originating Direct Clearer, using an automated method. (a) The procedures outlined below shall be applicable to all changes to payment routing

information affecting Canadian and U.S. dollar accounts. NOC transactions are zero-dollar transactions.

(b) The procedures outlined shall be applicable to Logical Record Types “S”, “U”, and “V” as

defined in CPA Standard 005.

Participants 57. (a) It shall be mandatory for Direct Clearers and Public Works and Government Services

Canada (PWGSC) to receive NOCs.

(b) A Direct Clearer that elects to use a NOC to notify other Direct Clearers of changes to payment routing information shall provide notice to the CPA in accordance with section 58 below.

Notification of NOC Participation 58. (a) Prior to delivering NOCs, a Direct Clearer shall advise the CPA at least 180 days in

advance of the implementation date. (b) The CPA shall notify other participants that the Direct Clearer is prepared, as of its

implementation date, to deliver NOC Files (subject to subsection (c)). The CPA shall notify Direct Clearers of all new registrations, including implementation dates, and the delivery frequency.

(c) NOC participants shall exchange and successfully process test files with a minimum of two

other participants prior to exchanging production files.

Obligation of the NOC Originating Direct Clearer and Inaccurate NOCs 59. (a) The NOC Originating Direct Clearer shall be responsible for the accuracy of the NOC.

(b) A Summary of NOC Transactions Delivered form shall be provided by the NOC Originating

Direct Clearer.

(c) The NOC Originating Direct Clearer shall be responsible for every NOC that it delivers and shall be liable for the indemnification of the Association and its Members for any direct loss, costs or damages, incurred by them as a result of an NOC that it has delivered, except where such loss, costs or damages resulted from an error by the NOC Processing Direct Clearer.

(d) A Payment Item that is misdirected as a result of an inaccurate NOC, may be treated as

an Item in Dispute and dealt with in accordance with Rule A6.



(e) The NOC Originating Direct Clearer shall ensure that NOCs for Canadian and US dollar accounts are delivered in separate NOC files.

Obligation of NOC Processing Direct Clearer and Rejected Files and Transactions 60. The NOC Processing Direct Clearer’s Data Centre shall edit each NOC File received and, if

unacceptable give notice to the NOC Originating Direct Clearer that the NOC File is unacceptable, within three (3) Business Days after receipt, along with the reason for rejection.

61. Where a NOC transaction is rejected, the NOC Processing Direct Clearer shall give notice of

rejection to the NOC Originating Direct Clearer within five (5) Business Days after receipt of the original NOC File, along with the reason for rejection.

62. In the case of NOCs for Credit Transactions, where the NOC Processing Direct Clearer forwards

an NOC to a Payment Originator, the NOC Processing Direct Clearer shall ensure the Payment Originator has been made aware of the importance of accepting and acting upon the NOC in relation to Credit Transactions similar to the importance of accepting and acting upon an NOC in relation to Debit Transactions as set out in Rule H1, Appendix I, section 17.

File Creation Numbers 63. Each Direct Clearer shall keep a record of at least the last ten File Creation Numbers processed in

order to ensure that adequate control of NOC File Creation Numbers is maintained. If the NOC File Creation Number does not conform to CPA Standard 005, the NOC File shall be rejected.

Forwarding of NOCs 64. The NOC Processing Direct Clearer shall forward the NOC to the Payment Originator within seven

(7) Business days of receipt of the NOC from the NOC Originating Direct Clearer.

Record Retention 65. The NOC Originating Direct Clearer shall have the ability to recreate the NOC File, for a period of

seven (7) Business days after delivery.

Tracing Facilities 66. Each Direct Clearer shall maintain adequate tracing facilities to ensure that all NOC Originating

Direct Clearers and all NOC Processing Direct Clearers are able to trace NOCs for a period of two years. Traces of NOCs shall not be initiated to determine whether a NOC has been acted upon.

Rule F1 Appendix I


APPENDIX I: AFT Sample Trace Request Form

Rule F1 Appendix II


APPENDIX II: AFT Sample Reimbursement Claim Request Form

Rule F1 Appendix III


APPENDIX III: Payments Canada Service Desk Contact Information

Payments Canada Service Desk Contact Information

Severity 1 and 2 Contingency Situation

UHours of Availability Payments Canada Service Desk – (On hours support)

By phone or email from Sunday at 21:30 hrs to Friday at 21:30 hrs ET.

Payments Canada Service Desk – (Off hours support)

UMonitored voicemail onlyU from Friday at 21:30 hrs to Sunday at 21:30 hrs ET.

UTelephone Number * 1-800-263-8863 UFax Number 1-613-688-1123 UEmail Address [email protected] * The telephone number is automatically re-routed to the alternate help desk in the event of a problem at the primary help desk.

Rule F1 Appendix IV

Page 1


APPENDIX IV: Procedures for the Maintenance of AFT Transaction Codes Introduction 1. This Appendix outlines procedures that are required to add and modify Transaction Codes and

Return Reason Codes in CPA Standard 007. Annual Process for Transaction Codes Updates 2. Requests for adding or modifying a Transaction Code shall be submitted to the CPA by a Direct

Clearer no later than the first business day of March for implementation on the first business date of October of the same year, using the “AFT Transaction Code Application Form,” below.

3. All requests received prior to the annual March submission deadline shall be evaluated by the E-

Payments Working Group on the basis of potential volume of transactions, potential percentage of total transactions exchanged bearing the modified or additional Transaction Code, applicability of the modified or additional Transaction Code to a broad cross-section of Payees/Payors, and other issues related to the benefit of the modified or additional Transaction Code as may be identified by the applicant.

Requests for new Transaction Codes for financial transactions that are restricted to a limited range

of Payees or Payors shall not be considered. Where a Transaction Code is deemed previously allocated at a generic level, the request for a new Transaction Code shall be denied with the recommendation that appropriate descriptive fields, such as originator long name and sundry information, be utilized instead.

Notification of Approved Transaction Codes 4. Upon approval by the Board, notification of all additions or modifications of AFT Transaction codes

for that year will be provided to Direct Clearers. All changes will carry an effective date of the first business day of October.

Rule F1 Appendix IV

Page 2 (end)


APPENDIX V: Procedures for the Maintenance of AFT Transaction Codes

Please return to:

Canadian Payments Association Payment Operations

Tel: 1-800-263-8863, Fax: (613) 233-3385 [email protected]

mailto:[email protected]



RULE F4

RULES APPLICABLE TO AUTOMATED FUNDS TRANSFER (AFT) TRANSACTIONS

EXCHANGED USING ISO 20022 MESSAGES


This Rule is copyrighted by the Canadian Payments Association. All rights reserved, including the

right of reproduction in whole or in part, without express written permission by the Canadian Payments Association.

Payments Canada is the operating brand name of the Canadian Payments Association (CPA). For

legal purposes we continue to use “Canadian Payments Association” (or the Association) in these rules and in information related to rules, by-laws, and standards.

Rules Applicable to AFT Transactions Exchanged Using ISO 20022 Messages

Implementation and Revisions Implemented April 18, 2016 Amendments Post-April 2016 1. Amendments to appendix VII section 3 replace operational committee names (‘AFT Sub

Committee’ to ‘E-Payments Working Group’) to reflect the restructuring of operational committees. Approved by the Board December 1, 2016, effective January 3, 2017.

2. Amendments to replace references to Standard 017 with the Canadian ISO 20022 Usage

Guidelines, approved by the Board December 1, 2016, effective January 30, 2017. 3. Amendment to include reasons for reversals and to reference Standard 018, approved by the

Board February 23, 2017, effective April 24, 2017. 4. Amendments to accommodate Phase 1 of the AFT Enhancements, including an additional daily

AFT exchange and changes to the funds availability requirements, approved by the Board June 22, 2017, section 18 effective October 15, 2018, and all other sections effective September 17, 2018.



Table of Contents 32TIntroduction32T .................................................................................................................................................. 1 32TScope32T ........................................................................................................................................................... 1 32TGeneral - Reference32T .................................................................................................................................... 1 32TDefinitions32T .................................................................................................................................................... 2 32TPart I – General Requirements32T .................................................................................................................... 5

32TParticipation32T ............................................................................................................................................. 5 32TRegistration for the Exchange of ISO AFT Transactions32T ......................................................................... 5 32TAdditional Requirements for Direct Clearer Participation32T ........................................................................ 5 32TAdditional Requirements for Indirect Clearer Participation32T ...................................................................... 6 32TProhibited Content32T ................................................................................................................................... 6 32TChanges to an AFT Exchange Point32T ....................................................................................................... 6

32TPart II – Exchange & Processing Procedures32T .............................................................................................. 7 32TAFT File Layout32T ........................................................................................................................................ 7 32TExchange Deadlines and Periods32T ............................................................................................................ 7 32TServiceability Code Assignment32T .............................................................................................................. 7 32TCredit Transaction Funds Availability32T ...................................................................................................... 7 32TDebit Transaction Exchange Dates32T ......................................................................................................... 8 32TTransmission Requirements32T ................................................................................................................. 8 32TAFT File Receipt32T ...................................................................................................................................... 8 32TAFT Initial File Edit and Rejected Files32T .................................................................................................... 8 32TDelivery of AFT Files to Indirect Clearers32T ................................................................................................ 9 32TTransaction Edit, Account Validation and Rejected Transactions32T ........................................................... 9 32TResubmission of Rejected Transactions32T ................................................................................................. 9 32TProhibition against Amalgamation32T ......................................................................................................... 10 32TRemittance Information32T .......................................................................................................................... 10

32TPart III – Returns & Exception Processing32T ................................................................................................. 11 32TTime Limitation for Return32T ...................................................................................................................... 11 32TExceptions to Time Limitation: Debtor/Creditor Initiated Returns32T .......................................................... 11 32TUnposted/Dishonoured Transactions/Transactions Refused by Payor/Payee32T ...................................... 11 32TRe-presentment and Rejected Returned ISO Transactions32T .................................................................. 11 32TRe-Routing of Transactions32T ................................................................................................................... 11 32TReimbursement Claim 32T ........................................................................................................................... 12 32TAccuracy and Delivery of Returned Transactions32T.................................................................................. 12 32TPayment Reversal Transactions32T ............................................................................................................ 12 32TTime Frames for Payment Reversal32T ...................................................................................................... 13 32TTime Limit for Refusal of an ISO AFT Payment Reversal Transaction32T ................................................. 13



32TRejected Payment Reversal Transactions32T ............................................................................................. 13 32TPart IV – Retention & Tracing32T .................................................................................................................... 14

32TMessage Identification Numbers Records32T ............................................................................................. 14 32TTracing32T ................................................................................................................................................... 14 32TTrace Requests, Tracing Limits and Tracing Procedures32T ..................................................................... 14

32TPart V – Settlement Procedures32T ................................................................................................................ 14 32TSettlement32T .............................................................................................................................................. 14 32TACSS Entries32T ......................................................................................................................................... 15 32TDefault32T .................................................................................................................................................... 15

32TPart VI – Contingency Procedures32T ............................................................................................................ 16 32TDeclaration of Severity 1 Contingency Situations32T .................................................................................. 16 32TSeverity 1 Contingency Situation Emergency Conference Call Meeting(s)32T .......................................... 16 32TResponsibilities of the Direct Clearer Declaring a Severity 1 Contingency Situation32T ............................ 16 32TDeclaration of Severity 2 Contingency Situation32T.................................................................................... 16 32TSeverity 2 Contingency Situation Emergency Conference Call Meeting(s)32T .......................................... 16 32TResponsibilities of Direct Clearers during a Severity 2 Contingency Situation32T ..................................... 17 32TResponsibilities of the CPA during a Severity 2 Contingency Situation32T ................................................ 17 32TResponsibilities of Direct Clearers Relating to Exchange of AFT Files32T ................................................. 17 32TResponsibilities of Indirect Clearers Relating to Exchange of AFT Files32T .............................................. 17 32TDisaster Recovery Site32T .......................................................................................................................... 17 32TIncident Reports32T ..................................................................................................................................... 17

32TPart VII – Identification Modification Advice Procedures32T ........................................................................... 18 32TIdentification Modification Advice32T ........................................................................................................... 18 32TParticipants32T ............................................................................................................................................ 18 32TNotification of IMA Participation32T ............................................................................................................. 18 32TObligation of the Participating Member Originating an IMA and Inaccurate IMAs32T ................................ 18 32TObligation of the Participating Member Processing an IMA and Rejected Files and Transactions 32T ...... 19 32TIMA Message Identification Numbers32T .................................................................................................... 19 32TForwarding of IMAs32T ................................................................................................................................ 19 32TRecord Retention32T ................................................................................................................................... 19 32TTracing Facilities32T .................................................................................................................................... 19 32TAPPENDIX I: ISO AFT Exchange Participation Notification Form 32T ........................................................ 20 32TAPPENDIX II: Remittance Information Removal Notification Form32T ................................................ 21 32TAPPENDIX III: ISO AFT Sample Trace Request Form32T ...................................................................... 22 32TAPPENDIX IV: ISO AFT Sample Reimbursement Claim Request Form32T ......................................... 23 32TAPPENDIX V: Summary of ISO AFT Data Delivered32T ............................................................................ 25 32TAPPENDIX VI: Payments Canada Service Desk Contact Information32T .................................................. 26 32TAPPENDIX VII: Procedures for the Maintenance of AFT Transaction Codes32T ....................................... 27

Rule F4 Page 1


Introduction

This Rule governs the Exchange of Automated Funds Transfer (AFT) Transactions through the use of the ISO Usage Guidelines available on the CPA website between Canadian financial institutions that are Participating Members, for the purposes of Clearing and Settlement. It includes general rules relating to the Exchange of ISO AFT Files, procedures applicable to the processing of ISO AFT Transactions, as well as the Settlement of obligations arising from the Exchange and Clearing of ISO AFT Debits and Credits Transactions between Participating Members. It also contains procedures applicable to exception processing, problem resolution, contingency situations, and escalation procedures in the ISO 20022 AFT environment. Nothing in this Rule is intended to impede or restrict any Member from complying with applicable legislation. Such legislation may include the Personal Information Protection and Electronic Documents Act, SC 2000, c 5, or the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, SC 2000, c 17. References to Eastern Time (ET) in this Rule are to be understood as either Eastern Standard Time or Eastern Daylight Time, depending on the time in Ottawa. Scope

This Rule applies to all Canadian and US dollar ISO AFT Transactions as defined within the ISO AFT Usage Guidelines, subject to the exceptions outlined in Rule K8. For rules and procedures applicable to AFT Transactions issued in accordance with CPA Standard 005, refer to Rule F1. General - Reference

This Rule shall be read in conjunction with the following Rules, Standards and guidelines:

(a) Introduction to the Rules Manual;

(b) Rule A4;

(c) Rule F7;

(d) Rule F8;

(e) Rule K5;

(f) Rule K8;

(g) Rule H1;

(h) Rule H3;

(i) Rule G12;

(j) CPA Standard 007;

(k) CPA Standard 018; and

(l) The ISO AFT Usage Guidelines.

Rule F4 Page 2


Definitions

In this Rule, “AFT” means Automated Funds Transfer by electronic media and in accordance with CPA Standard 005 and the ISO AFT Usage Guidelines; “AFT Exchange Point” means the electronic site from which a Direct Clearer delivers and receives AFT Files;

“AFT File” means a file containing one or more AFT Transactions issued in accordance with the ISO AFT Usage Guidelines; “AFT Initial File Edit” means the process of validating an exchanged AFT File; “AFT Transaction” means a Payment Item exchanged in an AFT File as defined in the ISO AFT Usage Guidelines; “CPA Services Network (CSN)” means the CPA managed network that is used by CSN Participants to transmit certain electronic Payment Items, and which may be used to transmit proprietary files on a bilateral basis, as agreed to by the parties and with the consent of the CPA; “Creditor” means a Payee of an ISO AFT Transaction; “Debtor” means a Payor of an ISO AFT Transaction; “Due Date” means the date indicated by the Payment Originator of the transaction on which AFT Transaction funds are to be credited to a Creditor’s account, in case of an ISO AFT Credit Transaction, or debited from a Debtor’s account, in case of an ISO AFT Debit Transaction. “Exchange Deadline” means the point in time at the end of an Exchange Period. For example, where the Exchange Period is between 09:30:01 ET and 16:30:00 ET, the Exchange Deadline is 16:30:00 ET; “Exchange Period” means a period of time defined in this Rule in which an AFT File may be Exchanged between an Originating and a Processing Direct Clearer. “Extended Remittance Information” means any detail provided in an ISO AFT Debit Transaction or an ISO AFT Credit Transaction in the following elements (including their respective sub-elements) as defined in the ISO AFT Usage Guidelines, Parts A and B:

(i) Ultimate Debtor;

(ii) Ultimate Creditor;

(iii) Initiating Party;

(iv) Related Remittance Information; or

(v) Structured Remittance Information;

“IC Cut-off” means, in relation to an ISO AFT Credit Transaction, the point in time 2 hours following the end of the Exchange Period in which the AFT File containing the transaction was Exchanged. For example, where the Exchange Period is between 09:30:01 ET and 16:30:00 ET, the IC Cut-off is 18:30:00 ET.

Rule F4 Page 3


“Identification Modification Advice (IMA)” means a non-financial transaction created by a Participating Member to allow the Originating Participating Member to inform a Payment Originator of a change to the payment routing information, including the Account Number; [Note this is equivalent to a Notice of Change (NOC) as defined in Rule F1]. “IMA Message” means a message containing one or more IMAs as outlined in the ISO AFT Usage Guidelines; “Instructed Agent” means the Participating Member that is instructed by the previous Member to carry out the payment instruction; “Instructing Agent” means the Participating Member instructing the next Member to carry out the payment Instruction; “ISO AFT Credit Transaction” means a credit Payment Item exchanged in an AFT File as defined in the ISO AFT Usage Guidelines, Part A; “ISO AFT Debit Transaction” means a Pre-authorized Debit Payment Item within the meaning of Rule H1 exchanged in an AFT File as defined in the ISO AFT Usage Guidelines, Part B; “ISO AFT File” means an AFT File containing one or more ISO AFT Transactions; “ISO AFT Message Types” means the structure of an ISO AFT File created in accordance with the ISO AFT Usage Guidelines; “ISO AFT Transaction” means an AFT Transaction as defined in the ISO AFT Usage Guidelines; “Originating Direct Clearer” means the Direct Clearer that delivers AFT Files to another Direct Clearer; “Originating Participating Member” means a Participating Member that originates an ISO AFT File or receives an ISO AFT File from a Payment Originator; “Participating Member” means any CPA Member that registers to participate in the Exchange of ISO AFT Transactions; “Payment Originator” means a business, association, government or other entity which, upon authorization from its Payee or Payor, initiates an AFT Transaction; “Payment Reversal Transaction” means an AFT Transaction used to correct an error made by the Payment Originator or the Originating Direct Clearer as defined in the ISO AFT Usage Guidelines, Part D. [Note: This is the CPA Standard 005 equivalent to an Error Correction Transaction]; “Processing Direct Clearer” means the Direct Clearer that receives AFT Transactions from an Originating Direct Clearer; “Rejected ISO AFT Transaction” means an ISO AFT Transaction which has not passed the Transaction Edit by the Processing Direct Clearer, and is delivered back to the Originating Direct Clearer in an AFT File as defined the ISO AFT Usage Guidelines, Part C; “Remittance Beneficiary” means the Debtor or Creditor to whom the Payment Originator is providing Remittance Information; “Remittance Information” means all detail provided within the Extended Remittance Information and the Unstructured Remittance Information elements in an ISO AFT Debit Transaction or an ISO AFT Credit Transaction;

Rule F4 Page 4


“Returned ISO AFT Transaction” means an ISO AFT Transaction which is unpostable, dishonoured or refused by the Payor or Payee at the Branch of account and is delivered back to the Participating Member that initiated the original AFT Transaction in an AFT File as defined in the ISO AFT Usage Guidelines; "Return Reason Code” means a three (3) digit code, as assigned by the CPA and defined in CPA Standard 007, which is used by the Processing Direct Clearer or Indirect Clearer to identify the reason for the return of the payment to the Payee/Payor; “Serviceability Code” means a code representing the number of Business Days required to credit a Payee’s account with an AFT Credit Transaction on the date those funds are to be made available; “Summary of ISO AFT Data Delivered” means a summary substantially in the form of Appendix V, listing the total number and dollar amount of the AFT Transactions contained in an ISO AFT File; “Trace Request” means a request by the Originating Direct Clearer for the trace of an AFT Transaction which has been delivered to a Processing Direct Clearer; “Transaction Code” means a three (3) digit code, as assigned by the CPA and defined in CPA Standard 007, which is used by the Payment Originator to identify the type of payment, and by the Processing Direct Clearer or Indirect Clearer to further identify the payment to the Payee/Payor; “Transaction Edit” means the process of validating individual AFT Transactions contained on an exchanged AFT File in accordance with CPA Standard 005, the ISO AFT Usage Guidelines and the Financial Institution File (FIF); “Unstructured Remittance Information” means the information contained within the Unstructured Remittance Element as defined in the ISO AFT Usage Guidelines, Parts A and B; “Universal Resource Locator (URL)” means a unique address for an object on the internet, containing a “protocol” (e.g. http, https, ftp, ldap, mailto, etc.) and an address that identifies the location of something (e.g. a domain and path to a file such as “xyz.com/index.htm”, an email address, a telephone number, etc.). A domain name (e.g. “example.com”) by itself is not a URL. “Warehoused AFT Transactions” means those AFT Transactions held by a Direct Clearer for future processing.

Rule F4 Page 5


Part I – General Requirements

Participation

1. Subject to sections 2 and 3, each Direct Clearer shall participate in the Exchange of AFT Files via the CSN.

Registration for the Exchange of ISO AFT Transactions

2. (a) Each Member that elects to participate in the Exchange of ISO AFT Transactions shall register by providing notice in the form of Appendix I to the CPA, at least 180 days in advance of their first intended Exchange.

(b) Registration with the CPA constitutes notice that the Member will:

(i) develop the capability to deliver and receive all ISO AFT Messages Types as defined in the ISO AFT Usage Guidelines, by the date of their first Exchange; and

(ii) Employ security controls to protect the integrity, privacy and confidentiality of ISO AFT Transaction content, including any personal or otherwise sensitive information, in accordance with Standard 018 – Payment Item Information Security Standard;

Note: For further clarity, the requirement to develop the capability to deliver and receive all ISO AFT Message Types does not obligate Members to initiate any ISO AFT Transaction(s) or restrict the right and discretion of an Originating Participating Member to decline acceptance or inclusion of any content, from its Payment Originator, that is intended to form Remittance Information.

(c) Prior to the Exchange of ISO AFT Files, the Participating Member shall ensure successful completion of a test of its ISO AFT Message Types using tools and criteria as set out by the CPA in its on-boarding process.

(d) Each Participating Member shall receive all ISO AFT Message Types destined for all of its Branches and any Financial Institution for which it is a Clearing Agent.

(e) Each Originating Participating Member shall be responsible and liable for any direct loss, costs or

damages incurred by other Participating Members or the CPA as a result of every ISO AFT Credit Transaction, and every Payment Item purporting to be an ISO AFT Credit Transaction, that it exchanges for the purpose of Clearing and Settlement. Each Originating Participating Member shall indemnify the CPA and its Members for any direct loss, costs or damages caused by the Originating Participating Member’s failure to comply with this Rule. In no event is an Originating Participating Member responsible for any indirect, consequential, special, aggravated, punitive or exemplary damages, including lost profits, regardless of the cause of action.

Additional Requirements for Direct Clearer Participation

3. Direct Clearers registering to participate in accordance with Section 2 shall:

(a) deliver and receive ISO AFT Files at a minimum of one AFT Exchange Point (i.e., 10 – Montreal, 20 – Toronto, 90 – Calgary and 00 – Vancouver) and provide notice of which it will use to the CPA;

(b) provide the Association with its Account Number Formats and Validation Criteria (for all Canadian and U.S. dollar accounts domiciled in Canada) for reproduction in the CPA’s “List of Account Number Formats and Validation Criteria”;

Rule F4 Page 6


(c) submit a request for change, as necessary, to the CPA in accordance with the procedures outlined in the CSN Service Level Description (SLD); and

(d) ensure bilateral testing has been successfully completed with at least two Participating Direct

Clearers. At a minimum, such testing shall include the following: file creation, file transmission, forward presentment of ISO AFT Debit and Credit Transactions, returns and reversals of such debits and credits, re-presentment of returned debits, notices of change (IMA Message Type) and end of day reporting. The CPA shall be notified of the successful completion of the bilateral testing by each Participating Direct Clearer. Note: Bilateral testing may take place with only one testing partner where there are only two Participating Direct Clearers.

Additional Requirements for Indirect Clearer Participation

4. An Indirect Clearer shall not provide notice of intent to participate in the Exchange of ISO AFT Files, unless its Clearing Agent is already a Participating Member.

Prohibited Content

5. Each Participating Member that exchanges an ISO AFT Transaction for a Payment Originator will prescribe terms and conditions prohibiting the Payment Originator from including any harmful content in the ISO AFT Transaction. For greater certainty, harmful content includes anything that: (a) is illegal, relates to illegal activities, or the inclusion or transmission of which is otherwise in

contravention of applicable law;

(b) is the personal information of an individual, unless such inclusion has been appropriately consented to by that individual, in accordance with applicable law, including personal information protection legislation; or

(c) the receipt or use of which may cause harm to the Remittance Beneficiary or any CPA Member

that transmits or processes the ISO AFT Transaction (examples of content that may cause harm include malicious code and deceptive or malicious URLs).

For further certainty, the foregoing list is not exhaustive. Each Participating Member may describe and prohibit such additional harmful content as it deems appropriate.

Changes to an AFT Exchange Point 6. (a) A Direct Clearer may cease to accept ISO AFT Files at any AFT Exchange Point by providing

180 days’ written notice to the CPA, provided they continue to Exchange through a minimum of one AFT Exchange Point. The CPA shall give notice to all other Direct Clearers. Withdrawal from an AFT Exchange Point with less than 180 days’ notice requires the unanimous consent of all Direct Clearers.

(b) Where a Direct Clearer wishes to add an additional Exchange Point, it shall provide the CPA with

at least 90 days’ notice in advance of the effective date of the addition.

Rule F4 Page 7


Part II – Exchange & Processing Procedures

AFT File Layout

7. The content and structure of an ISO AFT File shall be in accordance with the ISO AFT Usage Guidelines.

8. No ISO AFT Transaction shall include a URL unless the URL is contained in the Related Remittance Information Element as defined in the ISO AFT Usage Guidelines, Parts A and B.

Exchange Deadlines and Periods

9. An AFT File may be Exchanged within the following Exchange Periods, as organized by the applicable Exchange Deadline (in ET):

Exchange Deadline (Business Days only) Exchange Period

09:30:00 hours 21:00:01 – 09:30:00 hours


16:30:00 hours 09:30:01 – 16:30:00 hours 21:00:00 hours 16:30:01 – 21:00:00 hours

Serviceability Code Assignment 10. Each Direct Clearer shall designate on the Financial Institutions File a Serviceability Code of:

(a) “0” for each of its destination Branches; and

(b) Either “0”, “1”, or “2” for each destination Branch of a Financial Institution for which it acts as a

Clearing Agent. Credit Transaction Lead Times & Exchange 11. Each Originating Direct Clearer shall Exchange AFT Credit Transactions, where available, on or

before the Due Date, in accordance with the lead time requirement and Serviceability Code of the destination Branch. Serviceability Codes and associated lead times are as follows:

(a) Serviceability Code “0” – Credit Transactions shall be Exchanged on the earlier of (i) the

Business Day prior to the Due Date, where the Credit Transactions are available for Exchange; or (ii) the Due Date;

(b) Serviceability Code “1” – Credit Transactions shall be Exchanged one Business Day before the

Due Date; and (c) Serviceability Code “2” – Credit Transactions shall be Exchanged two Business Days before the

Due Date.

Credit Transaction Funds Availability

12. Where a Credit Transaction is received by a Creditor’s FI in accordance with sections 11 and 18, that Processing Direct Clearer or Indirect Clearer shall, unless precluded by a prior restriction placed on the Creditor’s account, be responsible for ensuring the funds are available for withdrawal or other use in accordance with the terms of agreement (for example, an account agreement) between the Creditor’s FI and the Creditor within the following timeframes:

Rule F4 Page 8


(a) Subject to subsections (c) and (d), below, where the destination branch is a Serviceability Code “0”, funds shall be made available within 2 hours of the Exchange Deadline by which the transaction was received;

(b) Where the destination branch is a Serviceability Code “1” or “2”, funds shall be made available by the opening of business on the Due Date of the transaction;

(c) Subject to subsection (d), below, where the destination branch is an Indirect Clearer with a Serviceability Code “0”, funds shall be made available within 2 hours of the IC Cut-off by which the transaction was received by the Indirect Clearer.

(d) (i) Where a Credit Transaction is received the Business Day prior to the Due Date, funds shall be made available by the opening of business on the Due Date. (ii) Where a Credit Transaction is destined to an account other than a demand deposit account, the transaction may be treated as though destined to a Serviceability Code “1” branch. (iii) Where a Credit Transaction destined to a Serviceability Code “0” branch is Exchanged on or before October 14, 2018, the transaction may be treated as though destined to a Serviceability Code “1” branch.

Debit Transaction Exchange Dates

13. No Originating Direct Clearer shall deliver an ISO AFT Debit Transaction to a Processing Direct Clearer prior to the Due Date.

Transmission Requirements

14. (a) An Originating Direct Clearer shall make reasonable efforts to transmit AFT Files with sufficient time to allow the Processing Direct Clearer to receive the file prior to the applicable Exchange Deadline.

(b) A Summary of ISO AFT Data Delivered, substantially in the Form Appendix V, shall be sent to the

Processing Direct Clearer concurrent with the Exchange of the associated AFT File.

AFT File Receipt

15. (a) An AFT File is considered delivered in the Exchange Period in which the Processing Direct Clearer receives the file, regardless of whether transmission was initiated in a previous Exchange Period.

(b) Where a Processing Direct Clearer does not receive an AFT File from an Originating Direct Clearer in an Exchange Period, the Processing Direct Clearer shall, on a best efforts basis, give notice to the Originating Direct Clearer of non-receipt or late receipt as soon as possible and no later than one hour after the applicable the Exchange Deadline.

AFT Initial File Edit and Rejected Files

16. (a) The Processing Direct Clearer shall perform an initial edit check on each ISO AFT File received, in accordance with Standards 017, and if unable to process the ISO AFT File, shall give notice to the Originating Direct Clearer as soon as possible and no later than one hour following receipt, by indicating the Message Identification Number(s), the Creation Date and Time(s), and the reason for rejecting the ISO AFT File.

Rule F4 Page 9


(b) If the Originating Direct Clearer is unable to resend an AFT File rejected under subsection (a) in the same Exchange Period, the Originating Direct Clearer may resend the file in a subsequent Exchange Period.

17. A Participating Member may reject an ISO AFT Transaction containing a URL located in an element

other than the Related Remittance Information Element, as defined in the ISO AFT Usage Guidelines, Parts A and B.

Delivery of AFT Files to Indirect Clearers

18. A Processing Direct Clearer acting for an Indirect Clearer with branch(es) bearing Serviceability Code “0” shall deliver, at a minimum, all ISO AFT Credit Transactions destined for that Indirect Clearer’s Serviceability Code “0” branch(es) no later than the IC Cut-off applicable to the ISO AFT Credit Transactions.

Notes: For further certainty, nothing in this rule prevents a Processing Direct Clearer and an Indirect

Clearer from establishing a mutually agreed upon time for the delivery of transactions that is earlier than the IC Cut-off. This section 18 shall enter into effect on October 15, 2018.

Transaction Edit, Account Validation and Rejected Transactions

19. (a) ISO AFT Transactions failing to pass the Transaction Edit shall be rejected and delivered back to the Originating Direct Clearer in an ISO AFT File no later than the Business Day following editing of the original ISO AFT File. The total number of Rejected Transactions due on each Settlement date shall be included with the appropriate totals in the Summary of ISO AFT Data Delivered.

(b) (i) Each Direct Clearer shall submit additions or revisions to validation routines and account number formats to the CPA 180 days prior to the effective date. The CPA shall circulate this information as received to Direct Clearers on behalf of the submitting Direct Clearer.

(ii) A Processing Direct Clearer may not reject ISO AFT Transactions destined to an Indirect

Clearer for which it acts as Clearing Agent for reason of invalid account number, where the Clearing Agent has not made available the Indirect Clearer’s account number formats and validation routines for publication in the CPA’s “List of Account Number Formats and Validation Criteria” in accordance with subsection (i), above.

(c) (i) Rejected ISO AFT Transactions, bearing a 900 Return Reason Code and the appropriate

invalid data element(s), shall be delivered back to the Originating Direct Clearer in accordance with the ISO AFT Usage Guidelines, Part C.

(ii) Where an ISO AFT File contains 50 or more Rejected Transactions, the Processing

Direct Clearer shall immediately notify the Originating Direct Clearer. (d) (i) Credit Transactions with a Due Date more than 30 calendar days prior to the file creation

date shall be rejected. (ii) Debit Transactions with a Due Date more than 173 days prior to the creation date and

time element of the ISO AFT File may be rejected.

Resubmission of Rejected Transactions

20. If an ISO AFT Transaction has been rejected by a Processing Direct Clearer, it may only be resubmitted by the Originating Direct Clearer as a new Transaction.

Rule F4 Page 10


Prohibition against Amalgamation

21. Each ISO AFT Transaction received by a Processing Direct Clearer shall be handled individually and shall not be amalgamated with any other AFT Transaction.

Remittance Information

22. (a) Subject to subsection (b), no Participating Member that receives Remittance Information contained in an ISO AFT Transaction from another Participating Member shall remove or alter the Remittance Information.

(b) Where a Participating Member reasonably believes that the Remittance Information in an ISO AFT Transaction contains content the receipt or use of which poses a real risk of immediate and significant harm to the recipient, it may remove or withhold the Remittance Information provided that it:

(i) passes along the ISO AFT Transaction to the next Instructed Agent in furtherance of posting

or posts the transaction to the account of the Remittance Beneficiary, as applicable; and (ii) promptly provides notice, substantially in the form of Appendix II, to the next Instructed Agent

or Remittance Beneficiary, as applicable, of the removal or withholding of the Remittance Information unless otherwise required by applicable law.

(c) Where a Participating Member receives a Notification of Removal, it shall, as applicable, promptly

pass the notification to the Participating Member holding the account of the Remittance Beneficiary or, where it is the holder of the account, provide the details of the Remittance Information removal or withholding to the Remittance Beneficiary.

Note: For further clarity, no Participating Member is required by subsection (b) to scan or otherwise examine the Remittance Information contained in any ISO AFT Transaction received from another Participating Member, or to remove or withhold any such Remittance Information. Nothing in this section detracts from the responsibility and liability obligations of an Originating Participating Member as established in subsection 2(e) of this Rule, or of a Member that Exchanges a PAD as established in section 6 of Rule H1. For procedures addressing circumstances in which an ISO AFT File or one or more ISO AFT Transactions does not pass the initial edits or cannot be posted, see sections 16, 17, 19 and 29.

23. The obligations set out in section 22 do not apply to transactions destined to a Financial Institution

that has not registered pursuant to section 2.

24. Subject to subsection 22(b), a Remittance Beneficiary’s Participating Member shall provide or make available all Unstructured Remittance Information to the Remittance Beneficiary as soon as possible and no later than the Business Day following the date funds are debited from or credited to the Remittance Beneficiary’s account.

25. (a) Subject to subsection 22(b), a Participating Member shall provide or make available the Extended

Remittance Information to the Remittance Beneficiary, in accordance with an agreement between those parties, where requested in advance of the item being debited from or credited to the Remittance Beneficiary’s account.

(b) Extended Remittance Information requested in accordance with subsection (a) shall be provided

or made available as soon as possible and no later than the Business Day following the date the Remittance Beneficiary’s account was debited or credited unless otherwise requested by the Remittance Beneficiary and agreed to by the Participating Member.

Rule F4 Page 11


(c) The Participating Member shall provide or make available the Extended Remittance Information, in accordance with its internal tracing procedures, where requested by the Remittance Beneficiary within 90 days of the date the item was debited from or credited to the Remittance Beneficiary’s account.

Part III – Returns & Exception Processing

Time Limitation for Return

26. Subject to sections 27 and 28, where a Financial Institution is returning an ISO AFT Debit Transaction or ISO AFT Credit Transaction, it shall return the transaction no later than the Business Day following receipt by the first organizational unit that is able to make or act upon a decision to dishonour or refuse an Item.

Exceptions to Time Limitation: Debtor/Creditor Initiated Returns

27. Each ISO AFT Debit Transaction being returned due to a Debtor’s claim for reimbursement shall be returned in accordance with the time limitation set out in Rule H1.

28. An ISO AFT Credit Transaction may be refused by a Creditor up to and including 90 days after the

date on which the transaction was processed to the Creditor’s account. Credit Transactions being refused after this time shall be addressed outside of the Clearing.

Unposted/Dishonoured Transactions/Transactions Refused by Payor/Payee

29. ISO AFT Transactions issued in accordance with the ISO AFT Usage Guidelines, Parts A, B and C, that are accepted in the AFT Initial File Edit by the Processing Direct Clearer and subsequently unposted, dishonoured or refused by a Debtor or a Creditor shall be returned using the applicable Return Reason Code indicated in Standard 007.

30. A Returned ISO AFT Transaction, as defined in the ISO AFT Usage Guidelines, Part C, accepted in

the AFT Initial File Edit shall not be returned for the purpose of Clearing and Settlement. It shall be treated as an Item in Dispute. (Refer to Rule A6.)

Re-presentment and Rejected Returned ISO Transactions

31. An ISO AFT Debit Transaction which has been returned for the reason “Non-Sufficient Funds” (Return Reason Code 901), or “Funds Not Cleared” (Return Reason Code908), may be re-presented on a one-time only basis. The Payment Originator may re-present an Item within 30 days following the return of the original Debit Transaction. In addition, a Pre-Authorized Debit shall only be re-presented for the same amount as the original Pre-Authorized Debit (i.e. shall not include additional charges). If the ISO AFT Debit Transaction is dishonoured a second time, it shall not be re-presented by the Originating Participating Member.

32. Notwithstanding section 31, a Processing Direct Clearer shall not resubmit a Returned ISO AFT

Transaction that has been rejected by the Originating Direct Clearer.

Re-Routing of Transactions

33. Where a Participating Member undertakes the re-routing of an ISO AFT Debit Transaction or an ISO AFT Credit Transaction, any liability resulting directly from the re-routing shall be borne by that Financial Institution.

Rule F4 Page 12


34. Where a Participating Member has elected to re-route an ISO AFT Debit Transaction or an ISO AFT Credit Transaction and wishes to advise the Payment Originator of corrections to Branch account information, the re-routing Financial Institution shall deliver an Identification Modification Advice (IMA), as defined in the ISO AFT Usage Guidelines, Part E.

Reimbursement Claim

35. Where a Reimbursement Claim is required for the return of an ISO AFT Debit Transaction (refer to Rule H1), the Payor’s FI shall retain the Reimbursement Claim for a minimum period of twelve (12) months from the date the Item was returned.

36. In the event that a copy of the Reimbursement Claim is required, the following procedures shall apply:

(a) The Originating Direct Clearer shall submit a Reimbursement Claim Request Form (sample provided in Appendix III) to the Processing Direct Clearer (refer to the AFT Master Contact List) prior to the expiration of the twelve (12) month retention timeframe.

(b) Where the Debtor’s FI is an Indirect Clearer, the Processing Direct Clearer shall forward the

completed Reimbursement Claim Request Form to that Indirect Clearer as soon as possible but no later than the next Business Day.

(c) The Debtor’s FI shall fulfill the request within 30 days of receipt by:

i) providing a copy of the Reimbursement Claim to the requestor; or ii) if unable to do so, by reimbursing the amount of the claim, according to the instructions

provided in the Reimbursement Claim Request Form.

Accuracy and Delivery of Returned Transactions

37. A Direct Clearer initiating a Returned ISO AFT Transaction is responsible for ensuring the accuracy of every Returned ISO AFT Transaction it delivers to another Direct Clearer. Where an incorrect debit Returned ISO AFT Transaction is delivered, the Direct Clearer that initiated the Transaction shall reimburse the receiving Direct Clearer for the value equal to the inaccurate Returned ISO AFT Transaction and any service or interest charges incurred.

Payment Reversal Transactions

38. Payment Reversal Transactions (as defined in the ISO AFT Usage Guidelines) may only be originated to reverse an AFT transaction for the following reasons:

(a) Duplicate payment;

(b) Incorrect amount in original payment;

(c) Incorrect account number;

(d) Canceled PAD agreement; and

(e) Transaction not in accordance with PAD agreement.

39. Returned ISO AFT Transactions (as defined in the ISO AFT Usage Guidelines, Part C) are not eligible for reversal using a Payment Reversal Transaction.

Rule F4 Page 13


40. Payment Reversal Transactions shall not be originated to protect a Member from an insolvent Payment Originator.

41. An Error Correction Transaction shall not be rejected for the reason that the original transaction,

where received in the same Exchange Period, has not yet been processed.

Time Frames for Payment Reversal 42. (a) Delivery of Payment Reversal Transactions shall be made no earlier than the exchange of the

original ISO AFT Debit Transaction or ISO AFT Credit Transaction, and no later than three (3) Business Days following the Settlement date.

Time Limit for Refusal of an ISO AFT Payment Reversal Transaction

43. A customer may refuse a Payment Reversal Transaction as defined in the ISO AFT Usage Guidelines, Part D, provided that it does so within 90 days subsequent to the posting date. The Payment Reversal Transaction shall be returned using Return Reason Code 915 for debits or 922 for credits in accordance with Standard 007.

Rejected Payment Reversal Transactions

44. An Originating Direct Clearer shall not resubmit a Payment Reversal Transaction that has been rejected by the Processing Direct Clearer.

Rule F4 Page 14


Part IV – Retention & Tracing

Message Identification Numbers Records

45. Each ISO AFT Message Type delivered by the Originating Direct Clearer to the Processing Direct Clearer shall bear a Message Identification number unique to that Processing Direct Clearer. Message Identification Numbers shall not be repeated within a twelve-month period. Each new Message Identification number shall be numbered in sequence, increasing by increments of one (i.e., [previous message identification number] +1).

Tracing

46. All Direct Clearers shall adhere to the record retention requirements outlined in Rule B10, section 15.

Trace Requests, Tracing Limits and Tracing Procedures

47. (a) A Trace Request (refer to Appendix III) shall be initiated by the Originating Direct Clearer to the Processing Direct Clearer at the AFT Exchange Point subject to Regional Clearing Association

arrangements. The Originating Direct Clearer shall not be obliged to respond to an enquiry from a customer of a Processing Direct Clearer.

(b) A Processing Direct Clearer shall not be obliged to respond to any Trace Requests received more

than 12 months after the Settlement date of the ISO AFT Transaction. (c) A Processing Direct Clearer shall not be obliged to respond to any Trace Requests regarding an

ISO AFT Transaction of less than $20.00. (d) At the option of the Processing Direct Clearer, a Trace Request may be accepted by telephone.

Adequate records of telephone requests shall be kept by the Processing Direct Clearer. (e) The Processing Direct Clearer shall determine the disposition of the ISO AFT Transaction and

shall advise the Originating Direct Clearer of the status and of any action taken, as follows:

(i) within two (2) Business Days of the date of receipt of the request, for Trace Requests with Settlement dates of up to 30 days; or

(ii) within five (5) Business Days of the date of the receipt of the request, for Trace Requests

with Settlement dates of greater than 30 days. Part V – Settlement Procedures

Settlement

48. (a) Each Direct Clearer shall maintain a summary of ISO AFT Debit Transactions and ISO AFT Credit Transactions, by ISO AFT File, and by Due Date for all ISO AFT Transactions Exchanged for a period of one year.

(b) No Settlement shall be made for obligations arising from any transactions contained in a rejected

ISO AFT File. (c) Settlement must be effected for obligations arising from the Exchange and Clearing of Rejected

ISO AFT Transactions.

Rule F4 Page 15


(d) The Settlement date shall be the Business Day following the Due Date or the Business Day following the date of Exchange for ISO AFT Transactions delivered after the Due Date.

(e) Where applicable, the rules and regulations of the Regional Clearing Association for the handling

of Clearing Logs and settling of balances shall apply.

ACSS Entries

49. (a) Each Processing Direct Clearer shall initiate, in the National Electronic Settlement Region and using stream identifier “AFTC”, a debit entry against each of the other Direct Clearers from which it has received credit transactions (i.e., ISO AFT Credit Transactions, Payment Reversals for ISO AFT Debit Transactions, and returned ISO AFT Credit Transactions) for Settlement in accordance with subsection 47(d). Each debit entry shall specify the total volume and value of ISO AFT Transactions received from the Direct Clearer being debited. Such debit entry shall be made by 05:00 ET on the Settlement date, except where the Settlement date is a Business Day following a Regional or Civic Holiday, in which case entries may be made up to 09:30 ET on that day.

(b) Each Originating Direct Clearer shall initiate, in the National Electronic Settlement Region and using stream identifier “AFTD”, a debit entry against each of the other Direct Clearers from which it has delivered Debit Transactions (i.e., ISO AFT Debit Transactions, Payment Reversals for ISO AFT Credit Transactions, and returned ISO AFT Debit Transactions). Each debit entry shall specify the total volume and value of ISO AFT Transactions delivered to each Direct Clearer being debited. Such debit entry shall be made by 05:00 ET on the Settlement date, except where the Settlement date is a Business Day following a Regional or Civic Holiday, in which case entries may be made up to 09:30 ET on that day.

Default

50. In the event of a Default, AFT Transactions shall be returned or rejected in accordance with the procedures outlined in Rules L1 (for Default of a Direct Clearer) or L2 (for Default of an Indirect Clearer).

Rule F4 Page 16


Part VI – Contingency Procedures

Declaration of Severity 1 Contingency Situations

51. Each Direct Clearer shall declare a “Severity 1 Contingency Situation” when it:

(a) cannot process AFT Files;

(b) cannot send or receive AFT Files;

(c) cannot make funds available, in accordance with section 12, to the Payee’s account for Credit Transactions; or

(d) has encountered an internal incident that is likely to impact more than one other Direct Clearer.

In the event of a “Severity 1 Contingency Situation”, the Direct Clearer declaring the Contingency Situation shall immediately give notice to the CPA by contacting the Service Desk (see Appendix VI of this Rule).


52. Upon the CPA receiving notice of the Severity 1 Contingency Situation, it shall advise the AFT representatives of each Direct Clearer and such other persons or entities considered appropriate. Emergency conference call meetings shall be arranged as deemed necessary by the CPA in consultation with the AFT representatives.

Responsibilities of the Direct Clearer Declaring a Severity 1 Contingency Situation

53. During each emergency conference call meeting or as otherwise requested by the CPA, the Direct Clearer declaring the Severity 1 Contingency Situation shall report on the Contingency Situation. This report shall include, at a minimum, the following information: (a) the nature of the Contingency Situation, anticipated recovery time, what systems or processes

are affected, and suggested schedule of update for communication; and (b) if possible, specific details on the cause of the Contingency Situation (e.g., hardware, software,

procedural or personnel), what additional Payment Items (if any) are affected, the customer impact (if any), and a summary of the procedures that are being conducted to resolve the Contingency Situation.

Declaration of Severity 2 Contingency Situation

54. “Severity 2 Contingency Situation” shall be declared if the CPA Services Network is not operational for all Direct Clearers (in any situation other than a Force Majeure Situation).


55. Upon the CPA discovering or receiving notice of a potential Severity 2 Contingency Situation, it shall advise the AFT representatives of each Direct Clearer and such other persons or entities considered appropriate. The CPA, in consultation with the AFT representatives of each Direct Clearer, shall determine the nature and extent of the Contingency Situation and arrange conference call meetings as deemed necessary.

Rule F4 Page 17


Responsibilities of Direct Clearers during a Severity 2 Contingency Situation

56. In the event the CPA Services Network is not operational for Direct Clearers, Direct Clearers shall immediately give notice to the CPA of the Severity 2 Contingency Situation unless the CPA originally identified the Contingency Situation.

Responsibilities of the CPA during a Severity 2 Contingency Situation

57. In the event of a Severity 2 Contingency Situation, the CPA shall report on the Contingency Situation during each emergency conference call meeting. This report shall include, at a minimum, the following information:

(a) the nature of the Contingency Situation, anticipated recovery time, what systems or processes

are affected, likely time for resolution of the CPA Services Network problem and suggested schedule of update for communication; and

(b) if possible, specific details of the cause of the Contingency Situation (e.g., hardware, software,

procedural or personnel), what additional Payment Items (if any) are affected, and a summary of the procedures that are being conducted to resolve the Contingency Situation.

Responsibilities of Direct Clearers Relating to Exchange of AFT Files

58. In the event of a Severity 2 Contingency Situation, Direct Clearers shall delay pre-scheduled transmissions of AFT Files to each Direct Clearer until such time that the network becomes operational.

Responsibilities of Indirect Clearers Relating to Exchange of AFT Files 59. Where an Indirect Clearer with one or more Serviceability Code “0” branches experiences an

interruption in services and cannot make funds available to the Creditor’s account in accordance with section 12, it shall immediately give notice to the CPA by contacting the Service Desk (see Appendix III of this Rule).

Disaster Recovery Site

60. Each Direct Clearer shall have, and maintain, two separate and distinct sites (primary site and disaster recovery site) connected to the CPA Services Network at all times, for the transmission of AFT Files.

61. Each Direct Clearer shall test its disaster recovery site at least once per calendar year. The tests

shall be coordinated by the CPA on pre-determined dates. 62. The Originating Direct Clearer is prepared to recreate and resubmit an AFT File upon request from a

Processing Direct Clearer, provided that such a request is made within three business days of the AFT File Exchange.

Incident Reports

63. Each Direct Clearer that is required to report on a Severity 1 Contingency Situation in accordance with this Rule shall complete and forward an AFT Contingency Situation Incident Report Form to the CPA as soon as possible and no later than 10 Business Days of encountering a Severity 1 Contingency Situation (contact the CPA Service Desk to obtain report).

Rule F4 Page 18


Part VII – Identification Modification Advice Procedures

Identification Modification Advice 64. This Part outlines procedures for a Participating Member to issue an Identification Modification Advice

(IMA) to a Payment Originator via the Originating Participating Member, using an automated method.

(a) The procedures outlined below shall be applicable to all changes to payment routing information affecting Canadian and U.S. dollar accounts. IMA transactions are zero-dollar transactions.

(b) The procedures outlined shall be applicable to ISO IMA Transactions as defined in the ISO AFT

Usage Guidelines, Part E.

Participants 65. (a) It shall be mandatory for Participating Members to receive IMAs.

(b) A Participating Member that elects to use an IMA to notify other Participating Member of changes to payment routing information shall register with the CPA as an IMA participant, in accordance with section 67 below.

Notification of IMA Participation 66. (a) Prior to delivering IMAs, a Participating Member shall advise the CPA at least 180 days in

advance of the implementation date.

(b) The CPA shall notify other participants that the Participating Member is prepared, as of its implementation date, to deliver IMA Files (subject to subsection 64(b)). The CPA shall notify Participating Member of all new registrations, including implementation dates, and the delivery frequency.

(c) IMA participants shall exchange and successfully process test files with a minimum of two other

participants prior to exchanging production files.

Obligation of the Participating Member Originating an IMA and Inaccurate IMAs 67. (a) The Participating Member originating an IMA shall be responsible for the accuracy of the IMA.

(b) A Summary of IMA Transactions Delivered form shall be provided by the Participating Member

originating the IMA. (c) The Participating Member originating the IMA shall be responsible for every IMA that it delivers

and shall be liable for the indemnification of the Association and its Members for any direct loss, costs or damages, incurred by them as a result of an IMA that it has delivered, except where such loss, costs or damages resulted from an error by the Participating Member processing the IMA.

(d) A Payment Item that is misdirected as a result of an inaccurate IMA, may be treated as an Item in

Dispute and dealt with in accordance with Rule A6. (e) The Participating Member originating the IMA shall ensure that IMAs for Canadian and US dollar

accounts are delivered in separate IMA message.

Rule F4 Page 19


Obligation of the Participating Member Processing an IMA and Rejected Files and Transactions 68. The Data Centre of the Participating Member processing an IMA shall edit each IMA message

received and, if unacceptable give notice to the Participating Member originating the IMA message that the IMA message is unacceptable, within three (3) Business Days after receipt, along with the reason for rejection.

69. Where an IMA transaction is rejected, the Participating Member processing the IMA shall give notice

of rejection to the Participating Member originating the IMA within five (5) Business Days after receipt of the original IMA File, along with the reason for rejection.

70. In the case of IMAs for Credit Transactions, where the IMA Participating Member forwards an IMA to

a Payment Originator, the IMA Processing Participating Member shall ensure the Payment Originator has been made aware of the importance of accepting and acting upon the IMA in relation to Credit Transactions similar to the importance of accepting and acting upon an IMA in relation to Debit Transactions as set out in Rule H1.

IMA Message Identification Numbers 71. Each IMA message delivered by the Participating Member originating the IMA to the Participating

Member processing the IMA shall bear a Message Identification Number unique to that processing Participating Member. That Message Identification Number cannot be repeated within a twelve-month period. Each new Message Identification Number shall be numbered sequentially (i.e., [previous Message Identification Number]+1). If the IMA Message Identification Number does not conform to the ISO AFT Usage Guidelines, the IMA message shall be rejected.

Forwarding of IMAs 72. The Participating Member processing the IMA shall forward the IMA to the Payment Originator within

seven (7) Business days of receipt of the IMA from the Participating Member originating the IMA.

Record Retention 73. The Participating Member originating the IMA shall have the ability to recreate the IMA message, for

a period of seven (7) Business days after delivery.

Tracing Facilities 74. Each Direct Clearer shall maintain adequate tracing facilities to ensure that all Participating Members

originating IMAs and all Participating Members processing IMAs are able to trace IMAs for a period of two years. Traces of IMAs shall not be initiated to determine whether an IMA has been acted upon.

Rule F4 Page 20


APPENDIX I: ISO AFT Exchange Participation Notification Form

Name of Financial Institution:

Institution Number:

This is to provide notice that the Financial Institutions named above hereby gives notice to the CPA of its intent to commence Exchange of ISO AFT Files with Exchange Partner(s) named below.

Name of Exchange Partner:

Institution Number:

Approximate Implementation Date:

Exchange Point:


Institution Number:


Exchange Point:


Institution Number:


Exchange Point:

Registration Form Completed by:

Name:

Phone:

Email:

Date:

Please return this form to:

Canadian Payments Association Suite 800, 350 Albert Street, Ottawa, K1R 1A4 – Fax: (613) 233-3385, Tel: (613) 238-4173

Email: [email protected]


Rule F4 Page 21


APPENDIX II: Remittance Information Removal Notification Form

CAD USD

TO: FROM:

THIS SECTION TO BE COMPLETED FROM INFORMATION SUPPLIED IN THE ORIGINAL TRANSACTION:

PAYMENT ORIGINATOR NAME OR ORGANIZATION IDENTIFICATION #:

AMOUNT:

GROUP MESSAGE NAME AND IDENTIFICATION NUMBER: INTERBANK SETTLEMENT DATE:

END TO END IDENTIFICATION #: DEBTOR AGENT ID:

TRANSACTION IDENTIFICATION #: ACCOUNT #:

NAME OF DEBTOR/CREDITOR

FIELD CONTENT REMOVED FROM: REASON FOR REMOVAL:

Comments:

Completed by:

Date:

Name of Previous/Next Agent Agent

TELEPHONE:

CONTACT NAME:

TELEPHONE:

FAX:

FAX:

EMAIL:

CONTACT NAME:

EMAIL:

Rule F4 Page 22


APPENDIX III: ISO AFT Sample Trace Request Form

CAD USD

TO: FROM:

THIS SECTION TO BE COMPLETED FROM INFORMATION SUPPLIED BY THE ORIGINATOR:

DEBTOR NAME OR ORGANIZATION IDENTIFICATION NUMBER: AMOUNT:

GROUP MESSAGE NAME AND IDENTIFICATION NUMBER: INTERBANK SETTLEMENT DATE:

END TO END IDENTIFICATION #: DEBTOR AGENT ID:

TRANSACTION IDENTIFICATION #: ACCOUNT #:

NAME OF DEBTOR/CREDITOR

THIS SECTION TO BE COMPLETED BY PROCESSING DIRECT CLEARER: POSTING DATE:

COMMENTS:

SIGNATURE:

DATE COMPLETED:

Name of Instructing Agent Name of Instructed Agent

FAX: CONTACT:

TELEPHONE:

FAX:

Rule F4 Page 23


APPENDIX IV: ISO AFT Sample Reimbursement Claim Request Form

AFT SAMPLE REIMBURSEMENT CLAIM REQUEST FORM

CAD USD TO: FROM: NAME OF INSTRUCTING AGENT ADDRESS: ADDRESS: CITY: CITY POSTAL CODE:

POSTAL CODE:

TEL. NO.: TEL. NO.: FAX. NO.: FAX. NO.: SIGNATURE: SIGNATURE: TRANSACTION DETAILS DEBTOR NAME: DEBTOR ACCOUNT NUMBER: RETURNED TRANSACTION IDENTIFICATION NUMBER:

ORIGINAL INTERBANK SETTLEMENT DATE:

MESSAGE CREATION DATE AND TIME: RETURN INTERBANK SETTLEMENT DATE: ORIGINAL END TO END IDENTIFICATION NUMBER:

RETURN REASON CODE:

AMOUNT: DEBTOR AGENT IDENTIFICATION NUMBER: REQUEST FORM COMPLETED BY:

DATE COMPLETED:

PLEASE PROVIDE SIGNED CLAIM FORM OR, WHERE NOT AVAILABLE, REIMBURSE THE AMOUNT OF THE CLAIM TO: ATTENTION: ADDRESS:

Rule F4 Page 24


CITY: PROVINCE: POSTAL CODE:

FAX. NO.:

Rule F4 Page 25


APPENDIX V: Summary of ISO AFT Data Delivered To: Direct Clearer B Processing Direct Clearer Data Centre Location, 99999

From: Direct Clearer A

Originating Direct Clearer Data Centre Location, 99999

PAYMENT DETAIL DEBIT CREDIT Date: Number of

Transactions (Due to Amount)

Number Transactions

(Due From Amount)

Message Name Identification: Pacs.008.001.04 Message Creation Date and Time: YYYY-MM-DDThh:mm:ss.sss June 23 99,999,999 $999,999,999.99 June 24 99,999,999 $999,999,999.99 … SUB TOTALS 99,999,999 $999,999,999.99 Message Name Identification: Pacs.003.001.04 Message Creation Date and Time: YYYY-MM-DDThh:mm:ss.sss June 23 99,999,999 $999,999,999.99 June 24 99,999,999 $999,999,999.99 … SUB TOTALS 99,999,999 $999,999,999.99 Message Name Identification: Pacs.007.001.04 Message Creation Date and Time: YYYY-MM-DDThh:mm:ss.sss June 23 99,999,999 $999,999,999.99 June 24 99,999,999 $999,999,999.99 99,999,999 $999,999,999.99 SUB TOTALS 99,999,999 $999,999,999.99 99,999,999

$999,999,999.99

Message Name Identification: Pacs.004.001.04 Message Creation Date and Time: YYYY-MM-DDThh:mm:ss.sss June 23 99,999,999 $999,999,999.99 99,999,999

$999,999,999.99

June 24 99,999,999 $999,999,999.99 SUB TOTALS 99,999,999 $999,999,999.99 99,999,999

$999,999,999.99

TOTALS 99,999,999 $999,999,999.99 99,999,999

$999,999,999.99

TOTAL REJECTS & RETURNS

99,999,999 $999,999,999.99 99,999,999

$999,999,999.99

Rule F4 Page 26


APPENDIX VI: Payments Canada Service Desk Contact Information

Hours of Availability Payments Canada Service Desk – (On hours support)

By phone or email from Sunday at 21:30 hrs to Friday at 21:30 hrs ET.

Payments Canada Service Desk – (Off hours support)

Monitored voicemail only from Friday at 21:30 hrs to Sunday at 21:30 hrs ET.

Telephone Number * 1-800-263-8863 Fax Number 1-613-688-1123 Email Address [email protected] * The telephone number is automatically re-routed to the alternate help desk in the event of a problem at the primary help desk.

Rule F4 Page 27


APPENDIX VII: Procedures for the Maintenance of AFT Transaction Codes Introduction 1. This Appendix outlines procedures that are required to add and modify Transaction and Return

Reason Codes in CPA Standard 007. Request for Transaction Codes 2. Requests for adding or modifying a Transaction or Return Reason Code shall be submitted to the

CPA by a Direct Clearer at least 90 days in advance of the proposed implementation date using the “AFT Transaction Code Application Form,” below.

Evaluation Criteria 3. Requests shall be evaluated by the E-Payments Working Group on the basis of potential volume

of transactions, potential percentage of total transactions exchanged bearing the modified or additional Code, applicability of the modified or additional Code to a broad cross-section of Debtor/Creditor, and other issues related to the benefit of the modified or additional Code as may be identified by the applicant.

Requests for new Codes for financial transactions that are restricted to a limited range of

Creditors or Debtors shall not be considered. Where a Code is deemed previously allocated at a generic level, the request for a new Code shall be denied with the recommendation that appropriate descriptive fields, such as originator long name, Debtor Name and sundry information, be utilized instead.

Notification of Approved Codes 4. Upon approval by the Board, Direct Clearers shall be notified of the addition or modification of a

Code and its effective date.

Rule F4 Page 28


Procedures for the Maintenance of AFT Transaction and Return Codes

Please return to:

Canadian Payments Association Payment Operations




RULE F7

AUTOMATED FUNDS TRANSFER SYSTEM FINANCIAL INSTITUTIONS FILE (FIF)





Rule F7 - Automated Funds Transfer System Financial Institutions File (FIF)

Implementation and Revisions Implemented January 22, 1996

Amendments Pre-November 2003 June 4, 2001 Amendments Post-November 2003 1. Amendment to reflect consistency with the new CPA Payment Items and ACSS By-law,

approved by the Board November 27, 2003, effective January 27, 2004. 2. Consequential amendments to Section 15 to clarify Member’s responsibilities upon acquisition

and amalgamation, approved by the Board March 26, 2009, effective May 25, 2009. 3. Housekeeping amendments approved by the Board October 3, 2013, effective December 2,

2013. 4. General review of Rule, approved by the Board June 18, 2015, effective August 17, 2015. 5. Amendments to reflect timing of new FIF versions, approved by the Board June 22, 2017,

effective September 17, 2018.

Rule F7 Page 1


Introduction 1. This Rule outlines the procedures applicable to the use of the Financial Institutions File (FIF) for

the Exchange of AFT Transactions. This Rule outlines the rights and responsibilities of Members in subscribing to the FIF system and how certain data on the FIF are to be used in facilitating the transfer of funds.

References to Eastern Time (ET) in this Rule are to be understood as either Eastern Standard Time or Eastern Daylight Time, depending on the time in Ottawa.

References 2. This Rule shall be read in conjunction with the FIF Subscribers’ Manual, the FIF User Manual and

the FIF Subscription Agreement. Proprietary Nature of FIF 3. (a) The CPA has exclusive property of the FIF and owns the intellectual property rights of the FIF. (b) In accordance with the FIF Subscription Agreement, every Member shall maintain the confidential

and proprietary nature of the FIF and related materials. Member Subscription 4. A Member wishing to subscribe to the FIF shall provide the following information to the CPA (as

outlined in the FIF Subscription Agreement and the FIF Output Requisition Form): (a) type of output required; (b) frequency of output; (c) output delivery methods; (d) point of contact for operational considerations and telephone number; and (e) point of contact and telephone number for invoicing purposes. Members as Sponsors 5. A Member sponsoring a non-Member for subscription to the FIF service shall enter into a signed

third-party agreement between the CPA, the Member (sponsor) and the institution it sponsors (subscriber). The subscription agreement form shall be available upon request from the CPA Service Desk.

Disclosure of Information 6. A Member shall abide by the clauses of the Subscription Agreement and the Subscribers’ Manual

as to disclosure of information in the FIF.

Rule F7 Page 2


Delivery of Output and Use of FIF 7. (a) The CPA shall deliver FIF output to FIF subscribers by mutually agreed means each Monday,

or where Monday is not a business day, on the immediately preceding business day. (b) New versions of the FIF shall become effective for the exchange of AFT Files following the

Friday 21:00 ET Exchange Deadline. Updates to the FIF 8. (a) All information on the FIF shall be considered current and valid. All changes to and notifications

concerning clearing arrangements shall carry a Thursday effective date. (b) Updates shall be delivered to the CPA at least seven (7) calendar days in advance of the FIF

Cycle Date. The deadline for submission of changes is Thursday before 12:00 pm ET. Changes received less than seven (7) calendar days prior to the FIF Cycle Date shall be included in the next available cycle. Users may submit changes to the CPA up to twenty-eight (28) calendar days prior to the appropriate FIF Cycle Date for the change. Changes received more than twenty-eight days in advance may be returned to the originators.

Indirect Clearer and Eligible Non-Member Change of Clearing Agent 9. Where an Indirect Clearer changes its Clearing Agent, the new Clearing Agent and the existing

Clearing Agent shall each provide at least one month notice of the change to the CPA. Subsequent changes to data in the FIF shall be submitted to the CPA in accordance with subsection 8(b) above. The CPA shall confirm the change with the existing Clearing Agent. Once changes have been applied by the CPA and the FIF has been updated, they are irrevocable except on a further minimum one month notification as described above.

Warehouse Transactions 10. The following procedures shall apply to each Direct Clearer where notice has been given of a

change of Clearing Agent relationship. This change may relate to a change at the Branch or institution level.

(a) subject to subsection (c), where not less than one month notice of the change has been given to

all Direct Clearers by the CPA, each Direct Clearer shall ensure that Warehoused Transactions destined to that Indirect Clearer are delivered to the newly appointed Clearing Agent;

(b) subject to subsection (c), where less than one month notice of the change has been given to all

Direct Clearers by the CPA, each Direct Clearer shall on a best effort basis ensure that Warehoused Transactions are delivered to the newly appointed Clearing Agent; and

(c) For the purposes of subsections (a) and (b): (i) the obligation to deliver Warehoused Transactions to the newly appointed Clearing Agent

shall begin on the next Business Day following the date of the change of Clearing Agent;

Rule F7 Page 3


(ii) Warehoused Transactions are limited to those transactions that have not been

Exchanged for the purpose of Clearing and Settlement; and (iii) each Originating Direct Clearer shall ensure that all data elements in each transaction

properly reflect the delivery of the transaction to the newly appointed Clearing Agent. Delayed Use of New FIF 11. (a) On the change over date of the new clearing arrangements, the affected Indirect Clearer may be represented by two Clearing Agents. The institution acting as Clearing Agent up to the time of the change over date shall delay applying

the new FIF for one processing day, on the change over date, in order to permit editing of received Files on the same basis on which the Files were created.

(b) Where a serviceability code for an Indirect Clearer is changed to indicate a reduced lead time, the

Clearing Agent for the Indirect Clearer shall not reject Items solely for the reason that the lead time is too long.

Routing AFT Transactions 12. (a) AFT Transactions destined to FIF “V” status Branches, which contain no data in the cross-

referenced number field, are to be forwarded to the registered Data Centre servicing the Branch. (b) AFT Transactions destined to FIF “C” Branches, shall not be delivered to the Processing Direct

Clearer. (c) AFT Transactions destined to FIF “X” Branches, must contain data in the cross-reference number

field, and are to be forwarded to the registered Data Centre servicing the Branch identified in the cross-reference field. The Originating Direct Clearer shall deliver the original AFT Transaction unaltered.

(d) AFT Transactions destined to Branches not contained on the FIF file shall not be delivered to the

Processing Direct Clearer. Encoding Conventions 13. (a) If there is no data in the MICR Encoding data field for a Branch of an Indirect Clearer with

institution type 11, this condition means that the Indirect Clearer does not allow chequing privileges.

(b) If there is no data in the MICR Encoding data field for an Indirect Clearer with institution type 10,

this condition means that the Indirect Clearer encodes its Institution Number on its Cheques. (c) If there is data present in the MICR Encoding data field for an Indirect Clearer with institution type

either 10 or 11, the data contained in this field overrides the Institution Number for encoding purposes.

Rule F7 Page 4


Amalgamations 14. In the event of an amalgamation between two (2) or more Direct Clearers (including Group

Clearers) or the acquisition of one Direct or Group Clearer by another, a twelve (12) month period shall be allowed to gradually phase out the use of the AFT Exchange Points associated with the Institution Number of the acquired or amalgamated institution, subject to the exercise of the President’s discretion pursuant to subsection 36(2) of By-Law No. 3.



RULE G12

PROCEDURES FOR PUBLIC WORKS AND GOVERNMENT SERVICES CANADA (PWGSC)

DIRECT DEPOSIT PAYMENT ITEMS





Rule G12 - Procedures for Public Works and Government Services Canada (PWGSC) Direct Deposit Payment Items

Implementation and Revisions

Implemented March 1984

Amendments Pre-November 2003 June 1984, September 18, 1986, January 28, 1987, March 4, 1987, April 12, 1989, June 14, 1991, November 18, 1993, January 22, 1996, March 25, 1996, May 23, 1996, April 7, 1997, July 14, 1997, December 1, 1997, June 18, 1998, December 7, 1998, February 1, 1999, February 4, 1999, October 7, 1999, October 5, 2000, March 22, 2001 and April 23, 2001. Amendments Post-November 2003 1. Amendments to update rule and to accommodate the elimination of Returned Item Vouchers, approved by the Board October 11, 2007, effective October 20, 2008. 2. Amendments to update the rule to accommodate the upgrade to ACSS Version 12 and the

introduction of a new stream for Government Direct Deposits on the ACSS. Approved by the Board November 24, 2011, effective April 2, 2012.

3. Amendments to update the contact information for the Cheque Redemption and Control

Directorate (CRCD), approved by the Board October 11, 2012, effective December 10, 2012. 4. Amendments to accommodate ISO 20022 AFT Message Formats, as approved by the Board

February 18, 2016, effective April 18, 2016. 5. Amendments to replace references to Standard 017 with the Canadian ISO 20022 Usage

Guidelines, approved by the Board December 1, 2016, effective January 30, 2017. 6. Amendments to accommodate increase exchange frequency, funds availability timeframes and

settlement processes; approved by the Board June 22, 2017, effective September 17, 2018.

Rule G12 Page 1

Rule G12 - Procedures for Public Works and Government Services Canada (PWGSC)

Direct Deposit Payment Items

Introduction 1. This Rule outlines the operating standards and procedures between Public Works and

Government Services Canada (PWGSC) and the Direct Clearers for the exchange of Direct Deposit (DD) transactions issued in accordance with Standard 005 or the ISO AFT Usage Guidelines.


Scope 2. The procedures outlined in this Rule shall allow PWGSC to exchange with Direct Clearers,

(a) Logical Records Types C and E within AFT Files; or,

(b) where it has registered to exchange ISO 20022 AFT Transactions pursuant to Rule F4, ISO FI to FI Customer Credit Transfer and FI to FI Payment Reversal Transactions for Credits within ISO AFT Files.

References 3. This Rule shall not be read in isolation as it describes only those processes that differ from those

described in Section F of the ACSS Rules. It shall be read in conjunction with the following documents:

(i) Section F of the ACSS Rules; (ii) CPA Standard 005; (iii) CPA Standard 007; (iv) CPA Standard 018; (v) ISO AFT Usage Guidelines; and (vi) the CPA’s “List of Account Number Formats and Validation Criteria”.

Certification 4. Where a Direct Clearer undertakes to effect payments through the medium of the Direct Deposit

Operating Procedures it certifies that: (a) for Direct Clearers, the payments have been made to the destination accounts and the funds

have been made available to the Payee in accordance with the Credit Transaction funds availability timeframes provided in Section F of the ACSS Rules and section 6 of this Rule, with the exception of those payments classified as Rejected/Returned Transactions; and

(b) for Indirect Clearers, with the exception of Rejected Transactions, the AFT Transactions have

been delivered to the proper Indirect Clearers with instructions identifying the payments, the destination accounts, the amounts and any remittance detail provided in ISO FI to FI Customer Credit Transfer Transaction in accordance with IC Cut-off requirements provided in Section F of the ACSS Rules.

In the event that any payment has not been made to the destination account, whether by the Direct Clearer or its serviced Indirect Clearer, the Returned Transaction shall be handled in accordance with sections 8, 11 and 12 of this Rule.

Rule G12 Page 2



PWGSC Delivery Procedures 5. (a) PWGSC shall, in every PWGSC Exchange Period, as defined in section 6, deliver one of the

following files to each Processing Direct Clearer at the AFT Exchange Point designated by that Member:

(i) an AFT File and the Summary of Data Delivered (Appendix II) or (ii) where no AFT Transactions are being transmitted, a Null File.

(b) In order to facilitate the exchange of AFT Files between PWGSC and Direct Clearers, the Bank of

Canada shall register its offices and ensure the necessary information appear on the Financial Institution File (FIF).

Exchange Deadlines and Periods 6. (a) PWGSC AFT Files may be exchanged within the following PWGSC Exchange Periods, as

organized by the applicable PWGSC Exchange Deadline (in Eastern Time):

PWGSC Exchange Deadline (Business Days only) PWGSC Exchange Period

08:15:00 hours 21:00:01 – 08:15:00 hours


16:30:00 hours 08:15:01 – 16:30:00 hours 21:00:00 hours 16:30:01-21:00:00

(b) For the purpose of determining when a Payee FI must make Credit Transaction funds

available to the Payee as outlined in Section F of the ACSS Rules,

(i) references to “Exchange Deadline” in Section F of the Rules shall be read as “PWGSC Exchange Deadline”; and

(ii) the 08:15:00 PWGSC Exchange Deadline shall be treated as though the deadline is 09:30:00.

Unpostable Transactions, Re-routed Items, Correction of Branch Account Information, Returned Transactions 7. AFT Credit Transactions that are accepted in the AFT Initial File Edit by the Processing Direct

Clearer and subsequently unposted, shall not be held by the branch of account, but shall be re-routed or returned according to one of the following procedures:

(a) (i) Where the account type or account number has been changed or the account has been

transferred to another branch of the same financial institution, that institution may elect to re-route the transaction accordingly;

(ii) Where a financial institution undertakes the re-routing of a Credit Transaction, any

ensuing liability from the re-routing shall be borne by that financial institution; (iii) Where a financial institution has elected to re-route a Credit Transaction and wishes to

advise the Payment Originator of corrections to Branch account information, the re-routing Institution shall create a NOC or IMA, in accordance with Rule F1 or Rule F4.

Rule G12 Page 3



(b) Where a financial institution undertakes to return an unposted transaction it shall do so in accordance with the Institutional ID Number for Returns pursuant to CPA Standard 005 or ISO AFT Usage Guidelines.

Delivery of Returned and Rejected Transactions 8. Direct Clearers, in accordance with Section F of the ACSS Rules and Standards 005 and 007 and

the ISO AFT Usage Guidelines of the CPA Rules Manual, shall deliver to PWGSC AFT Files containing rejects and returns at the AFT Exchange Point. These shall be accompanied by a Summary of Data Delivered.

Procedures for Direct Clearer Replacement AFT File 9. Each Direct Clearer shall be prepared to re-create and re-submit a Reject/Return file upon

request of PWGSC, provided that such a request is made within 3 business days of the AFT File exchange of the original Reject/Return file.

Timing of Redemption (settlement of PSWGC AFT Credits) 10. (a) For AFT Transactions exchanged on the Business Day prior to the Due Date or on the Due Date

by the 08:15:00 PWGSC Exchange Deadline, redemption shall be effected on Due Date. (b) For AFT Transactions exchanged after Due Date, redemption shall be effected on the Business

Day following exchange. [Note: For interest claim calculations, refer to ‘Memorandum of Understanding Between the Government of Canada and Direct Clearers on Arrangements for Certain Banking Transactions’].

Transactions Originated by PWGSC, ACSS Entries, Payment for Government AFT Credit Transactions and Adjustments 11. (a) The Direct Clearers shall complete Government of Canada form PWGSC-TPSGC 5378 (see

Appendix II). This form contains the Due Date, the originating data centre number, the file creation number, volume and the value of each file.

(b) Using the totals indicated in form PWGSC-TPSGC 5378, the Direct Clearers shall as soon as

possible but no later than 09:30 hours (ET) initiate, using Stream identifier “M” or “AFTG” for Government ISO AFT Direct Deposits in the National Electronic Settlement Region, entries into the ACSS against the Bank of Canada for the volume and value of AFT Credit Transactions received from PWGSC for redemption.

(c) The PWGSC-TPSGC 5378 shall be sent via fax or email to the PWGSC CRCD (see contact

information in Appendix I) as soon as possible, but no later than 09:30 hours (ET). (d) Each Direct Clearer will provide to the Bank of Canada standing payment instructions for claims

based on Stream M or stream AFTG entries. Direct Clearers shall be responsible for notifying the Bank of Canada of any changes to their standing payment instructions.

(e) By 11:30 hours (ET), on the same day, the Bank of Canada shall initiate LVTS Payment

Messages in favour of each Processing Direct Clearer that has made entries into the ACSS for the value of Government of Canada instruments being claimed in National Electronic Settlement Region as reflected in the Government Net Position Report.

Rule G12 Page 4



(f) Contested delivery procedures for Stream M and AFTG entries shall be followed as outlined in Rule G3.

(g) Adjustment procedures shall be followed as outlined in Rule G3.

NOTE: For instructions on the entry of instruments on manually prepared Government Items

Clearing Logs, refer to Rule G9. Transactions Originated by Direct Clearers - Rejects and Returns, Bank of Canada Rejects and Payment for Returns, Adjustments 12. (a) The Processing Direct Clearer shall complete form PWGSC-TPSGC 5379 (Appendix IV) by

indicating the combined volume and value of Rejected and Returned AFT Transactions for refund that day. The form shall also contain the following information:

(i) Originating Direct Clearer Data Centre number; (ii) File Creation Numbers or Message Identification Number, and;

(iii) Number and value of each items for each file creation number or Message Identification Number for refund that day.

(b) Direct Clearers shall send the form PWGSC-TPSGC 5379 by fax or email to the Bank of Canada

in Ottawa as soon as possible and PWGSC CRCD (see Appendix I for contact information), but no later than 15:00 hours (ET).

(c) By 15:00 hours ET on the same day, the Processing Direct Clearer shall initiate an LVTS

Payment Message in favour of the Bank of Canada, for the total value of AFT Rejected and Returned Transactions presented on Form PWGSC-TPGSC 5379.

The Processing Direct Clearer shall complete the S.W.I.F.T. Payment (MT205) mandatory fields,

as well as, field 20, indicating “DD RET”. (d) Adjustment procedures shall be followed as outlined in Rule G3. 13. Formal contacts as provided in the AFT Main Contact List shall be established between PWGSC

and Direct Clearers to accommodate such items as: (a) Payment Recalls; (b) Trace Requests; (c) Returns; and (d) AFT File related/ACSS enquiries. Authority to Amend 14. No amendment to this Rule shall be made except as authorized by the CPA, subsequent to

consultation with Public Works and Government Services Canada.

Rule G12 Appendix I

Government Direct Deposit Claims Contact

UCONTACT INFORMATION

Cheque Redemption and Control Directorate

UPWGSC/TPSGC Form 5378 Attn: Payment Reconciliation Sector Subject: PWGSC/TPSGC Form 5378

Fax: 1-418-566-3221 24TUmatdcrcdepotdirect5378-matcrcddirectdeposit5378@tpsgc-pwgsc.gc.caU24T

PWGSC/TPSGC Form 5379

Cheque Redemption and Control Directorate Attn: Investigations, Recovery and Client Services Unit

Subject: PWGSC/TPSGC Form 5379 Fax: 1-418-562-1778

matdcrcdepotdirect5379-matcrcddirectdeposit5379@tpsgc-pwgsc.gc.ca

Bank of Canada Attn: Payment and Settlement Operations

Subject: PWGSC/TPSGC Form 5379 Email: [email protected]

Fax: 1-800-353-3937

mailto:matdcrcdepotdirect5378-matcrcddirectdeposit5378@tpsgc-pwgsc.gc.ca

mailto:matdcrcdepotdirect5379-matcrcddirectdeposit5379@tpsgc-pwgsc.gc.ca


Rule G12 Appendix II

Procedures for DSS Direct Deposit Payment Items

Summary of Data Delivered

Rule G12 Appendix III

Page 1

“Direct Deposit - Detail of Redemption Value,” Form PWGSC-TPSGC 5378 Instructions for Completion

Direct Deposit Detail of Redemption Value Form PWGSC-TPSGC 5378 1. The purpose of the “Direct Deposit-Detail of Redemption Value” form PWGSC-TPSGC 5378 is to provide a detailed breakdown and cross reference information for the redemption value of the

processed AFT Files for Direct Deposit. Cross reference information for the AFT Files shall include: due date, originator’s identification number, file creation number, volume and the value of each AFT File.

Completion of Form PWGSC-TPSGC 5378 for Processed File(s) 2. Form PWGSC-TPSGC 5378 shall be completed in the following manner: (a) Financial Institution Name and Address: The name and address of the financial institution which is claiming the redemption value of the

processed AFT File.

(b) Redemption Date:

The ACSS settlement date under which the ACSS entries were recorded against Bank of Canada.

(c) Processed AFT File Information: Due Date - The date on which value was deposited to the destination accounts. Originator’s Identification -

The ten-digit identification number as utilized by the PWGSC Data Centre which created the AFT File. This number appears in Logical Record Type “A,” Data Element Number 03, of the AFT File.

File Creation No. -

The four-digit file creation number assigned to the AFT File by the originating PWGSC Data Centre.

Value - The value of each processed AFT File. Volume - The number of items contained in the AFT file. Total Value - The total value of processed AFT Files listed on form PWGSC-TPSGC 5378.

(d) Signature, Date, and Telephone Number: The individual completing the form, the date on which it was completed, and the telephone number for further contact.


Page 2

“Direct Deposit - Detail of Redemption Value,” Form PWGSC-TPSGC 5378 Instructions for Completion (Cont’d)

Distribution of Form PWGSC-TPSGC 5378 3. Two copies of form PWGSC-TPSGC 5378 shall be completed and distributed as follows:

Copy 1 - The original form PWGSC-TPSGC 5378 shall be placed in an envelope and delivered to the CRCD in accordance with this Rule. Copy 2 - To be retained by financial institution.

Supply of Form PWGSC-TPSGC 5378 4. Supplies of form PWGSC-TPSGC 5378 may be obtained, free of charge, in multiples of 100, by writing to: Public Works and Government Services Canada Material Management Division Level 03, Tower “A,” Phase III Place du Portage 11 Laurier Street Hull, Quebec K1A 0S5 Attention: Manager, Warehousing Supplies of this form may also be obtained by sending a fax message to the following number: Fax number: (819) 956-3172 Calls relating to the ordering or shipment of these forms may be made to the following number: Phone number: (819) 956-3165


Page 3

“Direct Deposit - Detail of Redemption Value” Form PWGSC-TPSGC 5378

Rule G12 Appendix IV

Page 1 “Direct Deposit - Detail of Refund Value

(Rejects/Returns)” Form PWGSC-TPSGC 5379 Instructions for Completion

Direct Deposit Detail of Refund Value (Rejects/Returns) Form PWGSC-TPSGC 5379 1. The purpose of the “Direct Deposit - Detail of Refund Value (rejects/returns on tape)” form

PWGSC-TPSGC 5379 is to provide a detailed breakdown and cross reference information for the value of rejects/returns on tape for Direct Deposit. Cross reference information for the Rejects/Returns File includes: originator’s identification number, file creation number, the number of items, and the value of each AFT File.

Completion of Form PWGSC-TPSGC 5379 for Rejects/Returns File(s) 2. Form PWGSC-TPSGC 5379 shall be completed in the following manner: (a) Financial Institution Name and Address The name and address of the financial institution which is making a refund for the rejects/returns

AFT File(s). (b) Refund Date The date form PWGSC-TPSGC 5379 is being presented to the Bank of Canada for refund. (c) Rejects/Returns AFT File Information Originator’s Identification -

The identification number of the Direct Clearer Data Centre which created the Reject/Return File(s).

File Creation - The file creation number assigned to the Rejects/Returns File(s) by the Originating Direct

Clearer. Number of Items - The number of items contained on this AFT File for this refund date. Value - The value of the items contained on this AFT File for this refund date. Volume - The number of the items contained on this AFT File for this refund date. Total - The total number of items and the total value of items contained on this AFT File for this

refund date.


Page 2 “Direct Deposit - Detail of Refund Value

(Rejects/Returns)” Form PWGSC-TPSGC 5379 Instructions for Completion

(d) Signature, Date, and Telephone Number

The individual completing the form, the date on which it was completed, and the telephone number for contact

Distribution of From PWGSC-TPSGC 5379 3. Two copies of form PWGSC-TPSGC 5379 shall be completed and distributed as follows:

Copy 1 - The original form PWGSC-TPSGC 5379 shall be placed in an envelope and delivered to the CRCD in accordance with this Rule.

Copy 2 - To be retained by Financial Institution. Supply of Form PWGSC-TPSGC 5379 4. Supplies of form PWGSC-TPSGC 5379 may be obtained, free of charge, in multiples of 100, by

writing to: Public Works and Government Services Canada Material Management Division Level 03, Tower “A,” Phase III Place du Portage 11 Laurier Street Hull, Quebec K1A 0S5 Attention: Manager, Warehousing Supplies of this form may also be obtained by sending a fax message to the following number:

Fax number: (919) 956-3172 Calls relating to the ordering or shipment of these forms may be made to the following number:

Phone number: (819) 956-3165


Page 3 (end)

“Direct Deposit - Detail of Refund Value Rejects/Returns)” Form PWGSC-TPSGC 5379

Instructions for Completion



RULE K8

U.S. DOLLAR AUTOMATED FUNDS TRANSFER SYSTEM


This Rule is copyrighted by the Canadian Payments Association. All rights reserved, including the right of reproduction in whole or in part, without express written permission by the Canadian Payments Association. Payments Canada is the operating brand name of the Canadian Payments Association (CPA). For legal purposes we

continue to use “Canadian Payments Association” (or the Association) in these rules and in information related to rules, by-laws, and standards.

Rule K8– U.S. Dollar Automated Funds Transfer System

Implementation and Revisions Implemented April 9, 1998

Amendments Pre-November 2003 May 11, 1998, July 19, 1998, December 7, 1998, February 1, 1999, May 7, 1999, October 7, 1999, November 18, 1999, January 17, 2000, June 5, 2000, October 5, 2000, June 4, 2001, November 29, 2001, April 15, 2002, July 15, 2002, November 25, 2002, January 27, 2003, and March 31, 2003. Amendments Post-November 2003 1. Section 10(d), approved by the Board June 29, 2004, effective January 5, 2005. 2. Removal of Appendices II and IV, approved by the Board October 6, 2005, effective December 5, 2005. 3. Amendments to accommodate the elimination of Returned Item Vouchers, approved by Board October 11, 2007, effective October 20, 2008. 4. General review of Rule, approved by the Board June 18, 2015, effective August 17, 2015. 5. Amendments to update the rule to accommodate the adoption of ISO 20022 AFT message

formats, approved by the Board February 18, 2016, effective April 18, 2016. 6. Amendments to replace references to Standard 017 with the Canadian ISO 20022 Usage

Guidelines, approved by the Board December 1, 2016, effective January 30, 2017. 7. Amendments to accommodate changes to serviceability codes and exchange timeframes,

approved by the Board June 22, 2017, effective September 17, 2018.

Rule K8 Page 1


Introduction 1. This Rule outlines the procedures applicable to the exchange and settlement of USD AFT Files

between Direct Clearers, which differ from those applicable to the Canadian dollar AFT environment. USD AFT Files shall be delivered on a separate file from CAD AFT Files.


Scope

2. The procedures outlined in this Rule are applicable to all AFT Logical Record Types as defined in CPA Standard 005 and all ISO AFT Message Formats as defined in the ISO AFT Usage Guidelines.

References 3. This Rule shall be read in conjunction with the following Rules and Standards:

(a) Section "F" of the ACSS Rules; (b) Rules L1 and L2; (c) Standards 005, 007, and 018; (d) The ISO AFT Usage Guidelines; and (e) The List of Account Number Formats and Validation Criteria.

Participants 4. (a) A Direct Clearer shall receive USD AFT Files (either on its own or through another Direct

Clearer). (b) In the event that a Direct Clearer participates in the clearing, either to receive or to

receive and deliver USD AFT Transactions, through another Direct Participant, it shall, by separate agreement, require the Direct Participant performing the clearing services to comply with this Rule on its behalf, save in respect of settlement pursuant to section 10, which shall be performed by each Direct Participant on its own behalf.

(c) A list of Direct Participants is maintained by the CPA. (d) The registration form for USD AFT participants is attached as Appendix II.

Registration of Direct Participants

5. (a) Direct Clearers shall register with the CPA either to receive or to receive and deliver USD AFT Transactions and to effect settlement. If a Direct Clearer chooses only to receive USD AFT Transactions, and at a later date wishes also to deliver such items, it shall undertake another registration and process test files in accordance with subsection 4(c) below. New registrations to participate in USD AFT exchange shall be made at least 180 days prior to implementation date.

(b) Registration shall constitute notice to other participants of each Direct Participant’s

election to receive or to receive and deliver USD AFT Transactions and to effect settlement for them (subject to subsection 4(c)). The CPA shall notify Direct Clearers of all new registrations, including implementation dates, within two (2) business days of registration.

Rule K8 Page 2


(c) Direct Participants shall exchange and successfully process test files with each of the

other Direct Participants prior to exchanging production files. Lead Times & Funds Availability 6. (a) Each Processing Direct Clearer or Indirect Clearer shall, unless otherwise required by

applicable legislation, be responsible for ensuring USD AFT or ISO AFT Credit Transaction funds are credited to the Payee’s account and available for withdrawal or other use by the Payee by the opening of business on the Due Date of the transaction, provided that the transactions were exchanged within the Serviceability Code time frames outlined in Rule F1.

(b) For the purposes of USD AFT or ISO AFT Credit Transactions, branches designated as

Serviceability Code “0” will be treated as though they are Serviceability Code “1”. Settlement, Timing of Exchange and Settlement and Location of Settlement and U.S. Holidays 7. With respect to the settlement of USD AFT Transactions:

(a) each Direct Clearer shall determine the net amount due to or from each other Direct Clearer, for its own Items and for Items of any non-Participating Direct Clearer for which it acts as Settlement Agent;

(b) each Direct Clearer shall use either the information provided by the USBE system or by

preparing the National Summary USBE Report; (Refer to Rule K5, Appendix III); (c) each Direct Clearer with amounts owing to other Direct Clearers shall provide settlement

in New York; (d) each Direct Clearer shall maintain for a period of one year, a summary of USD AFT and

ISO AFT Debit and Credit Transactions by Exchange Point, by USD AFT File, and by due date for all USD AFT Transactions received and delivered;

(e) no Settlement shall be made for rejected USD AFT Files; (f) subject to subsection 7(g), all USD AFT Transactions shall be settled for in New York on

due date;

(g) USD AFT Files shall be exchanged only during the morning exchange prior to 9:30 a.m. Eastern Time with file rejection notification to occur no later than noon Eastern Time. Settlement shall be effected in New York on due date or on the date of exchange for transactions delivered after due date. The Summary of Data Delivered Report shall be sent to the Processing Direct Clearer at, or prior to, the time of transmission;

(h) each exchange that takes place within Canada on U.S. bank holidays shall have its

settlement value dated for the next business day in New York.

Rule K8 Page 2


USBE Entries 8. (a) On each Settlement day, each Processing Direct Clearer shall initiate, using stream

identifier "C" or “AFTC”, as applicable, in the National Electronic Bulk Exchange Point, a debit entry against each of the other Direct Clearers from which it has received USD Credit Transactions (i.e., Logical Record Types ”C”, “F” and “J” or ISO AFT Credit Transactions , ISO AFT Payment Return for a Credit and ISO FI to FI Payment Reversal for Credits ) for Settlement that day. Each debit entry shall specify the total number and value of USD AFT Transactions received from the Direct Clearer being debited. Such debit entry shall be made no later than 14:30 hours ET.

(b) On each Settlement day, each Originating Direct Clearer shall initiate, using stream

identifier "D" or “AFTD”, as applicable, in the National Electronic Bulk Exchange Point, a debit entry against each of the Direct Clearers to which it has delivered USD Debit Transactions (i.e., Logical Record Types "D" and "E" or ISO AFT Debits, ISO AFT Payment Return for Debits and ISO AFT Payment Reversals for Debits) for Settlement that day. Each debit entry shall specify the total number and value of USD AFT Transactions delivered to each Direct Clearer being debited. Such a debit entry shall be made no later than 14:30 hours ET.

Rule K8 Appendix I (end)

U.S. Dollar Automated Funds Transfer System

REGISTRATION FORM FOR USD AFT TRANSACTION DIRECT PARTICIPANTS

Please return to:

Payments Canada Service Desk Payment Operations
