Fund Transfer Regulation (Phase II)

Affected banks: European banks
Mandatory effective date: 24.06.2018
Solution status: solution was processed in February 2018
Solution implementation date: March 2018

The new Fund Transfer Regulation (EU) 2015/847 (known as FTR) defines the information on payers and payees that must accompany fund transfers in order to help prevent, detect and investigate money laundering and terrorist financing.

The solution for the first phase of the FTR has been effective since 26 June 2017 and has been delivered by ASSL. The second phase aims to integrate a risk-based approach in the FTR framework that ensures the more accurate detection of potential fund transfers that entail a high risk of money laundering (see also ESMA’s Final Guidelines under Article 25 of Regulation EU 2015/847).

The risk-based approach is concretized in additional checks and tasks that have to be performed when receiving a payment. For instance, the incoming payment is evaluated automatically with a risk score and if a threshold is surpassed, then additional checks are triggered, and an issue is generated for the competent bank-internal authority to decide if the external authority (the national financial intelligence unit) needs to be informed. The incoming payment process has therefore been changed to fulfil the obligations.

Our approach
The requirement analysis in the second phase of the FTR entails significant effort due to the complexity of the risk-based approach framework. This has been included in the solution exploiting the synergies with other projects (such as AML).

The finalized solution is compliant with the overall regulation guaranteeing the coverage of the overall phases.

Key dates

March 2018 Finalization of the solution document and receiving binding feedback from clients
July 2018 Starting of project delivery phase
October 2018 Delivery of the project for the other European banks
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Payment Service Directive II (PSD II)


Affected banks: all banks in the EEA
Mandatory effective date: expected Q3 2019
Solution status: considered
Solution implementation date: N/A

January 2018 was particularly busy for the financial sector, at least from a regulatory perspective. Among other things, the new Payment Service Directive (PSD II) came into effect after the EU member states enacted it in national law. In its aim to create a single European payment market, the directive presents many risks, but also lots of opportunities.

Generally speaking, the directive comes in two phases: the first has already been implemented and includes rules on transparency (information to be provided to the client), dates to be complied with in payment transactions (with particular emphasis on value dates), unconditional rights to refund in direct debit schemes, and some rules on cost and fees (such as no charge for the beneficiary), just to mention a few.

But the real innovation is yet to come: account information services (AIS) and payment initiation services (PIS). Considering that the total number of non-cash payments in the EU in 2016 amounted to 122 billion (49% of all transactions), with the importance of paper-based transactions continuously decreasing (the ratio of paper-based transactions to transactions initiated electronically stands at around one in nine)3, it is easy to see why so much attention has been given to this directive.

According to Deloitte, retail payments generated EUR 128 billion in revenue for banks back in 2015, coming from interest, spreads, fees and annual maintenance costs.4

Account information service providers (AISPs) will be able to collect data about payment accounts, aggregate it, perform analysis and offer services based on this data. Payment initiation service providers (PISPs) will have the right to initiate a payment on behalf of the client. Both services will be offered through the development of open APIs (application programming interfaces) based on country-specific standards, such as ‘Open Banking’ in the UK.

Our approach
The solution for the first phase of PSD II has been developed by ASSL in order to meet the legal deadline.

The 13th of March 2018 the RTS about strong customer authentication and common secure communication have been published in the Official Journal of the European Union, which set the deadline for the implementation of the second phase: 14th of September 2019.

The solution for the second, more sensitive phase has yet to be developed, even if Avaloq Evolution is already at an advanced stage in its development of the public APIs based on the Open Banking standard.

Key dates

Q2 2018 Webinar about second phase of PSD II
Q2 2019 Planned going live of solution

[3] European Central Bank (ECB), “Payment statistics for 2016”,
[4] Deloitte, “Payments disrupted”,

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Harmonization of Swiss payments

Affected banks: all Swiss banks
Mandatory effective date: different phases from 2018 till 2020
Solution status: considered
Solution implementation date: N/A

Following the implementation of the new ISO 20022 standard messages for Payment Initiation (pain) and Cash Management (camt), the Swiss payment system aims to achieve full harmonization by the end of 2020.

The main targets for payment harmonization are:

  • to enable continuous automated processing and reconciliation for Swiss and cross-border transactions;
  • to adopt a standardized direct debit procedure;
  • to replace the current payment slips with the new QR billing to improve payment efficiency.

The whole harmonization programme covers four interrelated streams.

Credit transfer
By mid-2018 the current interbank and customer bank payment standards and schemes (EPO, ISR, ECA, SIC and DTA) will be harmonized with the ISO 20022 standard and will also adopt the pain.001 (Customer Credit Transfer Initiation) and the pain.002 (Customer Payment Status Report) messages.
Moreover, the IBAN will become the sole primary identification for bank and postal account connection as of 2020.

Direct debit
While there is currently no expected end date for the TA875 format used for BDD and LSV+, the direct debit collection transmission throughout the pain.008 (Customer Direct Debit Initiation) is already possible. The former PostFinance format (i.e. TXT Debit Direct format) is no longer supported.

Notifications and account statements
New standard messages for account balances and single movement notifications will be adopted in the relationship between the bank and its customer: camt.052 (Intra-day Account Statement), camt.053 (End-of-day Account Statement), camt.054 (Intra-day Debit & Credit Notification).

QR bill and payment slips
The Swiss QR Code is the digital format which contains all the required information to make each bill ready for payment in just one click.

  • The QR bill can be created in black and white A6 format using a standard printer. It can contain any additional information enabling automatic processing and reconciliation.
  • A technical device to read the QR bill is not strictly required since all payment information is printed on the payment part.
  • Generally, the Swiss QR Code might be extended to also support alternative payments, such as donation by posters or flyers and, at a later date, e-billing or TWINT.
  • Within this context, the LEON platform by SIX aims to optimize the e-billing functionality and to combine e-billing and direct debit.

The current orange and red payment slips will be replaced starting from mid-2019, being used in parallel with QR bills for a period before being ultimately abolished most probably by the end of 2020.

Our approach
The recent “SIC4 client Community Project”, which saw the successful implementation of the new ISO 20022 messages within the ASM environment, represents the first step of the harmonization goal for our Client Community. The additional features for direct debit and all the items related to the adoption of the QR Code are currently being assessed and will be presented to the Client Community in the second part of this year.

Key dates

Q3 2018 Solution presented to the community and binding feedback received
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SFTA Circular 15

Affected banks: Swiss banks
Mandatory effective date: 1 January 2018
Solution status: considered
Solution implementation date: April 2018

On 3 October 2017, the Swiss Federal Tax Administration (“SFTA”) has updated Circular No. 15 regarding the taxation of bonds and derivative financial instruments.

The main modifications are related to:

  1. Bonds with principally periodical interest
  2. Capital protected units/Notes
  3. Bonds issued by foreign group companies
  4. Gains on structured products
  5. Negative interests

The objective of this regulation is to promote transparency regarding financial products and consequently avoid tax evasion.


Our approach
We are currently analysing the requirements and considering to propose a solution to the Community.

Three main tax components will be impacted:

  • direct federal tax;
  • transfer tax;
  • preventive tax.

Each of these components must be then adapted to the specific requirements.


Key dates


Entry into force

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