Australian Payments Clearing Association
ANNUAL REPORT 2001
A.B.N. 12 055 136 519
Australian Payments Clearing Association
Contents
Chairman’s report
1
Payment statistics
2
Year’s highlights
3
APCA
4
Advisory councils
6
Operations
APCS
BECS
CECS
HVCS
Cross-system
8
9
10
11
12
Corporate governance
M ISSION
APCA’s mission is to achieve and maintain international best
practice in the operation of the Australian payments clearing
system.
R OLE & O BJECTIVES
APCA develops and manages regulations and procedures
governing payments clearing. This is done through separate
clearing systems, which collectively encompass the majority
of non-cash payment transactions in Australia.
APCA develops and manages the Australian payments clearing
system so as to:
▲
preserve the integrity of the system;
15
▲
identify and control settlement risk;
Management
16
▲
improve the effectiveness and efficiency of the system;
Directors
18
▲
ensure principles of equity and competitive neutrality apply
when deciding participation in the system;
Share and participating members
20
▲
facilitate coordination of payments clearing arrangements
among providers of payment services; and
▲
assist the community to understand the system and ensure
that public debate is well informed.
Corporate information
Inside
back cover
G LOSSARY
ACCC Australian Competition and
Consumer Commission.
CHESS The Australian Stock
Exchange’s ‘Clearing House Electronic
Subregister System.’
APCS Australian Paper Clearing
System. A system for the clearing and
settlement of paper items.
CLS Continuous Linked Settlement.
ASIC Australian Securities and
Investments Commission.
ATM Automated Teller Machine.
BECS Bulk Electronic Clearing System.
A system for the clearing and settlement
of direct entry transactions.
BSB A number used as a code to
identify financial institutions in the
clearing and exchange of items.
CECS Consumer Electronic Clearing
System. A system for the clearing
and settlement of ATM and EFTPOS
transactions.
DDR Direct Debit Request. An authority
given by a customer to a billing
organisation to periodically debit
the customer’s account at a financial
institution.
DE Direct Entry. A form of payment
instruction providing for the periodical
debiting or crediting of customer
accounts.
EFTPOS Electronic Funds Transfer at
Point of Sale.
PKI Public Key Infrastructure.
A documentary and physical
infrastructure for the issuance and
revocation of public and private
cryptographic keys.
RTGS Real Time Gross Settlement.
Settlement arrangements in which each
payment transaction is settled individually
at the time of the transaction.
STP Straight Through Processing.
SPC Special Purpose Committee. A
committee, operating as the forerunner
of a management committee, created
by the Board to bring a particular
clearing system to the point of formal
establishment under APCA rules.
HVCS High Value Clearing System.
A system for the exchange and settlement
of RTGS payments.
SWIFT Society for Worldwide
Interbank Financial Telecommunications.
MICR Magnetic Character Ink
Recognition. The form in which the
codeline is produced on cheques and
other paper instruments.
SWIFT/PDS SWIFT Payment Delivery
System. The delivery system used to
relay payments from one financial
institution to another in the HVCS.
Chairman’s report
I NCLUSIVENESS , OPENNESS AND ENGAGEMENT
Inclusiveness, openness and engagement marked APCA’s
year in 2000-01. Behind the scenes we continued the task
of maintaining and enhancing the integrity and efficiency of
payments clearing arrangements.
repaired and developed as
technology develops, as the
market environment changes,
and as community standards
and expectations change.
I am pleased to report that in the past year APCA completed
the establishment of all four clearing systems originally planned.
The last to be established, the Consumer Electronic Clearing
System (CECS), began operating in December 2000, with
15 initial participating members. One of those members was
retailer Coles Myer.
Payments clearing is a
deceptively simple process.
However, a lot goes on behind
the scenes to ensure it works
Mr Robert Challis
efficiently. At any one time,
APCA is dealing with a large
number of issues and projects that eventually result in changes
to its rules. The issues and projects we dealt with last year, and
their outcomes, are covered inside this report. I would like to
highlight a few of them:
One of our objectives is to become a more inclusive organisation.
Extending CECS membership to Coles Myer is a clear example
of this, as was establishing advisory councils the year before.
We intend to carry the objective forward this year by finalising
and introducing a new company Constitution that will remove
institutional barriers to owner membership. Once this has been
completed, we will embark on amendments to the membership
rules of each of the other clearing systems consistent with the
constitutional change.
One of APCA’s goals has been to make its rules and activities
transparent. We seek ACCC authorisation for our rules when
trade practices issues are triggered. This year we placed all our
rules, except for a small subset involving security issues, on
our website.
Since it was established, APCA has made a number of submissions
to governments and other parties on payments matters. However,
our public profile has not been as well developed as we had wanted.
Payments clearing is not the type of activity that generates
continual public interest, but it is of central importance to the
financial system. Therefore we believed that we needed to do
more to ensure that APCA’s views were heard. To further this
objective, we established a small public affairs area to better inform
APCA’s wider set of stakeholders and to ensure we responded
appropriately when relevant issues arose in the community.
In this context, APCA provided its views on the issue of direct
debiting to Mr Richard Viney, who is reviewing the Code of
Banking Practice. We also provided submissions to ASIC and
to a Federal parliamentary joint sub-committee on the issue of
real-time fee disclosure at ATMs.
T HE OPERATING RULES
The operating rules and technical standards that underpin
payments clearing are not static. They need continually to be
In paper clearing, we examined the feasibility and cost
effectiveness of introducing imaging to complement electronic
processing. This work will continue this year.
▲
In direct entry, we held a workshop with a range of interested
parties to assess whether and how this very efficient system
might be used for a wider number of purposes. The results
of this workshop are under detailed review by the BECS
Management Committee.
▲
In the high value system, we put in place procedures and new
message formats to facilitate the efficient straight-through
processing of payments.
T HE BOARD
It is now two years since I accepted the position of chairman. It
has been an enjoyable and challenging time, and I have accepted
the offer by the board to extend my term for a further two years.
There were a number of board changes during the year.
Wes Hooper, an inaugural director, left the board, as did
John McFadden and David Taylor. I would like to acknowledge
their valuable service to APCA and thank all directors who
served on the board for their support.
Don Gregg, Sean Straney and Mark Genovese joined the board.
I look forward to working closely with all directors in the
coming year.
Finally, I would like to thank all the members of APCA’s
committees and advisory councils for their contribution to
APCA’s affairs, and the Chief Executive Officer Peter Smith and
his management team, for their continuing sound and effective
management of the company.
ANNUAL REPORT 2001
We intend to ensure that we are engaged appropriately when
government and the community deal with issues relating to
what we do.
▲
Robert N Challis
Chairman
1
Payment statistics
Source
1994
1995
1996
1997
1998
1999
2000
2001
N UMBER OF PAYMENT TRANSACTIONS
& ATM WITHDRAWALS
Business day average for month of May
– millions of items (a)
Cheques
Direct entry credits
Direct entry debits
APCA
APCA
APCA
3.7
1.6
0.3
3.9
1.9
0.4
3.9
1.7
0.4
3.7
1.8
0.4
3.7
1.9
0.6
3.2
2.1
0.8
3.1
2.3
0.9
2.7
3.2
1.2
Monthly total for May – millions of items
ATM withdrawals (c)
EFTPOS (d)
Credit cards (d)
APCA
RBA
RBA
40.7
20.7
19.9
38.8
29.1
22.6
41.6
35.5
24.6
39.2
39.2
25.9
42.9
44.5
32.8
41.9
48.6
42.9
48.4
52.0
57.7
64.0
57.5
66.4
VALUE OF PAYMENT TRANSACTIONS
& ATM WITHDRAWALS
Business day average for month of May
– $ billions (a)
Cheques
Direct entry credits
Direct entry debits
HVCS transactions (f)
APCA
APCA
APCA
RBA
24.8
1.9
1.3
23.4
2.6
1.2
24.3
4.2
1.6
24.9
3.4
1.6
14.6
3.6
2.4
64.1
12.3
5.3
4.0
65.5(g)
9.7(e) 8.3
7.1
10.2
5.4(e) 7.8
72.6(g) 83.2(g)
Monthly total for May – $ billions
ATM withdrawals (c)
EFTPOS (d)
Credit cards (d)
APCA
RBA
RBA
4.4
1.1
1.8
4.9
1.5
2.0
5.6
1.9
2.3
5.4
2.1
2.5
6.2
2.4
3.6
6.8
2.8
4.3
7.3
3.1
6.4
9.4
3.5
7.5
N UMBER OF ACCOUNTS / CARDS
Monthly total as at end of May in millions (b)
Customer payment accounts
Debit cards
Credit & multifunction cards
APCA
APCA
APCA
34.4
13.2
9.1
34.9
13.6
9.9
30.8
15.1
9.8
31.6
15.3
9.7
29.7
16.4
10.3
26.9
15.7
12.1
27.1
17.8
13.2
32.7
19.4
15.6
NUMBER OF ATM & EFTPOS TERMINALS
ATMs (h)
APCA 5,848
EFTPOS (h)
APCA 38,875
6,249
7,178 8,182 8,814
9,387 10,818 11,949
62,975 107,702 164,199 218,330 265,391 320,372 349,646
N OTES
(a) Figures for 1994-1996 are based on figures collected in the
month of November except for ATM withdrawals, which
are August figures.
AUSTRALIAN PAYMENTS CLEARING ASSOCIATION
(b) Figures for 1994-1996 are as at the end of August.
(c) ATM withdrawals for 1995 may have been affected by
devices that were out of service due to a security guards’
strike in August.
(d) From Reserve Bank figures showing credit card and EFTPOS
transactions acquired from merchants each month (see Table
C.3 of the Reserve Bank of Australia Bulletin).
(e) These figures have been revised.
2
(f) HVCS figures are values exchanged and do not include
‘own items’ (ie intra-bank items). Note also that a full picture
of RTGS transactions would require HVCS transactions to be
supplemented by Austraclear and RITS transactions that are
not captured in these figures.
(g) From Reserve Bank figures showing Real-Time Gross Settlement
Statistics each month, (see Table C.4 of the Reserve Bank
of Australia Bulletin). APCA HVCS transactions figures are
taken from the SWIFT PDS column of Table C.4.
(h) Figures for 2001 are for the end of March, and for years
1994-2000 are for the end of June. These figures are updated
quarterly and are published on our website www.apca.com.au
Year’s highlights
▲
Implemented the Consumer Electronic Clearing System
(CECS), completing the establishment of APCA’s four
clearing systems as originally planned.
Peter Smith
Chief Executive Officer
‘CECS membership rules
demonstrate how APCA is becoming a
more open and inclusive organisation.’
▲
and incorporated these into clearing system Regulations
PETER SMITH, CEO
▲
and Procedures.
Extended membership to retailers that capture and switch
▲
EFTPOS transactions, with retailer Coles Myer joining CECS.
▲
Released Standard Inter-Organisation Compensation Rules
Developed revised failure to settle rules for the APCS.
Amended BECS rules to facilitate all BECS members competing
for government agency direct entry business.
▲
Undertook a strategic review of BECS, based on input from
a stakeholder workshop.
▲
Increased public affairs capability to support stakeholders
and APCA’s engagement in public debate.
▲
Proportion of Payments
by Number
(as at May 2001)
High Value
0.1%
Amended HVCS rules to allow CLS Bank to become a
member and to facilitate straight through processing to
EFTPOS &
Credit Card
44%
improve efficiency.
Cheques
21.4%
Direct Entry
35.4%
▲
Completed the establishment of APCA’s PKI.
▲
Improved administrative efficiency, and improved service
to members, by distributing documents electronically via
APCA’s extranet.
▲
Increased transparency by putting clearing system rules on
APCA’s website.
EFTPOS / Credit Cards
80
60
Direct Entry
40
20
ANNUAL REPORT 2001
Trends in Types of Payments
by Number
(as at May 2001)
%
100
Cheques
0
1994 1995
1996
1997
1998
1999
2000
2001
3
APCA
W HERE APCA FITS IN THE PAYMENTS SYSTEM
APCA sets, develops and manages payments clearing rules.
These rules cover four clearing systems, which collectively
account for the majority of non-cash payment transactions in
Australia. The clearing systems encompass cheques, direct entry,
debit card transactions in ATMs and through EFTPOS, and high
value RTGS payments. APCA is owned by the institutions that
operate as clearers in these systems.
APCA’s clearing systems are open systems. They cover the use
of payment instruments where the payer and the recipient of
the payment can, and usually do, bank with different financial
institutions. Clearers are institutions that exchange payment
instructions arising out of the use of such payment instruments,
for value, as principals.
Exchanging large volumes of payment instructions among
numbers of institutions with absolute reliability day in and day
out requires common procedures and technical standards. APCA
is responsible for these procedures and standards.
Credit and charge card transactions and BPAY transactions are
not covered by APCA.
C LEARING SYSTEMS
APCA has four clearing systems.
1. Australian Paper Clearing System (APCS), covering cheques
and other paper items
2. Bulk Electronic Clearing System (BECS), covering direct
entry payments
3. Consumer Electronic Clearing System (CECS), covering
ATMs and EFTPOS
AUSTRALIAN PAYMENTS CLEARING ASSOCIATION
4. High Value Clearing System (HVCS), covering high value
RTGS payments
(left to right):
Stephen Hills, General Counsel;
Kimberley Chan, Legal Counsel;
Hayley Lock, Committee Secretary;
Stephen Halliday, Director,
Member Services.
4
Each system has its own membership, and governance and procedural
rules. Each has a management committee that operates under
powers delegated to it by the APCA board. The members of
each clearing system, known as participating members, appoint
the management committee.
In APCS and BECS there are two classes of participating members:
Tier 1s and Tier 2s, with a further division of Tier 1s in APCS.
Tier 1s in BECS and Tier 1As in APCS clear and settle directly.
Tier 1Bs in APCS clear indirectly through a Tier 1A but settle
directly. Tier 2s clear and settle indirectly through a Tier 1
representative. There is only one membership class in CECS
and HVCS; though there are different functional categories of
members in CECS.
Management committees draw on assistance from management,
working groups and sub-committees of participating members
and, in the case of APCS, BECS and CECS, from advisory councils.
H OW MEMBERS ARE REPRESENTED
Shareholder members are represented on the board of directors.
Currently, each of the four nationally operating banks and the
Reserve Bank appoints a director. Regional banks collectively
appoint a director, as do all other banks, building societies and
credit unions. There are nine voting directors.
Participating members are represented on the management
committee of each of the systems in which they participate. In
APCS, BECS and HVCS representation is structured as it is at
board level, except that any member with 5% or more of a system’s
clearing volume is entitled to management committee representation
in its own right.
‘Participating members are
▲
Share members
Share members must be eligible for participating membership
in one or more of the clearing systems.
▲
Participating members
Participating members undertake payments clearing in at least
one clearing system (or undertake ‘merchant principal’ activities
in CECS) and have joined the particular clearing system.
▲
Advisory council members
Advisory council members are non-clearers involved commercially
in some way with a clearing system so that they have an
interest in that clearing system. The board appoints them.
▲
Associate members
Associate members are individuals or organisations interested
in payments arrangements that wish to be kept informed of
developments. No specific criteria are required but associate
members cannot be eligible for participating membership.
represented on the management
committee of each of the systems in
which they participate’
Representation on the CECS management committee has
been structured differently to reflect a more open set of
membership criteria. Participation is not institutionally based.
Any organisation that acquires ATM or EFTPOS transactions
or issues instruments generating such transactions can join the
system, as can retailers that switch EFTPOS transactions directly
to issuers (‘merchant principals’). Representation is largely based
around having 5% or more of transactions, rather than being of
a certain type of institution. The only institutional reference is
to protect the representation rights of building societies, credit
unions and the Reserve Bank. Consistent with the way CECS is
structured, it is intended that the company’s constitution will be
amended largely to remove the relevance of institutional status
for owner membership and for representation on the board.
C ORPORATE
STRUCTURE
BOARD
A SSOCIATE M EMBERS
S HARE M EMBERS
CEO & M ANAGEMENT
M ANAGEMENT C OMMITTEES
BECS
APCS
APCS
A DVISORY
C OUNCIL
BECS
A DVISORY
C OUNCIL
BECS
PARTICIPATING
M EMBERS
CECS
A DVISORY
C OUNCIL
CECS
PARTICIPATING
M EMBERS
ANNUAL REPORT 2001
APCS
PARTICIPATING
M EMBERS
HVCS
CECS
HVCS
PARTICIPATING
M EMBERS
5
Advisory councils
O VERVIEW
It was a challenging task to establish advisory councils. But it
was always recognised that it would be a larger challenge to
integrate them successfully into APCA’s decision-making processes.
Last year was the first full year in which councils were operating.
Significant progress has been made. Councils are now working
in a much more integrated fashion with management committees
than was the case twelve months ago.
before management committees and, in turn, APCA participating
members’ understanding of the potential implications for
stakeholders of particular issues.
We expect the role of advisory councils to develop further.
There is scope for them to be pro-active in bringing emerging
issues to the attention of the management committees, and
therefore in playing a larger part in determining the future
direction of payments systems
under APCA’s management.
‘Councils identified the need
A snapshot of some of the work
of the individual councils during
become involved in specialist
the year is provided below.
At the beginning of the year
councils and management
committees reviewed how
to
their initial processes had
been working. This review
working groups
resulted in a ‘statement of
operating strategies and
management
processes’ that was endorsed
by the councils, management
committees and board. The review has been valuable in
clarifying expectations, and in strengthening the consultative
links between councils and management committees.
The councils identified the need to become involved in specialist
working groups that report to management committees. This
has provided an important avenue for early input into the
decision-making process.
AUSTRALIAN PAYMENTS CLEARING ASSOCIATION
Councils’ increased involvement at working group level has
improved both council members’ understanding of the issues
Advisory Council Chairmen
(left to right):
Michael Aaron (CECS),
Kerry Johnston (APCS),
Suzi Bennett (BECS).
6
that report to
APCS A DVISORY C OUNCIL
committees’
The APCS Advisory Council took
part in the project reviewing how
imaging might be used to improve
the efficiency of paper clearing. Two council members participated
on the business project imaging working group, and two council
representatives on the technical working group developing
image interchange standards.
The council was represented on the cheque fraud working group.
It also provided an expert view to the document printing
standards sub-committee, contributing to the sub-committee’s
understanding of the likely impact of proposed changes to the
MICR encoding standard for cheques.
BECS A DVISORY C OUNCIL
CECS A DVISORY C OUNCIL
The BECS Advisory Council worked alongside the management
committee to identify key issues for the BECS strategic review,
and to formulate the agenda for the one-day workshop conducted
as part of that review. The council is participating on the specialist
working group developing the workshop’s key findings.
The CECS Advisory Council participated in the work in the
lead up to the system’s establishment in December 2000 and has
since been involved, among other things, in issues related to debit
card standards and to fall-back arrangements. In respect of
fall-back arrangements, the council is represented on a specialist
working group appointed by the management committee.
APCS ADVISORY COUNCIL
BECS ADVISORY COUNCIL
CECS ADVISORY COUNCIL
Kerry Johnston
Chairman
EDS
Suzi Bennett
Chairman
Secure e-Solutions
Michael Aaron
Chairman
IBM
Michael Aaron
IBM
Michael Aaron
IBM
Erik Andersen
First Data Resources
Harry Asquith
Australian Taxation
Office
Harry Asquith
Australian Taxation
Office
Peter Blackett
Cashcard
Ken Carville
First Data Resources
Peter Blanchard
Tradegate Australia
Mark Bennetts
Shell Australia
John Crouch
UPS
Phil Canaway
Cashcard
Richard Fleming ERG
Alasdair
Drummond
Unisys
Leon Cleal
Vodafone
Paul Hardcastle
Telstra
Greg King
Thomas Cook
Cliff Davis
Telstra
Matthew Heap
NCR
Barbara Lindorff Prismac Systems
Keith Finkelde
IFSA
Wayne
Jorgensen
MasterCard
Tony Pennington NCR
Todd
McDonough
ADP Employer
Services
Glenn Pitt
Visa
Terry Stephens
Australia Post
Lynette Seeto
Centrelink
Warren Scheuber Hypercom
Glenn Tattersall
Equifax
Brett Thompson
Eracom
Penny Winn
Woolworths
ANNUAL REPORT 2001
7
Operations
Australian Paper Clearing System
Average Value of Cheques
per Day
(in $billions)
I MAGING
Imaging has potential to increase
the efficiency of cheque clearing,
particularly by supporting the
truncation of paper. Imaging
technology is being used now
to some extent in cheque
processing. At issue is whether
its use can be further developed
in a cost-effective way.
Average Number of Cheque
Transactions per Day
(in millions)
Cheques remain important but their use is falling. Over the
past four years cheque payments have fallen in number by
over 25% and in value by around two thirds. The fall is more
marked when measured against the strong growth in the number
and value of payments made using credit and debit cards and
direct entry.
2001
C HEQUE & PRINTING STANDARDS
Changes to cheque design specifications were made to improve
the security features on cheques. The changes were published in
summary form on APCA’s website and now form part of APCA’s
publication Design Specifications for Cheques and Deposit Forms.
2.7
2000
3.1
1999
3.2
1998
3.7
1997
3.7
2001
8.3
The specialist sub-committee that
develops standards for cheques
and other documents cleared in
the APCS has begun preparing a
series of ‘best practice’ guidelines
on cheque printing. It is intended
that these will help commercial
printers in cheque design and in
meeting printing standards, as well
as helping financial institutions
in their approval processes for
cheque design and printing.
AUSTRALIAN PAYMENTS CLEARING ASSOCIATION
2000
9.7
A model based around the
R EGISTERS
exchange of images was
1999
12.3
developed and tested for
Cheques issued by APCS members
1998
14.6
viability through a survey of
must comply with the standards
APCS members. While the
specified in the publications
1997
24.9
survey did not produce sufficient
Design Specifications for Cheques
support for the model in
and Deposit Forms and the MICR
question, it did point to the
book. To help printers, APCS
possible viability of a model based around image access. The
members and their customers, we maintain registers relating
survey also highlighted the need to reduce the current incidence
to printing standards.
of paper that is not being captured electronically, as a prerequisite
▲ Printer Registration Database. This database contains
for the introduction of imaging in the clearing process.
organisations that print and MICR encode cheques for
At the last count, 4.7% of paper items were being presented
others or for their own use.
by physically exchanging the items ‘for value’, and not by
▲ Register of Paper for MICR Encoded Documents. Manufacturers
electronically exchanging particulars. The potential efficiencies
or suppliers of paper may submit results of tests of their paper
of imaging depend on substantially reducing this number of
against the ‘APCA paper standard’ for review by APCA. Where
‘for value’ exchanges.
review of test results shows compliance with the standard,
Work is proceeding to investigate and remedy the rejection of
the paper is included on the register. During the year, five
items in the electronic capture process and to extend electronic
additional papers produced by two paper manufacturers
capture and presentment to credit items. Currently only debit
were added to the register.
items, mainly cheques, are electronically presented.
▲ Register of MICR Printing Systems. APCA evaluates MICR
At the same time, work is proceeding to assess the feasibility of
encoding equipment to determine whether it produces
a business model based around access to images. In this model,
encoding of an acceptable standard. This standard and the
images would be archived at the point of capture, with access
processes for evaluation are set out in the MICR book. One
provided to drawee financial institutions across a fast and
new printing system was included in the register during
secure communications network.
the year.
Standards for image interchange
As part of the imaging project, standards for image interchanges
were developed for non-time-critical batch exchanges. These
standards will be available to APCS members if they wish to
use them for bilateral exchanges.
8
Bulk Electronic Clearing System
BECS covers direct entry credit and debit payments. Direct
entry is a cost-effective system for handling high volumes of
mostly low value payments, which are bundled together for
processing and exchange.
not detract from the convenient and low cost nature of the system.
The workshop’s key findings are forming the basis of a feasibility
study that will set the direction BECS will take.
Number of Direct Entry
Debit Users
(as at 30 June)
Number of Direct Entry
Credit Users
(as at 30 June)
CANCELLATION PROCESSES
The strengths of the system are its cost-effectiveness and the
convenience it provides to
organisations and individual
customers in, for example,
2001
142,850
receiving wages or paying bills.
2000
124,638
These strengths have underpinned substantial growth
1999
103,244
in the number of direct entry
1998
86,610
payments in recent years. In
1997
68,557
the past year, based on May
figures, the number of direct
debit payments increased by
36% and direct credits by 40%.
2001
7,272
The growth in the number of
2000
5,726
payments was in part a reflection
1999
4,499
of the increase in the number of
organisations using the system.
1998
3,435
Over the year to end June, the
1997
2,594
number of billing organisations
using direct debit increased by
27%, the number using direct
credit increased by 14%.
FOR DIRECT DEBIT AUTHORITIES
Customers sometimes request
their financial institution to cancel
a direct debit authority (called
a DDR) they had given a billing
organisation. We made changes
to tighten and standardise the
procedures that are to be followed
by financial institutions and billing
organisations in this situation.
These changes to BECS procedures
came into effect in mid July 2001.
They were made promptly, in
response to concerns raised about
the effectiveness of the existing
cancellation processes.
C OMMONWEALTH
G OVERNMENT PAYMENTS
Commonwealth Government
agencies now have the ability
to put their direct entry business
to competitive tender. Because
‘Workshop participants
S TRATEGIC REVIEW
Commonwealth agency direct
An important focus of last year’s
credit files are structured somewhat
endorsed BECS supporting a wider
work was a strategic review of
differently from other files, we
BECS, to determine whether,
amended the BECS procedures
range of payments’
and to what extent, the system
to accommodate these differences.
might be used to support a wider
These amendments, which have
range of payments. A one-day workshop was held in April as
been authorised by the ACCC, facilitate all BECS members
part of this review. The workshop provided insight about the
being in position, if they wish, to tender for the business.
types of payments that BECS might support
in the future, and about the needs and
preferences of organisations using direct
entry. Workshop participants included
representatives of organisations from both
the private and public sectors which use
direct entry for direct debit payments or
for making direct credit payments. Workshop
participants endorsed BECS supporting a
wider range of payments, provided this did
ANNUAL REPORT 2001
(left to right):
Natalie Harrison, receptionist;
Jane Henderson, Office Manager;
Maria Sourris, Team Secretary.
9
Operations c o n t i n u e d
Consumer Electronic Clearing System
Number of EFTPOS Terminals
(see Note (h) page 2)
The CECS membership rules
demonstrate how APCA is
becoming a more open and
inclusive organisation, in
keeping with the changing
payments environment. The
CECS rules admit to voting
membership any corporate
that either acquires ATM
or EFTPOS transactions or
that issues cards generating
transactions that are acquired.
The rules also extend
membership to retailers that
capture EFTPOS transactions
and switch them directly to
issuers. This category of member
is called a merchant principal
and allowed Coles Myer to
become one of the 15 initial
members of the system.
Number of ATM Terminals
(see Note (h) page 2)
CECS ESTABLISHED
APCA’s coverage of all four clearing systems, as originally
planned, was completed last year with the establishment of CECS
in December 2000, following authorisation by the ACCC.
Establishing CECS puts APCA
in position to operate with
authority in respect of the rules
2001
governing the exchange of
2000
ATM and EFTPOS transactions.
AUSTRALIAN PAYMENTS CLEARING ASSOCIATION
11,949
10,818
1999
9,387
1998
8,814
1997
8,182
2001
349,646
2000
If for any reason an EFTPOS
transaction cannot be authorised
and completed on-line, the
merchant reverts to a fall-back
mode. We are examining this
situation, along with other
contingency situations, to
ensure that the procedures in
place are as effective as possible
and that they are regularly
reviewed to ensure they
remain current.
320,372
1999
265,391
1998
218,330
1997
164,199
‘Work is under way to
add separate card issuer standards
to the CECS Manual’
Managing CECS involves, among other things, setting policies
and procedures to maintain the efficiency and integrity of the
ATM and EFTPOS networks, setting operational procedures
and message protocols between acquirers and issuers, and setting standards for the end-to-end security and integrity of
messages and PINs.
10
Through this committee structure we are reviewing a number
of standards relating to the information content on debit
cards. The CECS Advisory Council played a significant role
in initiating this review.
S TRONG GROWTH
The numbers of EFTPOS and ATM transactions are continuing
to grow strongly. Withdrawals at ATMs jumped by 32%,
comparing May 2001 survey figures with those of May 2000.
Correspondingly, EFTPOS transactions grew by a little over 10%.
E FFICIENCY AND INTEGRITY
Standards development in CECS is undertaken by a standards
committee, which reports to the management committee.
Two technical committees that specialise in security matters
and message formats support the standards committee.
The CECS Manual, which sets
out the minimum technical
requirements for operating in
the system, will be regularly
reviewed and updated to
improve efficiency and provide
for technological changes.
Work is under way to add
separate card issuer standards
to the CECS Manual.
M ESSAGE
STANDARDS
FOR DIRECT CHARGING
In October 2000 the Reserve
Bank and the ACCC released a joint study into credit and
debit card interchange fees and access. One of the issues
discussed in the study was direct charging at ATMs (where
ATM owners – acquirers – charge cardholders directly) as
an alternative to the current practice where acquirers charge
issuers an interchange fee.
APCA does not set policies for the level of transaction fees
and charges nor the way they are levied. However, we do set
message formats, including message formats covering charging.
The CECS Management Committee has therefore commissioned
work to assess the feasibility of new message formats that would
provide for direct charging for any CECS members choosing
this method.
High Value Clearing System
New message types
A high proportion of the value of payment transactions
New SWIFT message types will be added to the HVCS
exchanged between financial institutions in Australia is settled
procedures. The new SWIFT messages (MT103 and MT103+)
through the Reserve Bank’s RTGS system. This is in the order
are designed to support STP.
of 92% according to the Reserve Bank. SWIFT/PDS transactions
account for the majority part of
Both the Reserve Bank and HVCS
this value (around two thirds).
‘The HVCS rules were
members have tested the new
Based on May 2001 figures, the
message types. HVCS members
value of SWIFT/PDS transactions
amended to accommodate
will need to be capable of receiving
was $83.2 billion per day
these new messages by 17 November
compared with $72.6 billion
CLS Bank’
2001, and will need to be capable
in May 2000. The average
of sending them by 2003, when
transaction value was $5.6
the current corresponding message (MT100) will be removed
million in May 2001.
from use.
S TRAIGHT T HROUGH P ROCESSING (STP)
Processing by account number
STP is where payment messages are automatically relayed or
applied, with attendant confidence that the message is complete
and correctly identifies the beneficiary. Manual intervention to
repair or reconstruct payment messages lessens efficiency and
increases the chance of error. STP effectively requires reliance to
be placed on the correctness of the beneficiary’s account number.
C ONTINUOUS L INKED S ETTLEMENT (CLS)
CLS is a multinational arrangement to settle both legs of foreign
exchange transactions simultaneously, across the books of CLS
Bank, in order to eliminate foreign exchange settlement risk.
Major banks around the world established CLS Bank.
Operations of the bank are planned to start in the near future
with seven initial currencies, including the Australian dollar.
To facilitate STP, the HVCS rules were amended to put
responsibility for the correctness of account numbers with the
sending institution. Where the account number provided proves
to be incorrect, the receiving institution will have recourse to the
sending institution for any loss or claim made against it for that
particular transaction, whether the claim is made by the intended
beneficiary, the originator of the payment or another party.
The HVCS rules were amended to accommodate CLS Bank.
It is expected that the bank will become a participating member
of the HVCS this financial year. The bank has completed
membership requirements, including certification testing.
Trials are planned for CLS Bank and a limited number of HVCS
participating members prior to the bank joining the system.
ANNUAL REPORT 2001
(left to right):
Angelina Maurice, Operations Assistant;
Gavin Bollard, IT Manager;
David Leong, Senior Manager Operations.
11
Operations c o n t i n u e d
Cross System
N EW INTER - ORGANISATION COMPENSATION RULES
New Standard Inter-Organisation Compensation Rules were
introduced to calculate compensation when a payment is made
on a day other than the day agreed, or is made to the wrong
account or person. The rules came into effect on 13 June 2001 in
APCS, BECS and HVCS.
The rules will lead to greater simplicity and efficiency across
the finance industry because they standardise the approach for
calculating compensation. They can be applied in any clearing
and settlement system whose participants settle with each
other by adjusting their exchange settlement accounts held at
the Reserve Bank. It is expected that they will be applied to
transactions that occur outside the APCA clearing systems.
The finance industry has used a range of different compensation
rules depending largely on the nature of the underlying transaction.
For example, compensation rules differed across APCA’s clearing
systems. The range of compensation rules sometimes led to confusion
about which rules should be applied, and encouraged ‘forum shopping’
for the rules offering best advantage.
A standard approach means that the rules can be applied regardless
of a payment’s original source or ultimate destination, whether foreign
or domestic, regardless of whether the transaction involves
RTGS funds or non-RTGS funds, and regardless of the nature
of the underlying transaction that gives rise to the payment.
AUSTRALIAN PAYMENTS CLEARING ASSOCIATION
The new rules will not prevent any APCA member from agreeing
different compensation rules with another member. However, if
an agreement can’t be reached, the APCA rules apply.
12
(left to right):
Mike Forey, Director, Project Manager & Operations;
Peter Itowski, Project Manager, ATM/EFTPOS;
David Ryan, Business Project Manager.
PKI P ROJECT
The project to build an APCA PKI was completed in early
2001. Policy and practice documentation was finalised and
attendant hardware and software put in place.
The completion of the project gives APCA the ability to issue
digital certificates to its participating members and for members
in turn to issue certificates to their customers. Whether and to
what extent the service will be used is at this time conjectural.
Four banks in Australia have joined Identrus – the international
PKI – and it seems likely this will be the vehicle to support any
industry-wide B2B payment arrangements.
It is possible that the APCA PKI will have some role to play in
the Australian payments system, even if a more limited one than
might have been the case in the absence of Identrus. This remains
to be played out.
B ENCHMARKING
We have begun the exercise of benchmarking Australian payments
clearing. The purpose is to create ongoing measures of the
performance of the various APCA clearing systems through
time and against international benchmarks.
(left to right):
Caroline Corder, Research Analyst;
George Fisher, Communications Manager;
Scott Wheeler, Head of Strategy;
Jo-Anne Ryan, Director Public Affairs.
Detailed rules covering FTS in the HVCS are in place, and have
been given the protection of the Payment Systems and Netting
Act. This is not yet the case with the APCS and BECS FTS rules.
F RAUD PREVENTION
Payments fraud is of increasing concern worldwide as well as
for APCA’s members. During the year we reviewed our role in
fraud prevention.
Following this review, the board established an APCA-wide fraud
committee. The committee’s responsibilities potentially cover all
clearing systems, and it has absorbed the work of the specialist
cheque fraud group established during the previous year.
We are currently reviewing the HVCS FTS rules to prepare for
CLS Bank becoming a member of HVCS. Account needs to be
taken of the effect the bank’s membership may have on the
relative loss shared by participating members (excluding CLS
Bank) if there were to be an FTS event.
The committee is responsible for developing a range of procedures
and recommendations aimed at improving the detection
and prevention of payments related fraud.
The APCS FTS rules were completed during the year. They
have been authorised by the ACCC and have been submitted
to the Reserve Bank for approval under both the Netting and
Cheques Acts. (The relevant provision in the Cheques Act deals
with the deemed dishonour of
drawn on a ‘failed’
compensation rules cheques
financial institution.)
BECS FTS rules are under review.
ANNUAL REPORT 2001
FAILURE T O S ETTLE (FTS)
APCS and BECS, and HVCS in
‘The new
fall-back mode, have provisions
that apply in the unlikely
will lead to greater simplicity
event of an institution failing
to settle for its payments
and efficiency across the
clearing obligations. These
FTS provisions are designed
finance industry’
to ensure that a revised
settlement proceeds and that
the payments system continues to operate seamlessly, so far as
is possible. The FTS provisions in the APCS and in BECS were
put in the form of principles pending the enactment of legislation
protecting multi-lateral netting.
13
Operations c o n t i n u e d
I NDUSTRY SUBMISSIONS
APCA contributed to public debate on the payments system
during the year through a number of submissions.
Real-Time Fee Disclosure at ATMs
In February 2001, the Parliamentary Joint Sub-Committee on
Corporations and Securities released a Report on Fees on Electronic
and Telephone Banking. We provided a response to the Minister
for Financial Services and Regulation on the aspects of the
report that related to real-time fee disclosure at ATM and
EFTPOS terminals.
In April 2001, ASIC released a Draft Guide to Good Transaction
Fee Disclosure for Banks, Building Societies and Credit Unions.
APCA made a submission on those aspects of the draft guide that
related to real-time fee disclosure at ATM and EFTPOS terminals.
It was proposed in both the above report and draft guide that
information about the fees applying to an ATM transaction
should be made directly available to customers at the time of the
transaction. This is known as real-time fee disclosure.
Our interest in this matter is related to APCA’s role in setting
message standards and formats. Our submissions pointed to
the complexity of gathering and transmitting the information
required for real-time fee disclosure, and the attendant costs
and time that would be involved before something approaching
real time fee disclosure could be put in place. We intend working
with our CECS members and with ASIC to find a way through
that is satisfactory to all parties.
AUSTRALIAN PAYMENTS CLEARING ASSOCIATION
Direct Debit
An issues paper released in March 2001, as part of the Review
of the Code of Banking Practice, contained a number of
recommendations relating to direct debit processes as they
affect consumers. APCA made a submission on the direct debit
matters raised in this paper. One of the important points we
made was that matters related to direct debit could be handled
best through BECS rules rather than through the Code of Banking
Practice. BECS rules cover all financial institutions providing direct
debit services, are in the form of a binding contract, and go to
the detail rather than to broad principle.
14
Financial Service Reform
Changes to the exposure draft Financial Services Reform Bill
took into account submissions APCA made during the year
to Federal Treasury and to the Federal Parliamentary Joint
Sub-Committee on Corporations and Securities. APCA activities
are not encompassed by the Bill.
I NDUSTRY
REPRESENTATION
APCA participates in a number of forums.
▲
ISO/TC68/SC6/Working Group 6, developing standards
for security in retail banking.
▲
Standards Australia Committee IT/5, developing standards
for financial transaction systems.
▲
Standards Australia Working Group IT/5/4, developing
standards for authentication and security.
▲
Standards Australia IT 12/4/1, developing standards for
an Australian public key authentication framework.
▲
Certification Forum of Australia, promoting electronic
commerce by facilitating the co-operative development of
a national infrastructure for trusted certification activities.
▲
Payments System International Conference Planning
Committee. A committee that organises an international
payments conference each two years.
Corporate governance
T HE
BOARD OF DIRECTORS
The board is responsible for the company’s corporate governance
and setting the company’s strategic direction. The board
comprises ten non-executive directors and the chief executive
officer. Other than the chairman, the non-executive directors
are nominee directors, and appoint a deputy chairman from
among their number.
Each of the five ordinary shareholders and four preference
shareholding classes appoint one director. The term of each of
these directors expires every second year.
C HAIRMAN
OF THE BOARD
The chairman holds office for two years from the date of
appointment, and may be re-appointed by the board. A nominee
director may not simultaneously hold the office of chairman of
the company.
In July 2001, the board re-appointed the current chairman,
Mr R N Challis, for a further term of two years from
21 October 2001.
C HIEF
EXECUTIVE OFFICER
The board appoints the chief executive officer (CEO) to manage
the company’s affairs.
The broad duties and responsibilities of the CEO are set by the
board. The CEO’s goals for each year are agreed by the board in
consultation with the CEO, whose performance against the
goals the board assesses annually.
Finance and Audit Committee
The Finance and Audit Committee’s charter includes reviewing
internal financial practices and external audits, monitoring
the effectiveness of financial practices and controls and
administrative policies, monitoring risk exposures and statutory
compliance, and reviewing the budget and monitoring expenditure
against it. It is also responsible for recommending to the board
the appointment of the company’s auditors. The Finance and
Audit Committee comprises four non-executive directors
(Mr C S Moore, Mr B F Munro, Mr S P Straney and Dr J M Veale)
and the chief executive officer.
Remuneration Committee
The Remuneration Committee comprises the company chairman
and the members of the Finance and Audit Committee. The
Remuneration Committee’s main responsibilities are to recommend
remuneration policies and practices for the company generally
and to recommend remuneration levels and contractual
arrangements for the chief executive officer.
R ISK
In addition to a financial audit, the company has an annual
external extended audit to test adherence to accounting policies.
The board reviews reports of both audits.
C ODE
B OARD
COMMITTEES
The company’s management committees for each of the clearing
systems are delegated committees of the board. The board has
also established two permanent committees to assist it in fulfilling
certain of its responsibilities. These are the Finance and Audit
Committee and the Remuneration Committee. The board can
also establish other committees as it sees fit to assist in managing
the company’s affairs. It has established an ad hoc FTS Committee
and established a Fraud Committee during the year.
MANAGEMENT
Each year the board approves the company’s budget and
operational plan. This allows the board to monitor the strategic
direction the company is taking and to evaluate operational
risk and ensure it is effectively managed.
OF CONDUCT
A Directors’ and Officers’ Code of Conduct is in place, applying
to all directors, management committee members and senior
executive staff. The code was based on a model from the Australian
Institute of Company Directors, which generally reflects directors’
duties under the law, and was modified to suit APCA’s role as
an industry body.
APCA’s staff are required to adhere to a code of conduct providing
guidelines on confidentiality, conflict of interest and standards
of behaviour in business dealings.
F INANCIAL
STATEMENTS
ANNUAL REPORT 2001
The company’s financial statements are published separately.
Remuneration for the chairman, the chief executive officer (as a
director of the company), and senior executives, is disclosed in
the notes to the financial statements.
15
Management
APCA management runs the daily affairs of the company, ensures
that compliance obligations are met, supports the company’s
committee structure, manages operations and projects, and
develops strategy. From time to time, APCA supplements its
permanent staff resources by using contractors for specific
project-related tasks.
During the year, a new public affairs area was established to
enable management to broaden services to members and wider
stakeholders and to support APCA’s engagement in community
debate on the development of payments clearing.
E XTRANET AND WEBSITE
We continued to develop APCA’s extranet and website to
improve communication with stakeholders. Regulations and
Procedures for all four clearing systems are now available
on-line on the extranet. Secure access to the extranet is available
to directors, members of management committees and advisory
councils, and operational contacts. The Regulations and
Procedures, except for a small subset for security reasons, were
also made available on APCA’s website.
APCA’s extranet is accessed around 160,000 times a year, and
the website around 60,000 times a year. About one third of
website users are located in Asia and North America.
AUSTRALIAN PAYMENTS CLEARING ASSOCIATION
K EEPING MEMBERS INFORMED
As well as using the extranet and website to keep members
informed, we also produce a quarterly newsletter, Payments
Monitor. Its purpose is to inform members and other interested
parties of payments clearing developments. A new electronic
16
(left to right):
Elsa Roberto, Senior Records Officer;
Rhonda Hunter, Information Officer;
Ben Cato, Financial Controller.
newsletter updating members on more detailed changes across
all clearing streams, published from September 2001, will be
issued every second month.
D ISTRIBUTING MATERIAL ELECTRONICALLY
We increased our use of electronic communication for receiving
communication from and distributing it to our members. We
are using secure access to APCA’s extranet to deliver the material,
with members alerted to new material by email. All committee
and operational memorandums are delivered this way.
Amendments to Regulations and Procedures are also sent
by email instead of by mailing out replacement pages.
Members can now provide us with notices of processing
difficulties electronically and these are then circulated to
members electronically.
Publication 11.5 and the MICR book (publication 3.3) are now
available electronically in PDF format and can be downloaded
free of charge. Updates and amendments for these can be received
by email. Details are on our website (www.apca.com.au).
S TAFF PERFORMANCE
We have an appraisal system that recognises and rewards staff
according to their performance. This contributes to more
effective management and better productivity.
M ANAGEMENT
STRUCTURE CHART
Board
CEO
Peter Smith
S ECRETARIAT &
M EMBER S ERVICES
L EGAL S ERVICES
I NFORMATION M ANAGEMENT
Stephen Halliday
Hayley Lock
(vacancy)
Stephen Hills
Kimberley Chan
Trish McGinness
Rhonda Hunter
Elsa Roberto
▲
Board, Committee &
Advisory Council support
▲
Clearing system compliance
▲
Legal
▲
Research support
▲
Company secretariat
▲
Member database
▲
ACCC liaison
▲
Records
▲
Library
F INANCIAL C ONTROL ,
IT S UPPORT &
A DMINISTRATION
P UBLIC A FFAIRS
P ROJECT M ANAGEMENT,
O PERATIONS /S TRATEGY
Ben Cato
Gavin Bollard
Natalie Harrison
Jane Henderson
Katherine Mair
Maria Sourris
Jo-Anne Ryan
Caroline Corder
George Fisher
Mike Forey
Suzi Mildern
Allison Keogh
David Leong
Angelina Maurice
Jacqueline Mellor
David Ryan
Scott Wheeler
Administration
▲
Stakeholder relations
▲
Project management
▲
IT services
▲
▲
▲
Financial services
Advisory Council
management
Clearing system
operational support
▲
Member billing
▲
Public relations
▲
Strategy
▲
Payroll
▲
Publications
▲
Property
▲
Research
▲
Website
ANNUAL REPORT 2001
▲
17
Directors
The names of APCA directors in office at the date of this report are set out below, together with particulars of their qualifications,
experience and special responsibilities.
Mr R N Challis
Dip Bank, FAIB, ABINZ
Chairman
(Non-executive director)
Over forty years’ banking
experience with the Australia and New Zealand Banking Group
Limited. Retired in 1997, having occupied a number of general
manager positions and directorships on several ANZ subsidiary
and associated companies. Chairman of Austraclear Ltd
1990-94. Appointed as a director and Chairman of the Company
in October 1999. Chairman of the Remuneration Committee.
Mr P A Inglis BEc(Hons)
(Non-executive director)
Head, Payments Industry Liaison
& Management, Technology,
eTransformation & Shared Services,
Australia and New Zealand Banking Group Limited. Over
fourteen years’ experience in the banking industry in payments
and economics; five years in government service, including
Federal Treasury. Appointed by the Australia and New Zealand
Banking Group Limited as a director in July 1998. Chairman,
Management Committee of the High Value Clearing System (CS4).
Mr M S Genovese
(Non-executive director)
General Manager Financial Services
and Sales, Credit Union Services
Corporation (Australia) Limited.
Over twenty years’ experience within the credit union industry.
Positions held include general manager roles of two credit
unions, Head of Regional, Rural and International Credit Union
Development. Appointed by the ‘D’ class redeemable preference
shareholders (credit unions) as a director in June 2001.
AUSTRALIAN PAYMENTS CLEARING ASSOCIATION
Mr D C Gregg BA Sc, MBA
18
(Non-executive director)
General Manager, Electronic
Solutions and Services, St George
Bank Limited. Responsible for
electronic banking services (ATMs, Debit Cards & Credit Cards,
EFTPOS, BPAY and Internet Banking). Over eleven years’
experience in the banking industry in both Australia and Canada
which included two years as CEO of Mondex Australia Pty Ltd
and seven years as General Manager of Canadian Imperial
Bank of Commerce. Other directorships include Cardlink
Services Ltd, EPP Ltd and BPAY Pty Ltd. Appointed by the
‘A’ class redeemable preference shareholders (state and regional
banks) as a director in October 2000.
Mr B J Mecklem
(Non-executive director)
General Manager, Global Payment
Systems, National Australia Bank
Limited. Over thirty five years’
experience in the Australian banking industry gained in a broad
spectrum of appointments. Chairman Mondex Australia Pty
Limited. Chairman, Mondex Australasia Pty Limited.
Chairman, Australia Risk & Origination Committee, Mondex
Australia. Alternate director, BPAY Pty Ltd. Alternate director,
Cardlink Services Limited. Chairman, World Automated
Transaction Clearing House Ltd UK. Member, Cross Border
Payments Council, NACHA, USA. Appointed by the National
Australia Bank Limited as a director in October 1993.
Chairman, Management Committee of the Consumer
Electronic Clearing System (CS3).
Mr C S Moore
(Non-executive director)
Vice President, Financial
Institutions Group, Citibank
Limited (until July 2001). Over
twenty years’ experience in the banking industry in Australia.
Appointed by the ‘B’ class redeemable preference shareholders
(other banks) as a director in March 1997. Chairman,
Management Committee of the Australian Paper Clearing
System (CS1). Member of the Finance and Audit Committee
and the Remuneration Committee.
Mr S P Straney
BA, GradDipAppFin (SIA)
(Non-executive director)
Head of Payment Instruments,
Banking and Financial Services,
Westpac Banking Corporation. Thirteen years’ experience
in the banking industry, mostly in cards, merchant acquiring
and cash management. Responsibilities cover payments
across business and corporate customers, including industry
representation, strategic direction and system ownership.
Alternate director of BPAY Pty Ltd and Cardlink Services Ltd.
Appointed by Westpac Banking Corporation as a director
in May 2001. Member of the Finance and Audit Committee.
Mr B F Munro
BBus, FAIB, MFTA
Deputy Chairman
(Non-executive director)
Global Head of Transaction
Services, Institutional Banking,
Commonwealth Bank of Australia.
Over twenty years’ experience in banking, including financial
and capital markets, wholesale payments and related areas.
Appointed by the Commonwealth Bank of Australia as a
director in May 1998. Chairman, Management Committee of the
Bulk Electronic Clearing System (CS2), Chairman of the Finance
and Audit Committee, and member of the Remuneration Committee.
Mr J N Toms BComm
(Non-executive director)
Chief Executive Director,
Australian Association of
Permanent Building Societies
Incorporated and Chief Executive Officer, AAPBS Settlements
Limited. Over seventeen years’ experience in areas of industry
policy, particularly payment systems. Director of National
Custodian Limited. Appointed by the ‘C’ class redeemable
preference shareholders (building societies) as a director in
December 1992.
Dr P R Smith
BEc(Hons), PhD, FAICD
Chief Executive Officer
Dr J M Veale
DipEd., BA(Hons), MEc, PhD
(Non-executive director)
Head of Payments Policy
Department, Reserve Bank of
Australia. Ten years in academic positions in Australia and
the United Kingdom, and over seventeen years’ experience
in Australian central banking. Appointed as a director in
January 1998. Member of the Finance and Audit Committee
and the Remuneration Committee.
ANNUAL REPORT 2001
(Executive director)
Thirteen years’ experience in
the banking industry prior to joining APCA, two years
in government service in Papua New Guinea, and academic
appointments in the Universities of Western Australia and
Adelaide. Appointed as Chief Executive Officer since the
company started in February 1992 and as Executive Director
in April 1992. Member of the Finance and Audit Committee
and the Remuneration Committee.
19
Share and participating members
APCA M EMBERSHIP
(as at 30 June 2001)
S HARE
M EMBER
Australia and New Zealand
Ordinary
PARTICIPATING MEMBER
CS1 CS2 CS3 CS4
▲
▲
▲
▲
Banking Group Limited
Commonwealth Bank
Ordinary
▲
▲
▲
▲
National Australia Bank Limited
Ordinary
▲
▲
Reserve Bank of Australia
Ordinary
▲
▲
▲
▲
Bananacoast Community Credit
▲
▲
Bank of Cyprus Australia Pty Limited
▲
▲
▲
Bass & Equitable Building Society Ltd
▲
Westpac Banking Corporation
Ordinary
▲
▲
▲
▲
▲
Coles Myer Ltd
Adelaide Bank Limited
A Class
▲
▲
▲
▲
Credit Suisse First Boston
Bank of Queensland Limited
A Class
▲
▲
▲
▲
CreditLink Services Ltd
Bank of Western Australia Limited
Bendigo Bank Limited
A Class
▲
▲
▲
▲
Dresdner Australia Limited
A Class
▲
▲
▲
▲
First Australian Building
St.George Bank Limited
Suncorp-Metway Limited
A Class
▲
▲
▲
▲
A Class
▲
▲
▲
▲
GIO Building Society Limited
ABN AMRO Bank, NV
B Class
▲
Greater Building Society Limited
▲
AMP Bank Limited
B Class
▲
▲
▲
Heritage Building Society Limited
▲
Arab Bank Australia Limited
B Class
▲
▲
▲
Home Building Society Ltd
Bank of America National Association
Bank of China
B Class
▲
▲
▲
Hume Building Society Limited
▲
B Class
▲
▲
▲
Hunter United Employee’s Credit
▲
Bank of Tokyo-Mitsubishi
B Class
▲
▲
▲
▲
B Class
▲
▲
▲
▲
▲
▲
▲
▲
▲
▲
Society Limited
▲
▲
▲
▲
▲
Union Limited
Illawarra Mutual Building
▲
▲
Society Limited
BNP Paribas (formerly Banque
IOOF Building Society Limited
▲
▲
Nationale de Paris)
Laiki Bank (Australia) Limited
▲
▲
Lifeplan Australia Building
▲
Barclays Bank plc
B Class
Citibank Limited
B Class
▲
▲
Deutsche Bank AG
B Class
▲
▲
HSBC Bank Australia Limited
B Class
▲
▲
▲
▲
▲
▲
(formerly Hong Kong Bank
HSBC Bank plc (formerly Midland
Society Limited
Mackay Permanent Building
B Class
▲
▲
▲
Newcastle Permanent Building
B Class
▲
▲
NRMA Building Society Limited
ING Bank (Australia) Limited
B Class
▲
▲
▲
Pioneer Permanent Building
Macquarie Bank Limited
B Class
▲
▲
▲
Morgan Guaranty Trust Company
B Class
▲
B Class
▲
▲
▲
▲
▲
Primary Industry Bank of Australia
▲
▲
▲
Limited
B Class
▲
▲
▲
Corporation Limited
Queensland Police Credit Union
▲
Limited
Overseas Union Bank Limited
B Class
▲
Royal Bank of Canada
B Class
▲
Standard Chartered Bank
B Class
▲
▲
▲
Australia Limited
Queensland Professional Credit
▲
Union Limited
Queenslanders Credit Union
▲
Limited
State Street Bank & Trust Company
B Class
▲
The Asahi Bank, Limited
B Class
▲
▲
The Chase Manhattan Bank
B Class
▲
▲
The Dai-Ichi Kangyo Bank, Limited
B Class
▲
United Overseas Bank Limited
B Class
▲
▲
Australian Association of
C Class
▲
▲
▲
▲
▲
▲
▲
▲
▲
▲
Permanent Building Societies
Rabobank, Australian Branch
▲
(Co-operative Centrale
Raiffeisen-Boerenleenbank B.A.)
The International Commercial
▲
▲
Bank of China
The Rock Building Society
▲
Limited
Incorporated (AAPBS)
Toronto-Dominion Bank
Victoria Teachers Credit Union
D Class
▲
▲
D Class
▲
▲
WestLB (Westdeutsche Landesbank
▲
Wide Bay Capricorn Building
(Australia) Limited (CUSCAL)
▲
▲
▲
▲
Limited
Limited (CUSSL)
Girozentrale)
ABS Building Society Ltd
Advantage Credit Union
▲
Co-Operative Limited
(Australia) Limited
Credit Union Settlement Services
▲
Society Limited
Police Association Credit
of New York
Credit Union Services Corporation
▲
Society Limited
IBJ Australia Bank Limited
Oversea-Chinese Banking
▲
Limited
Bank plc)
N.M. Rothschild & Sons
▲
Society Limited
Maitland Mutual Building Society
of Australia Limited)
AUSTRALIAN PAYMENTS CLEARING ASSOCIATION
PARTICIPATING MEMBER
CS1 CS2 CS3 CS4
Union Limited
(Australia) Limited
20
Australian Unity Building
S HARE
M EMBER
Society Limited
of Australia
Bank One National Association
APCA M EMBERSHIP
(as at 30 June 2001)
▲
Society Limited
▲
▲
▲
Corporate information
Published by Australian Payments Clearing Association Limited. Designed and produced by Kannegieter & Jackson.
B OARD
Mr Robert Challis (Chairman)
Dr Peter Smith (Chief Executive Officer)
Mr Donald Gregg
Mr Mark Genovese
Mr Paul Inglis
Mr Brian Mecklem
Mr Chris Moore
Mr Bruce Munro (Deputy Chairman)
Mr Sean Straney
Mr John Toms
Dr John Veale
C OMPANY OFFICERS
Peter Smith
(Chief Executive Officer)
Ben Cato
(Financial Controller)
Mike Forey
(Director Project Management
and Operations)
Stephen Halliday
(Director Member Services and
Secretary to the Board)
Stephen Hills
(General Counsel, Company Secretary)
Jo-Anne Ryan
(Director Public Affairs)
Scott Wheeler
(Head of Strategy)
S OLICITORS
Mallesons Stephen Jaques, Sydney
A UDITORS
PricewaterhouseCoopers, Sydney
R EGISTERED OFFICE
Level 24
25 Bligh Street
Sydney NSW 2000
Telephone: +61 2 9221-8944
Facsimile: +61 2 9221-8057
Web Page: http://www.apca.com.au
C OMPANY MEETINGS
The Annual General Meeting will be held on
Thursday, 1 November 2001 at 9.30am.
The Annual Meeting of APCS will be held on
Wednesday, 21 November 2001 at 9.30am.
The Annual Meeting of BECS will be held on
Tuesday, 27 November 2001 at 9.30am.
The Annual Meeting of CECS will be held on
Thursday, 15 November 2001 at 9.30am.
The Annual Meeting of HVCS will be held on
Thursday, 29 November 2001 at 9.30am.
APCA PUBLICATIONS
▲ BSB numbers in Australia
Issued quarterly and available in either book form or on
computer diskette. May be purchased directly from Craftsman
Publishing Pty Ltd (prices on application).
Craftsman Publishing Pty Ltd
125 Highbury Road, Burwood. Vic 3125
Telephone: (03) 9926 1200
Fax: (03) 9926 1291
Available from APCA (in printed form or as a PDF file from
our website)
▲
Design Specifications for Cheques & Deposit Forms
(publication 11.5)
▲
Magnetic Ink Character Recognition (MICR)
(publication 3.3)
▲
Payments Monitor
A quarterly publication for members and interested parties
that provides an update on payments clearing developments.
Also available:
▲
Glardon Gauges (hand held device for verifying positioning
of MICR encoding)
▲
Payments Information Resources: an international
research guide to sources of information on payments
systems and instruments
A reference guide that contains primary and secondary
sources of information in print and electronic formats,
including published literature (guidebooks, directories
and journals), statistics, terminology and websites.