TMAC Calgary

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TMAC - Calgary
Treasury Management Association of Canada, the
Canadian Payments Association the Stakeholder
Advisory Council (TMAC, CPA, SAC)
February 2006 Ron Matthews
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A little history / context

• Interest FX rates
• Payments volumes values
• TMAC (1980 ish)
• CPA(1980)
• SAC (1996 / 2001)

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Canadian Prime Rates
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CAD T-bill rates
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US / CAD Exchange Rates
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Payment Statistics
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More Payment Statistics
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TMAC Background

• Founded in the late 1970s / early 1980s
• Established to provide a forum for the exchange
  of knowledge, experience views on matters of
  common interest
• Membership did not include financial institutions
• Has evolved to be all inclusive

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CPA Background

• CPA formed by an act of Parliament in 1980
  amended in 2001
• Eligibility for CPA membership is defined in the
  Canadian Payments Act and the related federal
  regulations.
• The Bank of Canada all banks operating in
  Canada are required to be members.
• Credit union centrals, federations of caisses
  populaires, trust companies, loan companies
  other deposit-taking institutions are also
  eligible for CPA membership.
• In 2001, the CP Act expanded the list of eligible
  organizations to include life insurance
  companies, securities dealers that are members of
  the Investment Dealers Association (IDA) or the
  Bourse de Montréal, money market mutual funds
  that meet certain requirements regarding the
  investment of their holdings and have access to
  an immediate and reliable source of liquidity.
• The CPA is now accepting membership applications
  from the newly eligible organizations and
  continues to liaise with their industry
  associations to provide information related to
  membership its application process.

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CPA Background Cont.

• The objectives of the Association are to
• a) establish and operate national clearing
  systems for the clearing and settlement of
  payments...
• b) facilitate the interaction.......with other
  systems.........
• c) facilitate the development of new payment
  methods and technologies
• In pursuing its objects, the Association shall
  promote the efficiency, safety and soundness
• of its clearing and settlement systems and take
  into account the interests of users."
• The CPA Board is made up of 16 directors as
  follows
• 1 from the Bank of Canada appointed by the Bank
  of Canada
• 12 elected from the Association membership
• 3 independent directors appointed by the Minister
  of Finance (GOC)

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SAC Background

• The SAC was formed in 1996 and enshrined in the
  legislation in
• 2001 in the Canadian Payments Act
• The objective of the SAC is
• to provide counsel and advice to the CPA Board
  of Directors on payment, clearing and settlement
  matters, and other related issues.
• The committee thus provides input on proposed
  initiatives, including by-laws, policy statements
  and rules impacting third parties. It also
  assists the CPA in identifying any issues of
  potential concern to payment system users and
  third-party service providers, and suggesting how
  they might be addressed.
• Under the Act the Council is made up of
• a maximum of 20 members and be broadly
  representative of users of the payment system and
  service providers to it

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Current SAC Membership
Chair Ronald MatthewsTreasury Management
Association of Canada(Imperial Oil Limited)
Vice Chair Keith EvansCanadian Gas
Association(Enbridge)
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My role on the CPA / SAC

• Member of the Stakeholder Advisory Council to the
  CPA (1996)
• Elected Chair of the Stakeholder Advisory Council
  in 1999 and re-elected in 2001, 2003 and 2005
• Appointed to the Board of Directors of the CPA
  in 2002 re-appointed in 2003, 2004 and 2005 for
  a three year term

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Recent Initiatives

• Large Value Transfer System (LVTS) (1999)
• Automated Clearing and Settlement
  System(ACSS)(ongoing)
• 25 million dollar cheque ceiling
• Cheque Imaging or Truncation and Electronic
  Cheque Presentment (TECP)
• New cheque standards
• Pre Authorized Debits (PADs)
• Theres always something on the go

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Lets focus on

• LVTS and Straight Through Processing (STP)
• Cheque Imaging / TECP

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ACSS LVTS - Facts and figures (2004)

• ACSS LVTS cleared over 37 trillion (147m/day)
• LVTS
• settled over 33 trillion or 88 of the value
  cleared through the CPA
• volume of transactions was 4.3 million average
  daily value was about 130 billion
• ACSS
• cleared over 4.9 billion items (4.21 trillion)
• 76 were electronic up from 13 in 1990
• Paper items declined from 86 in 1990 to 24 in
  2004

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LVTS STP

• Financial Institution File (FIF)
• Message design
• Back office systems

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Cheque Imaging (TECP)

• The process
• Legislation
• Paper Based Impediments
• The value proposition

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In conclusion / any questions
We have one of the best clearing and settlement
systems in the world But theres always room for
improvement

• Everything you ever wanted to know about payment
  processing is on the CPA web site
• WWW.CDNPAY.CA

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Quiz?

• Do / did you know?
• What does AFT, ACH, MICR, OCR, NSF, LVTS, STP,
  ACSS, FIF, IDA, TECP, Imaging, BEA, and Stored
  Value mean?
• Who has one of the best banking systems in the
  world?
• How many payments get processed in Canada every
  day?
• Do you know how a cheque gets processed?
• Why is that important?
• Which method of payment would you prefer to
  receive and why?
• Cash
• Debit
• Credit
• Cheque
• LVTS