FED Proposes to Adopt ISO 20022 Format for Fedwire Funds Service
FED proposed to adopt the ISO® 20022 message format for the Fedwire® Funds Service. If approved, the proposed action would replace the Fedwire Funds Service's current, proprietary message format. Comments are due 60 days after publication in the Federal Register, which is expected shortly.
Potential benefits to the adoption of the ISO 20022 message format include enhanced efficiency of both domestic and cross-border payments between the Fedwire Funds Service and other payment or messaging systems as well as a richer set of payment data that could help banks and other entities meet evolving requirements to screen payments for sanctions and anti-money laundering purposes. The proposed migration to the ISO 20022 message format would take place in three phases beginning in 2020 and ending in 2023. In phase 1, the Reserve Banks would make a number of changes to the current Fedwire Funds Service message format to address existing interoperability gaps with SWIFT’s proprietary MT format. The Reserve Banks would also eliminate the free-text format option for the originator and beneficiary fields in customer transfer messages and instead require Fedwire Funds Service participants to use a structured format for these fields.
The Fedwire Funds Service is a real-time gross settlement system owned and operated by the Federal Reserve Banks. It enables participants to make final payments using their balances held at Reserve Banks or intraday credit provided by the Reserve Banks. The Fedwire Funds Service currently uses a proprietary message format that supports multiple types of payments-related communications. The International Organization for Standardization (ISO) is an independent, non-governmental organization comprising 161 national standards bodies that publish standards for a broad range of industries. Many foreign wire transfer systems, including those used by key U.S. trading partners, have already adopted ISO 20022. FED, in its 2015 Strategies for Improving the Payment System paper, recommended that the U.S. payments industry develop a strategy for adopting the ISO 20022 message format for U.S. payment transactions. Subsequent public and industry engagement and outreach indicate that the migration could be beneficial for Fedwire Funds Service participants.
Related Links
Comment Due Date: FR + 60 Days
Keywords: Americas, US, Banking, PMI, Fedwire Funds Service, RTGS, ISO 20022, FED
Previous Article
IMF Publishes Financial System Stability Assessment Report for MaltaRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
