SEPA Deadline: 1st February 2016 – The Countdown Begins 9

When all hands were on deck for the original SEPA deadline, talk of February 2016 felt like an age away. Yet here we are in February 2015 and the countdown to the next SEPA deadline is less than a year away. The EPC post SEPA Compliance in the Euro Area: Get Ready for February 2016. Act Now is a timely reminder of what is happening in February 2016. The purpose of this post is to summarise simply and quickly the February 2016 requirements from a corporates perspective, all of which derive from the SEPA Regulation (EU) No. 260/2012.


SEPA Deadline – 1st February 2016 – Requirements:

1. Corporates must indicate the IBAN

In the build up to the SEPA deadline in February 2014 and then August 2014, some corporates ran out of time and weren’t able to convert their Basic Bank Account Numbers (BBAN) into the International Bank Account Number (IBAN) format. As a result some corporates asked their payment service providers (PSP’s) to convert the BBAN to IBAN.

From 1st February 2016, payment service providers will no longer be permitted to convert the ‘legacy’ account number into IBAN. The corporates must indicate the IBAN on all submitted SEPA Credit Transfers and SEPA Direct Debits

2. The Bank Identifier Code (BIC) is no longer required

This is the ‘IBAN only’ rule – in short as of 1st February 2016 you will not need to indicate the BIC in the SEPA Credit Transfer and SEPA Direct Debit transactions you submit to the bank. The IBAN alone will be enough!

Some countries were granted an extension and required the corporate to indicate the BIC on all SEPA transactions until 1st February 2016. For further details, check out the post 3 Things You Ought To Know About SEPA BIC. According to my calculations – this requirement only impacts the following countries:

  • Cyprus, Greece, Ireland, Malta, Portugal,

3. Corporates must use the SEPA ISO 20022 XML Format

As of 1st February 2016, your bank(s) can no longer convert the legacy in-country payments / direct debit format into a SEPA compliant XML format for you. You need to send a XML SEPA Credit Transfer or XML SEPA Direct Debit file to your bank… Uh oh…!

If you are sending something other than an XML formatted file to your bank, I would suggest that you follow with your bank and understand this requirement as soon as possible.

4. Payment card direct debits are no longer permitted

This is where a payment card is used to initiate a typically one off direct debit. This will no longer be valid as of 1st February 2016.

5. Niche products will need to be SEPA Compliant

Niche products – defined as in country payment instruments that have a cumulative market share of less than 10% – must be SEPA compliant as of 1st February 2016. Read the post SEPA Niche Products for further details, but I reckon the following products were declared as niche and must be converted to SEPA before 1st February 2016. Please, please check and confirm the niche product details with your banks for absolute certainty.

Austria:

  • Payments – ATIB – a paper based credit transfer

France:

  • Payments – Titre Interbancaire de Paiment – TIP
  • Payments – Téléréglement

Germany:

  • Direct debit – Elektronisches Lastschriftverfahren – electronic direct debit scheme

Italy:

  • Direct debit – RID – financial transactions
  • Direct debit – RID – fixed amount

Spain:

  • Payments – CSB34.14 – NORMA 34.14
  • Payments – CSB58 – NORMA 58 – Anticipos de credito

SEPA Deadline – February 2016 – Here we go…!

Hopefully that gives you a quick and simple overview of what is happening in February 2016, and given you an idea of what you need to do to ensure readiness. Please double check all of the above with your banks / payment service providers to ensure nothing has been missed. Equally, if I have misstated anything please let me know. The countdown to the February 2016 deadline has started – as they say in the trade, “here we go again”….!

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