Enhanced Batch Processing in RITS – January 2020 5. Reservation Batch

A Reservation Batch represents a group of interbank ESA credits and debits that a Batch Administrator submits to RITS, involving a two-step process. First the Batch Administrator submits a file containing one or more Reservation Requests to RITS requesting funds to be reserved in the ESAs of those Members who are payers in the batches. The Reservation Request contains full details of the batches to enable validation by RITS and reservation of funds. Funds availability is checked as part of reservation processing; a Reservation Request is only successful if funds are available in the ESAs of all participating paying Members. If funds are available, they are reserved. Reserved funds cannot be used to settle any other transactions. Following completion of further upstream processing, the Batch Administrator submits a file containing one or more Settlement Requests to RITS. RITS then settles those batches. In doing so, it simultaneously debits the ESAs of the paying Members for the amounts previously reserved and credits the ESAs of the payee Members, while extinguishing the reservation. Settlement of the Batch is almost instantaneous due to prior reservation of ES funds.

The Batch Administrator may submit a Reservation Batch via an XML-formatted file across the COIN (for details see the relevant Interface Message Specification). If file transfer across the COIN is not available, the Batch Administrator may upload request files via the RITS User Interface or manually request settlement of a batch in a status of reserved via the RITS User Interface (for details see Batch Administrator User Guide).

Activation Time is not used for Reservation Batches.

There is currently no provision for a Reservation Batch to be structured as a central-party batch; Reservation Batches must be multilateral.

5.1. Management and recall of Reservation Batches: Batch Administrator

The Batch Administrator is able to recall a Reservation Batch for which funds are currently reserved and for which a Settlement Request has not been received (and processed successfully) by sending a Reservation Recall Request message to RITS. A successful Recall Request results in the ‘unwinding’ of the reserved funds, i.e., the reserved funds are released and are now available for settlement of other transactions.

It is not possible to recall a Reservation Batch for which a Settlement Request has been received and accepted by RITS.

Batch Administrators cannot manage individual payments in the Reservation Batch.

5.2. Management of payments: Participating Members

Members are not expected to need to manage payments in the Reservation Batches as Reservation Batches settle almost immediately on arrival on the RITS Queue due to prior reservation of funds.

Following the receipt of the Settlement Request from the Batch Administrator, payments in Reservation Batches are always sent to RITS System Queue with an ESA, Credit and Cash Account status of Priority. It is not possible for Members participating in a Reservation Batch to change these statuses via ether the use of override status or queue management. When the Reservation Batch arrives on the RITS System Queue, it will settle immediately, as funds were already secured at the time of reservation.

A Member cannot recall its Reservation Batch payments, whether the Reservation Batch is awaiting a Settlement Request from the Batch Administrator or is being settlement tested on the RITS System Queue.

5.3. Selecting Reservation Batches for Settlement via RITS

It is possible for the Batch Administrator to select Reservation Batches for settlement via the RITS User Interface. This approach is used in a contingency situation where the Batch Administrator cannot submit Settlement Requests via messages to RITS. Only Reservation Batches for which funds are currently reserved and for which Settlement Requests have not yet been received (and processed successfully) can be settled using the RITS UI function. It is not possible to enter or select new Reservation Requests or Reservation Recall Requests via this functionality.

5.4. Reservation Batch Message Flows

See the table in Section 5.5 for information on the fields that are contained in each message flow shown below.

5.4.1. Reservation and Settlement

Ref.	Description
1	The Batch Administrator sends a Reservation Request to RITS via the COIN.
2	RITS performs technical and business validations on the Reservation Request. RITS reserves funds in the ESAs of Members that are payers in the Batch.
3	RITS sends a Reservation Response to the Batch Administrator.
4	The Batch Administrator sends a Settlement Request to RITS following successful completion of upstream business processing.
5	RITS performs technical and business validations on the Settlement Request. RITS passes the Reservation Batch to the RITS System Queue for settlement testing. The RITS System Queue settles the Reservation Batch. Settlement is almost instantaneous due to prior reservation of funds. Postings are made to participating Members' accounts in RITS.
6	RITS sends a Settlement Response to the Batch Administrator.

5.4.2. Recalling a Reservation Batch

Ref.	Description
1	The Batch Administrator sends a Reservation Request to RITS via the COIN.
2	RITS performs technical and business validations on the Reservation Request. RITS Reserves funds in the ESAs of Members who are payers in the Batch.
3	RITS sends a Reservation Response to the Batch Administrator.
4	If upstream business processing is unsuccessful and the Batch Administrator wishes to cease settlement of that Reservation Batch, the Batch Administrator sends a Reservation Recall Request to RITS.
5	RITS performs technical and business validations on the Reservation Recall Request. RITS extinguishes the reservation. As a result, reserved funds are released and are now available for settlement of other transactions.
6	RITS sends a Reservation Recall Response to the Batch Administrator.

5.4.3. Rejection of a Request concerning Reservation Batch

Ref.	Description
1	The Batch Administrator sends a Reservation, Reservation Recall, or Settlement Request to RITS via COIN.
2	RITS performs technical and business validations on the Reservation, Reservation Recall, or Settlement Request. The Request fails the business validations and is rejected.
3	RITS sends a Reservation, Reservation Recall, or Settlement Response including the reason for rejection (in the form of a reject code and description) to the Batch Administrator.

5.4.4. End of Day Processing

Reservation Batch - End of Day Processing

Ref.	Description
1	The Batch Administrator sends a Reservation Request to RITS via COIN.
2	RITS performs technical and business validations on the Reservation Request. RITS reserves funds in the ESAs of Members who are payers in the Batch.
3	RITS sends a Reservation Response to the Batch Administrator.
4	The end of day for the Batch Stream is reached. RITS unwinds the reservation. As a result, reserved funds are released and are now available for settlement of other transactions.
5	RITS sends a Reservation Unwound Response to the Batch Administrator for each reservation that has been unwound.

5.5. Overview of Reservation Batch Message Content

The following table outlines the business content of messages that are exchanged between RITS and the Batch Administrator of the Batch Stream concerning Reservation Batches.

For new Batch Administrators and new Batch Streams, message content may differ from the details indicated below. The RBA will provide detailed message specifications, as agreed with the RBA and the Batch Administrator. Both the RBA and the Batch Administrator will comply with the message specifications for messages that will be submitted to RITS for a given Batch Stream.

Note: The BIN includes the Batch Stream ID. See the glossary for the definition of BIN.

Message	Originator	Purpose	Business content
Reservation Request	Batch Administrator	Sent to RITS to provide details of all settlement positions in a Reservation Batch and to request reservation of ES funds of Members that are payers in a Reservation Batch.	Batch Identification Number (BIN) Settlement date For each participating RITS Member: RITS mnemonic Net settlement position Debit or credit indicator
Reservation Response	RITS	Advises the Batch Administrator whether the Reservation Request was successful (i.e., that funds have been reserved for paying Batch Participants) or rejected.	BIN File name of the file containing the Reservation Request Date and time reservation or rejection was effected Successful or unsuccessful If unsuccessful, reject code and reason for rejection
Settlement Request	Batch Administrator	Sent to RITS to request settlement of an existing Reservation Batch.	BIN
Settlement Response	RITS	Advises the Batch Administrator whether the Settlement Request was successful (i.e., that the Reservation Batch has settled) or rejected.	BIN File name of the file containing the Settlement Request Date and time settlement was effected in RITS, or date and time of rejection Successful or unsuccessful If successful, for each participating RITS Member: RITS mnemonic RITS-assigned transaction ID If unsuccessful, reject code and reason for rejection
Reservation Recall Request	Batch Administrator	Sent to RITS to recall a Reservation Batch.	BIN
Reservation Recall Response	RITS	Advises the Batch Administrator whether the Reservation Recall Request was successful (i.e., that the Reservation Batch has been recalled) or rejected.	BIN File name of the file containing the Reservation Recall Request Date and time recall or rejection was effected Successful or unsuccessful If unsuccessful, reject code and reason for rejection
Reservation Unwound Response	RITS	Advises the Batch Administrator that the Reservation Batch has been ‘unwound’, meaning all funds have been released and the reservation extinguished (and so the Reservation Batch will not progress to settlement).	BIN File name of the file containing the Reservation Request that was unwound Date and time the unwind was effected in RITS Code and reason for release of reservation
File Rejected Response	RITS or Batch Administrator	Sent from RITS: Advises the Batch Administrator that a file sent to RITS has failed validations at the file level, and so the messages it contains could not be processed by RITS. (Can also be sent by Batch Administrator concerning a failed file sent by RITS.)	File name of the file that was rejected Date and time when file was rejected