SITRAF started its operations on December 6, 2002. It is a hybrid settlement system operated by CIP, which uses the so-called continuous net settlement. As the STR, the system accepts credit orders only, and settlement is carried out using funds at the Banco Central do Brasil. Usually, the funds transfers orders are issued to be settled on the same day, lets say, in “quasi-real time”. If it is issued to be settled in a future day, the funds transfer order will be submitted to settlement process in the beginning of that day.
Electronic payment messages are exchanged between participants exclusively by means of RSFN, and the system is supported by two data processing centers (principal and secondary) located in Rio de Janeiro (the secondary center works in hot standby). SITRAF operates in a low platform environment and can process some 90 thousand funds transfer orders per hour.
At the beginning of each operational cycle, i.e. from 6:35am to 7:30pm, each participant makes an initial deposit (pre-deposit) in the SITRAF settlement account at the Banco Central do Brasil, which value is calculated in accordance with its operations history, i.e., based on statistical data. In the SITRAF environment, the initial deposit is credited in its settlement account, which balance is modified by funds transfer orders that the system releases. The participant can make further deposits to its SITRAF account, and, if there is excess of funds in the SITRAF environment, it can transfer funds from its SITRAF account to its STR account from 10:00am to 4:30pm.
Interbank funds transfer orders can be submitted to the system from 7:30am to 5:00pm. Each daily settlement cycle is composed of a principal cycle and a complementary cycle, as shown below:
Diagram: SITRAF - Schedule
During the principal cycle, funds transfer orders are settled based on the balance of each participant settlement account in the SITRAF environment (all accounts must always present balance equal or higher than zero). In order to avoid a possible liquidity concentration during the principal cycle, the system observes a second requirement whereby no account can present balance higher than “n” times the amount of the pre-deposit initially deposited by the participant (“n” is established for CIP and can be changed from time to time). This upper limit is eliminated during the last ten minutes of the principal cycle.
A funds transfer can be settled alone, or in a batch of bilateral or multilateral netting. The processing flow is showed at the following diagram:
Diagram: SITRAF – Processing flow
In the complementary cycle, participants that present pending funds transfer orders must deposit, in the SITRAF settlement account at the Banco Central do Brasil, the necessary funds up to a pre-set deadline (5:20pm). The remaining funds transfer orders are then processed and released. At the end of the complementary cycle (5:25pm), CIP transfers to the participants’ central bank accounts remaining balances in their respective accounts in the SITRAF environment.
Funds transfers related to initial and complementary deposits made during the principal and complementary cycles, as well as funds transfer made by the participant itself from its SITRAF account to its STR account, and refunds of remaining balances at the end of complementary cycle, are made by means of STR. As an operational principle, the receiving participant is informed about the funds transfer only at the moment in which it is released by the system.
Direct participation is restricted to institutions that hold bank reserves accounts (91 participants in December, 2008). Fees are charged to both sending bank and receiving bank, and full cost recovery is aimed.