Sanctions Screening
Key elements of a scheme
The Nexus Scheme would define the relations between the participants who adhere directly to the Scheme:
  • IPS operators in different countries and/or jurisdictions, under oversight of their local central bank or regulator
  • FX Providers, operating in different countries (who should comply with all applicable regulation in their jurisdiction)
The agreements arising from Scheme adherence or participation would be governed by the law governing the Scheme rulebook. A jurisdiction would need to be selected before the Scheme can be established. Agreements arising from relations between Nexus participants in one country are governed by that country’s law.

Scheme Management

This section would specify how the Scheme is governed and by whom. It would detail how the Scheme evolves, including the frequency and process for change management. Risk management

Risk Management

Local IPS Schemes prescribe risk management minimum requirements for their local participant community. The local IPS Schemes ensure compliance of the local participants through the local adherence agreement.
The Nexus Scheme will identify additional risks arising from the specific Nexus payments, prescribe risk management requirements for each role (Bank/PSP, IPS, Liquidity Provider, FX Provider) and allocate the obligations and liabilities arising from operations.

Access Criteria

The Scheme would set out the principle that any participant eligible to participate in the local IPS scheme is also eligible to send and receive Nexus payments (subject to technical capacity, onboarding and compliance with regulatory requirements for cross-border payments). Eligibility to make Nexus payments is therefore determined by the local IPS’s scheme on a country-by-country basis.
Nexus does set separate criteria for three types of participant:
  • IPS Operators themselves.
  • Liquidity Providers (ie the authorization for an IPS Member to act as a Liquidity Provider for Nexus payments)
  • FX Providers (ie the authorization for an IPS member or non-bank financial institution to provide FX to other Nexus participants)
An IPSO can join the scheme at any time but can only “go live” when it has at least one FX Provider and one Liquidity Provider supporting the FX processing for at least one corridor. (The FX Provider and Liquidity Provider may be the same entity.)

Liabilities

The Scheme would need to specify the liabilities for the Nexus Scheme actors, such as (for example) compensation for a breach of the Scheme Rulebook. A party to a Nexus payment would be liable for all losses to the other party in the payment arising from a breach of Rulebook by negligent act or omission of operational failure of the other party, or its employees or agents.
Liability under the Nexus Rulebook would be limited to the amount of the payment (except in case of wilful intent).

Technical Standards

The Nexus Scheme will appoint a Nexus Scheme-certified third-party provider that will develop, maintain and support the Nexus Gateway software component.
The Scheme will also define the data and messaging standards for Nexus payments, including the use of ISO 20022 and RESTful conventions for Nexus APIs. See Nexus Gateway for further details.

Onboarding of Participants

The Scheme will describe the steps that need to be taken per actor to join the Scheme and the evidence that needs to be provided to the Nexus Scheme. It is important to note that the marginal effort to add new countries, banks and FX Providers should decrease as more countries and members are added.
Last modified 4mo ago