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Fund Clearing Network

The Fund Clearing Network allows network participants to process inter-participant payments, thus replacing a traditional clearing house. We assume that participants within the network are Banking entities, that accumulate and submit one or more TransferRequest items to other participants. These transfer requests are placed into the business network, and when a CreateBatch transaction is invoked, all transfer requests for each BankingParticipant is accumulated into a series of net BatchTransferRequest. Each BatchTransferRequest details the required net Settlement between each BankingParticipant for the contained array of TransferRequest items, based on the Currency of the creditor bank.

Network Flow

The Business Network flow is the following:

• BankingParticipant submits a series of SubmitTransferRequest transactions, creating as many TransferRequest assets as needed.
• CreateBatch transaction is invoked, with a current UsdExchangeRate array, aggregating all TransferRequests related to that bank into a new BatchTransferRequest asset. All related TransferRequests are placed into PROCESSING state.
• BankingParticipant detects BatchTransferRequest assets that they are involved in and processes internally all referenced TransferRequest assets related to the batch. At this stage the bank would be updating internal systems to mark the payment in principle for credit and debit actions. Once all TransferRequest assests have been processed internally, the BankingParticipant executes a MarkPreProcessComplete transaction, which will update all the TransferRequest assets contained in a BatchTransferRequest, automatically changing their state to PRE_PROCESS_COMPLETE.
• When all referenced TransferRequest assets are in the PRE_PROCESS_COMPLETE state, the BatchTransferRequest changes state to READY_TO_SETTLE.
• CompleteSettlement transaction is invoked, with a current UsdExchangeRate array and the identity of a BatchTransferRequest. This executes a fund transfer between the participating banks for the passed BatchTransferRequest and the state is moved to PENDING_POST_PROCESS.
• Once settlement has occurred, each BankingParticipant would be updating their internal systems to move credit/debit payments from in principal, to complete. After their internal action, a MarkPostProcessComplete would be submitted, which acts to update the state of all relevant TransferRequest assets to COMPLETE.
• Once all TransferRequest assets are in the COMPLETE state, the parent BatchTransferRequest is marked as COMPLETE.

This business network defines:

Participants BankingParticipant

Assets TransferRequest, BatchTransferRequest

Transactions SubmitTransferRequest, CreateBatch, MarkPreProcessComplete, CompleteSettlement, MarkPostProcessComplete

SubmitTransferRequest

The SubmitTransferRequest transaction submitted by a BankingParticipant participant will create a new TransferRequest asset.

To test this Business Network Definition in the Test tab:

Create a minimum of two BankingParticipant participants:

{
  "$class": "org.clearing.BankingParticipant",
  "bankingId": "bank1",
  "bankingName": "Bank Name 1",
  "workingCurrency": "USD",
  "fundBalance": 1000000
}

{
  "$class": "org.clearing.BankingParticipant",
  "bankingId": "bank2",
  "bankingName": "Bank Name 2",
  "workingCurrency": "EURO",
  "fundBalance": 1000000
}

Create identities for both of these participants, as it is necessary to interact with the flow under two separate identities that are bound to the BankingParticipant participants involved in a BatchTransaferRequest.

Submit a series of SubmitTransferRequest transactions.

{
  "$class":"org.clearing.SubmitTransferRequest",
  "transferId":"xferid1",
  "toBank":"bank2",
  "state":"PENDING",
  "details": {
    "$class":"org.clearing.Transfer",
    "currency":"USD",
    "amount":1000,
    "fromAccount":"111111",
    "toAccount":"222222"
  }
}

{
  "$class":"org.clearing.SubmitTransferRequest",
  "transferId":"xferid2",
  "toBank":"bank1",
  "state":"PENDING",
  "details":{
    "$class":"org.clearing.Transfer",
    "currency":"EURO",
    "amount":1000,
    "fromAccount":"333333",
    "toAccount":"444444"
  }
}

CreateBatch

The CreateBatch transaction submitted by a BankingParticipant participant will create a new BatchTransferRequest.

To test this Business Network Definition in the Test tab:

Create two BankingParticipant participants and two TransferRequests assets, as detailed above.

Submit a CreateBatch transaction:

{
  "$class": "org.clearing.CreateBatch",
  "batchId": "batch1",
  "usdRates": [
    {"$class":"org.clearing.UsdExchangeRate", "to":"EURO","rate":0.75},
    {"$class":"org.clearing.UsdExchangeRate", "to":"STERLING","rate":1.75}
  ]
}

The CreateBatch transaction will create a new BatchTransferRequest in the Asset Registry for each unique pairing of BankingParticipant participants that have pending TransferRequest assets. An event will be emitted for each BatchTransferRequest created.

Each TransferRequest references by the batch changes state to PROCESSING.

Note that the new BatchTransferRequest asset contains a batchId field that has additional ":-" appended to the batchID that was submitted in the transaction, where each is the identity of the banks participating in the particular BatchTransferRequest.

MarkPreProcessComplete

The MarkPreProcessComplete transaction submitted by a user with an identity bound to a BankingParticipant participant will update all TransferRequest assets for the relevant BankingParticipant within a BatchTransferRequest to be in the sate PRE_PROCESS_COMPLETE. If all referenced TransferRequest assets are detected to be in the PRE_PROCESS_COMPLETE state, then the BatchTransferRequest is marked to be in the state READY_TO_SETTLE.

To test this Business Network Definition in the Test tab:

Create a BatchTransferRequest, as detailed above.

Access the business network under an identity bound to a BankingParticipant. Submit a MarkPreProcessComplete transaction, passing details of the BatchTransferRequest identifier.

{
  "$class": "org.clearing.MarkPreProcessComplete",
  "batchId": "batch1:bank1-bank2"
}

Repeat for both bound identities contained in the BatchTransferRequest.

CompleteSettlement

The CompleteSettlement transaction submitted by a user with an identity bound to a BankingParticipant participant will perform a fund transafer between the named BankingParticipant participants from the passed BatchTransferRequest identifier, based on the most recent passed UsdExchangeRates array. Once funds have been transfered between BankingParticipant participants, the BatchTransferRequest will be marked in the PENDING_POST_PROCESS state.

To test this Business Network Definition in the Test tab:

Create a BatchTransferRequest and execute MarkPreProcessComplete for both named participants, as detailed above.

Access the business network under an identity bound to a BankingParticipant. Submit a CompleteSettlement transaction, passing details of the BatchTransferRequest identifier and an array of current exchange rates to be used for currency adjustment.

{
  "$class": "org.clearing.CompleteSettlement",
  "batchId": "batch1:bank1-bank2",
  "usdRates": [
    {"$class":"org.clearing.UsdExchangeRate", "to":"EURO","rate":0.75},
    {"$class":"org.clearing.UsdExchangeRate", "to":"STERLING","rate":1.75}
  ]
}

MarkPostProcessComplete

The MarkPostProcessComplete transaction submitted by a user with an identity bound to a BankingParticipant participant will update all TransferRequest assets the participant is named as a creditor for within a BatchTransferRequest, changing the state to COMPLETE. If all referenced TransferRequest assets contained in a BatchTransferRequest are detected to be in the COMPLETE state, then the BatchTransferRequest is changed to the state COMPLETE.

To test this Business Network Definition in the Test tab:

Access the business network under an identity bound to a BankingParticipant. Create a BatchTransferRequest and execute MarkPreProcessComplete for both named participants, followed by a CompleteSettlement transaction, as detaied above.

Submit a MarkPostProcessComplete transaction, passing details of the BatchTransferRequest identifier

{
  "$class": "org.clearing.MarkPostProcessComplete",
  "batchId": "batch1:bank1-bank2"
}

Repeat for both bound identities.