Automated Claim Adjustment Process (ACAP) Depository Institution Testing

While some participants and service providers will be required to test, all participants and service providers should plan to participate in ACAP testing in the Depository Institution Testing (DIT) environment. Separate DIT testing periods prior to the implementation of each phase will be provided. The Federal Reserve Banks will communicate the ACAP DIT testing schedule, requirements, and guidelines prior to the start of each testing period.

Even if a participant does not intend to use ACAP services, the participant may receive securities transfer messages that include an ACAP tag from other participants, which automatically triggers ACAP tracking. If the Fedwire® Securities Service determines that a transaction, or repo/securities lending positions created via a transaction, will result in claims, those claim adjustments will be made automatically on the adjustment date, regardless of the participants intent to use ACAP services. The Fedwire Securities Service will notify participants of their upcoming claim adjustments via the Adjustment Notification statement transmitted the evening of the business day prior to the adjustment date. Once a claim adjustment debit or credit is made, the participant will be notified of the debit or credit to its master account via a new incoming claim adjustment credit/debit message.

It is highly recommended to test early in each of the DIT periods to allow adequate time to successfully complete the steps needed to create repo and/or securities lending positions in the DIT environment that will effect claim adjustments and to allow yourself time to adjust your own processes and systems if needed. Sequential steps that need to be taken are dependent on the security and transaction type of ACAP claim adjustment being tested, the institution’s securities holdings, and the associated record dates and payment dates of those holdings.

Participants and service providers need to be mindful of the refresh schedule in the DIT environment as all data, including any testing activity since the last refresh, will be replaced with production environment data.

Participants and service providers who test before the ACAP enhancements go into effect will be prioritized for support in the event of an issue after implementation.

Testing Periods

The first DIT period is open from Thursday, July 7, 2022, to Thursday, December 29, 2022. The DIT environment will be open for approximately six months for participants and service providers to validate their operational readiness for Phase 1 functionality and if the participant or service provider chooses, Phase 2 functionality. Deployment of Phase 1 into production is scheduled for January 28, 2023, and will be effective on January 30, 2023.

Upon Phase 1 production implementation, ACAP claim adjustments will settle throughout the day over the Fedwire Securities Service at security/CUSIP® level using the new type code 8908 and 8909 messages. In addition, the new Unprocessed Claim Notification and existing ACAP statements with the new reporting format will be implemented in this phase.

Phase 1 will continue fail, interim accounting and repo tracking only for coupon-paying agency mortgage-backed securities (agency MBS) currently eligible for ACAP as described under Phase 1 Implementation in the ACAP Project Timeline.

For those who choose to test Phase 2 functionalities in addition to Phase 1 during the initial testing period, testing guidelines are also included. We encourage any participant and service provider to take advantage of this opportunity to test both phases during the initial testing period.

Refreshes in the DIT environment are scheduled for July 6, September 1, and November 1, 2022 and will be updated with production data as of June 30, August 31 and October 31, 2022, respectively.

The second DIT period is open from Wednesday, January 4, 2023, to Monday, July 31, 2023, prior to the implementation of Phase 2. Participants and service providers are expected to test the enhancements of Phase 2 at this time. Deployment of Phase 2 into production is scheduled for August 5, 2023, and will be effective on August 7, 2023.

Upon Phase 2 production implementation, ACAP tracking will be eligible on all coupon-paying securities issued over the Fedwire Securities Service and include securities lending transactions. The Fedwire Securities Service will also introduce new Securities Lending Balance Statement and Claim Adjustment Notification for Securities Lending upon implementation of Phase 2.

Refreshes in the second DIT period are scheduled on January 3, February 1, April 3, and June 1, 2023 and will be updated with production data as of December 30, 2022, January 31, March 31, and May 31, 2023, respectively.

FedLine Direct® Customers

To validate FedLine Direct customers’ readiness for the implementation of the ACAP enhancements, the Federal Reserve Banks require all FedLine Direct participants and their service providers to participate in the first DIT period to test Phase 1 enhanced enhancements and highly recommend testing in the second DIT period to Phase 2 enhancements.

FedLine Direct customers click here for testing schedule, requirements, and guidelines (PDF).

FedLine Advantage® Customers

FedLine Advantage customers that receive their Fedwire Securities statements via the FedLine Direct Solution (i.e., FedLine Direct File, FedLine Direct Message) or FedLine Command® channels may need to make changes or add controls to their internal applications to receive and process ACAP statements. The Federal Reserve Banks require these FedLine Advantage customers to participate in the first DIT period to test Phase 1 enhancements and highly recommend testing in the second DIT period to test Phase 2 enhancements. The FedPayments® Manager — Securities application will be modified to enable Fedwire Securities Service participants that use the application through the FedLine Advantage access solution to use the ACAP enhancements function (i.e., originate a securities transfer message with an ACAP field tag, receive incoming claim adjustment messages and statements).

The Federal Reserve Banks highly recommend FedLine Advantage participants who export incoming messages through the FedPayments Manager — Securities application to participate in each testing period to ensure downstream operations can process new claim adjustment messages.

FedLine Advantage customers click here for testing schedule, requirements, and guidelines (PDF).

The second DIT period (dates to be determined) will be prior to the implementation of Phase 2. Participants and service providers are expected to test the enhancements of Phase 2 at this time.

ACAP Enhancements Testing Registration

Participants and service providers are required to register for each ACAP DIT period by submitting the Test Request Form (Off-site). Please check “Other Testing” and provide in the comments section either “ACAP Enhancements Testing for the first DIT period or “ACAP Enhancements Testing 2” for the second DIT period.

For ACAP testing-related questions, you should contact your designated Wholesale Testing Units service team.

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