Automated Claim Adjustment Process (ACAP) Frequently Asked Questions

• Expanded eligibility to all coupon-paying securities issued over the Fedwire^® Securities Service (i.e., coupon-paying debt and mortgage-backed securities (MBS) issued by the U.S. Department of the Treasury and other governmental agencies, government-sponsored enterprises and international organizations) for fails tracking.
• Expand ACAP tracking to securities lending transactions across all coupon-paying securities issued over the Fedwire Securities Service.
• Introduce a new Securities Lending Balance Statement and Claim Adjustment Notification for Securities Lending.
• Inclusion of unprocessed securities lending claims in the Unprocessed Claim Notification.

Please refer to Clearing Memo #278 (PDF) for detailed ACAP enhancements information and technical and operational implementation implications.

ACAP Phase 2 enhancements were initially planned to go live on Aug. 7, 2023. An industry workgroup, headed by the Securities Industry and Financial Markets Association (SIFMA), had requested that the industry cutover to ACAP Phase 2 be postponed (PDF) to give the industry more time to prepare. In coordination with the industry workgroup, the Reserve Banks planned an implementation date of Aug. 11, 2025 that had to be rescheduled to Oct. 6, 2025 due to the rescheduled implementation of ISO 20022 for the Fedwire Funds Service.

Yes, the industry working group led by SIFMA is coordinating an industry-wide conversion to ACAP securities lending tracking that will be implemented on a yet-to-be-determined industry adoption date. The group has determined that the industry is not ready to implement a coordinated conversion of securities lending positions onto ACAP and is working to identify a conversion date which the industry can support. SIFMA is expected to formally announce their recommended industry conversion date in summer 2025.

All participants are encouraged to start using fail tracking for the expanded asset types when Phase 2 is implemented on Oct. 6, 2025. SIFMA is similarly recommending the immediate use of fail tracking once available.

For more information on SIFMA’s planning for ACAP Phase 2, please refer to Planning for Fedwire’s Expanded ACAP Service — SIFMA (Off-site).

Yes, Phase 2 has been modified and will only include the expansion of transaction type to securities lending tracking for all Fedwire-eligible coupon-paying securities and expansion of asset type to all Fedwire-eligible coupon-paying securities for fails tracking only. In light of the SEC rule on U.S. Treasury central clearing (Off-site), Phase 2 will leave repo tracking unchanged (i.e., mortgage-backed securities (MBS) only) for now. Expansion of repo tracking to all Fedwire-eligible coupon-paying securities issued over the Fedwire Securities Service and adding claim types associated with general collateral movements will be considered after the successful implementation of Phase 2.

Although the expansion of asset types for repo tracking was originally included for Phase 2 enhancements, the Federal Reserve Banks and the industry workgroup agreed to exclude the expansion of repo tracking from Phase 2 enhancements. While the ACAP enhancement project was postponed at industry request, the SEC issued a rule on U.S. Treasury central clearing (Off-site) that resulted in the expansion of repo tracking being reevaluated. The Federal Reserve Banks will reassess expanding asset types for repo tracking after the successful implementation of Phase 2.

In addition to the ACAP fees we currently charge participants for using ACAP services, the following new fees will be activated once ACAP Phase 2 enhancements are implemented:

• Claim Adjustment Fees — Participants will be charged claim adjustment fees on the new securities types and securities lending transactions.
• Tracking Indicators Fees — Both sender and receiver of a securities lending tracking message (i.e., a securities transfer message with a securities lending tag in free text line) will be charged for the tag fee.
• Positions Maintenance Fees — Participants will be charged a fee for each securities lending position maintained on the Fedwire Securities Service per Fedwire Securities business day.

Please refer to the Fedwire Securities Service 2026 Fee Schedules for the comprehensive ACAP fees details.

The Federal Reserve Banks issued Clearing Memo #278 (PDF) on April 4, 2022. Fedwire Securities Service participants should refer to Clearing Memo #278 for the technical and operational information related to the enhanced ACAP service. Clearing Memo #278 superseded all previously published clearing memos relating to ACAP (#219, #220, #221, #226, #236, #240, #243, #246 and #251) on January 30, 2023.

Fedwire Securities Service participants should refer to the Fedwire Application Interface Manual (FAIM) for Fedwire Securities Service version 2.0.4 for the technical layouts for the claim adjustment messages and ACAP statements. Participants that use the FedPayments^® Manager — Securities application can refer to the FedPayments Manager — Securities Import File Specification v1.1 and FedPayments Manager — Securities Export File Specification v1.2 for ACAP-related technical layouts. Participants’ End User Authorization Contacts (EUAC) can locate a copy of the most recent technical documents, FAIM and the FedPayments Manager — Securities File Import and Export Specification on the EUAC Center.

To convert outstanding securities lending balances in connection with any securities issued over the Fedwire Securities Service to the enhanced ACAP, a participant (i.e., the securities lender) will use the Securities Lending Balance Only Adjustment field tag (i.e., {23F:ADSL}) in a free text line of the type code 2090 adjustment message. Once the Fedwire Securities Service processes this service message, it will record and maintain senders’ and receivers’ Securities Lending balances without transferring the securities.

Participants who currently use repo tracking to track MBS securities lending balances can convert those repo balances to securities lending balances by taking the following two steps after Phase 2 goes into effect.

• Step 1 — The participant with the Repo-In balance must first adjust the repo balance by initiating a type code 2090 adjustment message with the Repo Balance Only Adjustment Reversal field tag (i.e., {22F:ADRV}) in a free text line of the message.
• Step 2 — To establish the securities lending balance in the enhanced ACAP, the participant with the Securities-Lent balance must initiate a type code 2090 adjustment message with the Securities Lending Balance Only Adjustment field tag (i.e., {23F:ADSL}) in a free text line of the message. Once the Fedwire Securities Service processes this service message, it will record and maintain senders’ and receivers’ Securities-Lent and Securities-Borrowed balances, respectively, without transferring the security.

Once both steps are taken, the MBS repo balance will no longer be reported on the participants’ Repo Balance Statement and will instead be reported on the participants’ Securities Lending Balance Statement.

The message will be accepted for processing by the Fedwire Securities Service. The message will be settled if it passes all edits; however, repo tracking will not be enabled as repo tracking is only eligible for MBS securities. In other words, the tag will be ignored.

Non-MBS fail tracking messages received by the Fedwire Securities Service prior to Phase 2 implementation will be accepted for processing; however, the service will ignore the ACAP contract date field tag and not enable fail tracking for these messages.

The testing period for Phase 2 will be June 3, 2025 to Sept. 26, 2025. The 4-month testing period will have two 2-month cycles. The testing environment will be closed on June 2, 2025, and Aug. 1, 2025, for the environment to be refreshed to replicate the production environment as of the prior month’s end production data.

We expect participants and service providers to complete comprehensive end-to-end testing for all ACAP enhancements. Participants and service providers will need to test the enhancements in the DIT prior to the implementation of the phase. We recommend participants and service providers to test extensively and early to allow themselves time to make any adjustments necessary.

Successful testing of Phase 2 functionality is dependent on a number of factors that should be reviewed and considered.

Do you hold in your account coupon-paying Fed-eligible securities that will incur interest payments during the timeframe you are testing in the DIT environment? Claim adjustments will be made on securities in the DIT as they are in the production environment. It is essential to coordinate which securities are tagged for ACAP claim adjustment that will result in a claim adjustment within the testing timeframe.

Will you be testing ACAP tracking on an MBS securities lending transaction? If so, you will need to be mindful of the record dates and payments dates of the MBS securities you will be using to test as the dates will be the same as they would be in the production environment. You will also need to be mindful of when you open the position and expect the resulting claim adjustment so that both are within two refresh dates.

Have you requested statements? Statements will not be automatically sent and need to be requested each time.

We expect another testing opportunity to be provided in the future to support participants ahead of the coordinated industry conversion to ACAP securities lending. Details will be announced when we know more on when the coordinated industry conversion will be implemented.

Expanded functionality that will be implemented in Phase 2 will be live starting Oct. 6, 2025, meaning you could receive messages with the ACAP tags for securities lending or for fails for any ACAP-eligible security. We encourage you to test ahead of the Oct. 6 implementation date so that your firm is prepared.

The data in the DIT environment will be “refreshed” or reset periodically to replicate the production environment as of the last business day of the prior month. Therefore, any securities holdings and repo positions that are open in the production environment on the last business day of the prior month to the refresh will be replicated in the DIT environment, and any positions created in the DIT environment prior to the refresh will be overwritten.

During the 4-month testing period, the testing environment will be closed on June 2, 2025, and Aug. 1, 2025, for the environment to be refreshed to replicate the production environment as of the prior month’s end production data.

Participants and service providers need to submit a Fedwire Securities Service Depository Institution Testing (DIT) Application Test Request Form for ACAP Phase 2. On the form, please select “Regular Testing” under Testing Type in Section 2 and provide in the comments section in Section 6 “ACAP Phase 2.”

For ACAP testing-related questions, you should contact Wholesale Testing Services.

There is no “opt in” or “opt out” feature for ACAP.

Fail, repo and securities lending tracking is automatically enabled for a receiver of a securities transfer by the sender of the securities transfer message initiating a fail, repo or securities lending transaction, respectively. Interim accounting tracking is automatically enabled with respect to both sender and receiver when a sender sends a securities transfer message to transfer an MBS that has a different Record Date and Beneficiary Date. Therefore, even if a participant does not intend to use the enhanced ACAP or decides to start using it at a later date, that participant could still receive ACAP transactions (i.e., fail, interim accounting, repo or securities lending transactions) originated by other participants. Those ACAP transactions trigger ACAP tracking and result in the receiving participant receiving ACAP statements and claim adjustments regardless of whether the receiver of the message elects to use ACAP services.

Given this, we encourage all participants to add controls to their Fedwire Securities Service interface applications and/or internal applications to properly handle any unanticipated ACAP transactions, the new claim adjustment messages and ACAP statements to avoid technical or operational disruptions resulting from receiving those unanticipated messages and statements.

For general ACAP-related questions, you can reach out to the Federal Reserve Financial Services Support Center P: (833) 377-7827. For ACAP testing-related questions, you should contact Wholesale Testing Services.