FSCS Account Marking Process Modelling (BPM

FSCS Account Marking Process Modelling
(BPM and DMN)
March 2015
Contents
Page
3
Background
4
FSCS Account Marking Business Process Model (BPM)
5
FSCS Account Marking Decision Requirements Graph (DRG)
6
Decision Requirements Graph (DRG) Key
7-10
Account Marking Decision Tables
2
Background
This pack shows a Business Process Model (BPM) to determine how accounts should be ‘marked’ according to the recently
recast EU Deposit Guarantee Scheme Directive (DGSD), and which deposits should be included on a Financial Services
Compensation Scheme (FSCS) Single Customer View (SCV) file (other jurisdictions may implement SCV differently).
Decision Model & Notation (DMN) is then used to specify how the decisions in this BPM are underpinned by a set of business
rules and a network of dependencies.
For an overview of impacts of the changes to the reporting process, please refer to the How Bank Work articles Impact of the
Recast DGSD upon UK Banks Part 1 and Part 2, or the PRA’s CP20/14 Paper.
It is worth noting that the models here focus only on the DGSD requirement to ‘mark accounts’, and do not expand on the
directive’s other requirements.
For more information on the benefits of using DMN to feed data into the requirements definition process, please refer to the
article on How Banks Work.
For more information on any of the content of this pack or the associated article please contact us on
[email protected].
3
FSCS Account Marking Process Model (BPM)
Start (deposit
record)
N
Is the a/c FSCS
eligible by
deposit type?
Y
N
Is the a/c FSCS
eligible by
depositor?
Mark as ineligible
for FSCS protection
Mark as large
corporate, not
eligible by
geography
N
Y
Is the a/c FSCS
eligible by
geography?
Is the depositor
an SME/Natural
Person?
N
N
N
Is the depositor
an SME/Natural
Person?
Y
Mark as Large
Corporate on SCV
Mark as
SME/Natural
Person on SCV
Should the a/c
be on the
Exclusions file?
Mark as
SME/Natural Person
not eligible by
geography
Y
Y
Y
N
Is it a
beneficiary a/c?
Y
N
Y
Mark as
SME/Natural
Person on
Exclusions
Mark as a
beneficiary a/c on
Exclusions
Calculate how much compensatable balance a/c holds
Is the depositor
an SME/Natural
Person?
Mark as Large
Corporate on
Exclusions
*
* This box represents the next stage of the process in order to comply with the complete set of DGSD requirements. It is not modelled in these slides.
4
FSCS Account Marking Decision Requirements Graph (DRG)
1
2
How should the
account be
marked?
Marking Rules
Is the depositor an
SME/Natural
Person?
SME Criteria
3
4
7
Is the a/c FSCS
eligible by
depositor?
Is it a beneficiary
a/c?
Exclusions Rules
5
Depositor Rules
Should the a/c be
on the Exclusions
file?
6
Is the a/c FSCS
eligible by deposit
type?
Is the a/c FSCS
eligible by
geography?
Deposit-Type Rules
Beneficiary a/c
definition
Geography Rules
CP 20/14*
Account Data
*Note: The Knowledge Source for all the rules in this DRG is the PRA’s Consultation Paper CP 20/14.
PRA
5
Decision Requirements Graph (DRG) Key
Decision
Business
Knowledge Model
Input Data
Knowledge Source
A decision denotes the act of determining an
output from a number of inputs, using decision
logic which may reference one or more business
knowledge models.
A business knowledge model denotes a function
encapsulating business knowledge, e.g. as
business rules, a decision table, or an analytic
model.
An input data element denotes information
used as an input by one or more decisions.
When enclosed within a knowledge model, it
denotes the parameters to the knowledge
model.
A knowledge source denotes an authority for a
business knowledge model or decision.
Information
requirement
Knowledge
requirement
Authority
requirement
An information requirement denotes input data
or a decision output being used as one of the
inputs of a decision.
A knowledge requirement denotes the
invocation of a business knowledge model.
An authority requirement denotes the
dependence of a DRD element on a knowledge
source, or the dependence of a knowledge
source on input data.
6
1
How Should the Account be Marked?
Marking Account Rules
Any
1
2
3
4
5
6
7
8
9
2
Eligible by Depositor?
Eligible by DepositType?
NO
YES or NO
YES
YES
YES
YES
YES
YES
YES
YES or NO
NO
YES
YES
YES
YES
YES
YES
YES
Conditions for Marking
Eligible by
Reason to include on
Beneficiary Account?
Geography?
Exclusions File?
YES or NO
YES or NO
NO
NO
YES
YES
YES
YES
YES
YES or NO
YES or NO
YES or NO
YES or NO
YES
YES
YES
NO
NO
YES or NO
YES or NO
YES or NO
YES or NO
NO
NO
YES
NO
NO
Is the Depositor an
SME/Natural Person?
YES or NO
YES or NO
YES
NO
YES
NO
YES or NO
YES
NO
Outcome
Mark as Ineligible for FSCS Protection
Mark as Ineligible for FSCS Protection
Mark as SME Ineligible only by Geography
Mark as Large Corporate Ineligible by Geography
Mark as SME/Natural Person and Include on Exclusion File
Mark as Large Corporate and Include on Exclusions File
Mark as Beneficiary Account and Include on Exclusions File
Mark as SME/Natural Person and Include on SCV
Mark as Large Corporate and Include on SCV
Is the Depositor an SME/Natural Person?*
Is the Depositor an SME/Natural Person?
SME/Natural Person Categorisation Rules
Any
Account Belonging to Turnover less than €50m Balance Sheet less than
Natural Person?
annually?
€43m annually?
1
YES
YES or NO
YES or NO
2
NO
YES
YES
3
NO
YES
YES or NO
4
NO
YES or NO
YES
5
NO
YES
NO
6
NO
NO
YES
7
NO
NO
NO
Less than 250
Employees?
YES or NO
Yes or NO
YES
YES
NO
NO
YES
Outcome
Natural Person
SME
SME
SME
Large Corporate
Large Corporate
Large Corporate
* The PRA have suggested conflicting definitions for an ‘SME’. This decision table is based on the definition which seems most plausible and is most consistent with the rest of the
regulation but clarification from the PRA has been sought.
7
3
Should the Account be on the Exclusions File?
Exclusions File Inclusion Rules
Any
1
2
3
4
5
HMTS
NO
YES
NO
NO
NO
Reason for Inclusion
LEGDIS
LEGDOR
NO
YES or NO
YES
NO
NO
NO
YES or NO
Yes or NO
YES
NO
BEN
NO
YES or NO
YES or NO
YES or NO
YES
Outcome
Include on SCV
Include on exclusions (flagged HMTS)
Include on exclusions (flagged LEGDIS)
Include on exclusions (flagged LEGDOR)
Include on exclusions (flagged BEN)
8
Is the Account Eligible by Depositor?
4
Eligibgle for FSCS Protection by Depositor Rules
Any
1
2
3
4
5
6
7
Credit Institution?
Financial Institution?
NO
YES
NO
NO
NO
NO
NO
NO
NO
YES
NO
NO
NO
NO
Is Deposit Deposited on Behalf of…
Investment Firm?
Insurer?
NO
NO
NO
YES
NO
NO
NO
NO
NO
NO
NO
YES
NO
NO
Public Authority?
Credit Union?
NO
NO
NO
NO
NO
YES
NO
NO
NO
NO
NO
NO
NO
Yes
Outcome
Eligible Deposit
Not Eligible Deposit
Not Eligible Deposit
Not Eligible Deposit
Not Eligible Deposit
Not Eligible Deposit
Not Eligible Deposit
Is the Account Eligible by Deposit-Type?
5
Eligibgle for FSCS Protection by Deposit-Type Rules
Type of Deposit
Any
1
2
3
4
5
6
Collective Investment
Undertakings
NO
YES
NO
NO
NO
NO
Pensions and Retirement
Funds
NO
NO
YES
NO
NO
NO
Laundered Money
Unidentified Holder
'Own Funds'
NO
NO
NO
YES
NO
NO
NO
NO
NO
NO
YES
NO
NO
NO
NO
NO
NO
YES
Outcome
Eligible Deposit
Not Eligible Deposit
Not Eligible Deposit
Not Eligible Deposit
Not Eligible Deposit
Not Eligible Deposit
9
6
Is the Account Eligible by Geography?
Eligible for FSCS Protection by Geography?
Geography Rules
Any
Placed Inside EEA
Placed Outside EEA
1
YES
NO
2
NO
YES
7
Outcome
Eligible Deposit
Not Eligible Deposit
Is it a Beneficiary Account?
Is the Account a Beneficiary Account?
Beneficiary Account Rules
Any
Account Flagged as BEN?
1
YES
2
NO
Outcome
Benficiary Account
Not Beneficiary Account
10