«Section E – Electronic Items November 2006 1 © Jamaica Clearing Bankers Association 2006 Jamaica Clearing Bankers Association Automated Clearing ...»
Jamaica Clearing Bankers Association
Automated Clearing House (ACH)
Section E – Electronic Items
November 2006 1
© Jamaica Clearing Bankers Association 2006
Jamaica Clearing Bankers Association Automated Clearing House (ACH)⎯ Rules
Table of Contents
E.1 Glossary of Terms
E.1.1 “ACH Operator” or “Automated Clearing House Operator
E.1.2 “ACK/ATX – (Acknowledgement Entry)
E.1.4 “ANSI ASC X12.5” (Interchange Control Structure)
E.1.5 “ANSI ASC X12.6” (Application Control Structure)
E.1.7 “Automated Clearing House” or “ACH”
E.1.8 “BPR or BPS Data Segment” or “Beginning Segment for Payment Order/Remittance Advice”
E.1.9 “Banking Day”
E.1.10 “Business Day”
E.1.11 “CCD Entry”
E.1.13 “CTX Entry”
E.1.14 “Consumer account”
E.1.15 “Electronic Funds Transfer”
E.1.17 “Existing Relationship”
E.1.19 “Midnight of a banking day”
E.1.20 “Non-Settled entry”
E.1.22 “Originating Depository Financial Institution” or “ODFI”
E.1.24 “Participating Depository Financial Institution” or “Participating DFI”
E.1.26 “PPD Entry”
E.1.27 “Prenotification Entry
E.1.29 “Receiving Depository Financial Institution” or “RDFI”
E.1.30 “Receiving Point”
E.1.31 “Recourse Period”
E.1.32 “Retention Period”
E.1.34 “Sending Point”
E.1.35 “Settlement Date”
E.10 Cheque Truncation Entries
E.10.2 Definition of “ODFI”
E.10.3 Definition of “RDFI”
E.10.4 Electronic Presentment
E.10.6 Warranties and Liabilities
The Jamaica Clearing Bankers Association (JCBA) acknowledges the National Automated Clearing House Association ACH Rules as a source and guiding document for the JCBA Automated Clearing House Rules.
© Jamaica Clearing Bankers Association 2006 Jamaica Clearing Bankers Association Automated Clearing House (ACH)⎯ Rules E.2 Rules Application and Compliance E.2.1 Application of Rules These rules apply to all entries and entry data transmitted through the ACH Operator.
E.2.2 Compliance with Rules E.2.2.1 Agreement to Comply Each Participating DFI and the ACH Operator agree to comply with these rules and warrant that it is able to comply with all applicable requirements of these rules and that it will comply with the rules enforcement procedures prescribed by the Association.
E.2.2.2 Audits Each Participating DFI shall conduct or have conducted audits of its compliance with these rules at least annually in accordance with the procedures prescribed by the Association.
E.2.2.3 Compensation The settlement of claims for compensation between Participating DFIs shall be governed by the procedures contained in Rule A5 (Items in Dispute), Rule A6 (Arbitration) and Rule A7 (Interest Claims) as the case may require.
E.2.2.4 Arbitration The settlement of disputes arising under these rules between Participating DFIs shall be governed by the procedures contained in Rule A6 Arbitration.
E.2.2.5 Competent Court Disputes arising under these rules between participating DFIs or between a participating DFI and the Operator are governed by Jamaican law.
E.2.2.6 Recourse Periods A Participating DFI may return an entry outside of the recourse periods and timelines stipulated in these Rules, subject to) the acceptance of the DFI receiving such an entry.
E.2.3 Excused Delay Delay by a Participating DFI or the ACH Operator beyond the time limits prescribed or permitted by these rules may be excused if the delay was caused by the interruption of communication or computer facilities, suspension of payments by another Participating DFI or the ACH Operator, war, emergency conditions, failure of equipment, or other circumstances beyond the control of the Participating DFI or the ACH Operator, provided it exercises such diligence as the circumstances require. Any accommodation granted in these circumstances does not constitute an entitlement.
E.2.4 Days on Which Institution or Facility is Closed Any entry or entry data required by these rules to be made available or transmitted by a Participating DFI or the ACH Operator on or by a day that is not a banking day for both the sending party (ODFI), and the receiving party (RDFI) or the ACH Operator may be made available or transmitted on the next day that is a banking day for both the sending and receiving parties. This rule only applies where an entry will be received on the same day it is transmitted.
© Jamaica Clearing Bankers Association 2006 Jamaica Clearing Bankers Association Automated Clearing House (ACH)⎯ Rules E.2.5 Records Each Participating DFI and the ACH Operator must retain records of all entries, including return and adjustment entries, transmitted from or to the ACH Operator. These records must be retained for the prescribed Retention Period. The Participating DFI must, if requested by its customer, or any other Participating DFI or the ACH Operator which originated, transmitted, or received the entry, provide the requester with a printout or reproduction of the information relating to the entry. A Participating DFI may impose a reasonable charge for the provision of such information.
E.2.6 Choice of Law These rules and the rights and obligations of a party with regard to a credit entry subject to Rule A1 General Rules – Items Acceptable for Clearing and E5.4 shall be construed in accordance with and governed by the laws of Jamaica.
© Jamaica Clearing Bankers Association 2006 Jamaica Clearing Bankers Association Automated Clearing House (ACH)⎯ Rules E.3 Origination of Entries E.3.1 Prerequisites to Origination The following sub-sections detail the prerequisites an Originator must fulfill prior to initiating the first credit or
debit entry to a Receiver or to a Receiver’s account with an RDFI:
E.3.1.1 Originator Authorization and Agreement The Originator must authorize the ODFI in writing, or by non-written means to transmit, and to credit or debit the amount of one or more entries to the Receiver’s account.
E.3.1.2 Receiver Authorization and Agreement The Receiver must authorise the Originator to initiate the entry to the Receiver’s account and such authorisation must also specify the manner in which revocation should take place. In the case of debit entries to an account, the authorization must be in writing, signed or similarly authenticated. The term similarly authenticated includes the use of a digital signature or other code. To meet the requirement that an authorization be in writing, an electronic authorization must be able to be displayed on a computer screen or other visual display that allows the communication to be read. The authorization also must be readily identifiable as an authorization, must clearly and conspicuously state its terms, and must provide that the Receiver may revoke the authorization only by notifying the Originator in the manner specified in the authorization. In the case of credit entries, the authorization may be provided orally or by other non-written means. Entries described in Sub section E.3.1.3 (Exception to Authorization Requirement) are excepted from these Receiver authorization requirements.
E.3.1.3 Exception to Authorization Requirement If both the Originator and Receiver are natural persons, no authorization by the Receiver is required for credit entries, and no warranty with respect to that authorization is made by the ODFI. The provisions of Subsection E.4.5 (Records) and Subsection E.5.1.1 (Right to Information Regarding Entries) are not applicable to the entries described in this Subsection E.3.1.3.
E.3.1.4 Notice by ODFI In the case of a credit entry, the ODFI shall provide the Originator with notice that the entry may be transmitted through the ACH.
This notice may be included as part of an agreement entered into by the Originator binding the Originator to these rules, or it may be provided to the Originator separately.
E.3.1.5 Notice by RDFI In the case of a credit entry, the RDFI must provide the Receiver with notice that the entry may be transmitted through the ACH.
This notice may be included as part of an agreement entered into by the Receiver binding the Receiver to these rules, or it may be provided to the Receiver separately.
These rules do not require the RDFI to provide the Receiver with notice that the RDFI has received the entry unless the RDFI has agreed to do so.
E.3.2 Warranties and Liabilities of Originating Depository Financial Institutions E.3.2.1 ODFI Warranties
Each ODFI sending an entry warrants the following to each RDFI, the ACH Operator, and the Association:
E.126.96.36.199 Authorization by Originator and Receiver Each entry transmitted by the ODFI to the ACH Operator is in accordance with proper authorization provided by the Originator and the Receiver.
© Jamaica Clearing Bankers Association 2006 Jamaica Clearing Bankers Association Automated Clearing House (ACH)⎯ Rules E.188.8.131.52 Timeliness of Entries Each credit entry is timely, and each debit entry is for an amount which on the Settlement Date will be due and owing to the Originator from the Receiver, is for a sum specified by the Receiver to be paid to the Originator, or is to correct a previously transmitted erroneous credit entry.
E.184.108.40.206 Compliance With Other Requirements All other applicable requirements of Section E.3.1 (Prerequisites to Origination) concerning the authorization and entry have been satisfied, the entry has not been reinitiated in violation of Section E.6.1.7 (Reinitiation of Returned Entries by the ODFI), and the entry otherwise complies with these rules.
E.220.127.116.11 Revocation of Authorization At the time the entry is transmitted to the ACH Operator, the Originator’s authorization has not been revoked, the agreement between the ODFI and Originator concerning the entry has not been terminated, and neither the ODFI nor the Originator has actual knowledge of the revocation of the Receiver’s authorization or of the termination of the arrangement between the RDFI and the Receiver concerning the entry.
E.18.104.22.168 Termination of Authorization by Operation of Law At the time the entry is processed by an RDFI, the authorization for that entry has not been terminated, in whole or in part, by operation of law. This subsection shall not apply if the RDFI has actual knowledge of the circumstances giving rise to such termination at the time it processes the entry and the ODFI does not have such actual knowledge.
E.22.214.171.124 Transmittal of Required Information Each entry transmitted by the ODFI to the ACH Operator contains the correct Receiver account number and all other information necessary to enable the RDFI to comply with the requirements of Section E.5.5 (Periodic Statements) except for information within the purview of the RDFI’s relationship with the Receiver.
Information transmitted with an entry is payment related and conforms to the requirements of Appendix Two (ACH Record Format Specifications).
E.126.96.36.199 Sending Points An entry containing the routing number of an ODFI which is transmitted to the ACH Operator by a Sending Point used by that ODFI to transmit entries to the ACH Operator on its behalf is transmitted pursuant to an agreement entered into between the ODFI and that Sending Point to transmit the entry.
E.188.8.131.52 Audits The ODFI and any third-party service provider that has acted on behalf of the ODFI with regard to the entry are in compliance with the audit requirements prescribed in the Constitution, which provide for an annual audit of compliance with these rules.
E.3.3 Limitation Notwithstanding anything in these rules to the contrary, the warranties contained within Subsection E.3.2.1 (Warranties) and the requirements of Subsection E.3.1.2 (Receiver Authorization and Agreement) do not apply to the goods or services to which the entry relates.
© Jamaica Clearing Bankers Association 2006 Jamaica Clearing Bankers Association Automated Clearing House (ACH)⎯ Rules E.3.4 Liability for Breach of Warranty Each ODFI breaching any of the preceding warranties shall indemnify every RDFI, ACH Operator, and the Association from and against any and all claim, demand, loss, liability, or expense, including attorneys’ fees and costs, that result directly or indirectly from the breach of warranty or the debiting or crediting of the entry to the Receiver’s account. This indemnity includes, without limitation, any claim, demand, loss, liability, or expense based on the ground that the debiting of an entry to an account resulted, either directly or indirectly, in the return of one or more items or entries of the Receiver due to insufficient funds. This indemnity also includes without limitation, any claim, demand, loss, liability, or expense resulting from the failure of the ODFI to comply with the provisions of these rules or with Jamaican Law.
E.3.5 Reversing Files E.3.5.1 General Rule If an Originator, ODFI, or the ACH Operator has mistakenly initiated a duplicate file or a file in which each entry or each entry in one or more batches contains erroneous data, and no right to recall those entries otherwise exists under these rules, the Originator, ODFI, or the ACH Operator may initiate a file of entries (referred to as a “reversing file”) in accordance with Appendix Two (ACH Record Format Specifications) and this Section E.3.5 to reverse each entry of the duplicate or erroneous file or batch(es).
E.3.5.2 Limitations on Initiation of Reversing Files Each reversing file initiated by the Originator or the ODFI must be initiated in such time as to be transmitted or made available to the RDFI(s) within one banking day after the Settlement Date of the duplicate or erroneous file or batch(es). The file must be transmitted to the ACH Operator within 24 hours of the settlement of the original file.