The Swiss National Bank (SNB), as well as the banks and PostFinance are connected online to the SIC system. SIC maintains a settlement account for each participant. That account is balanced daily with its corresponding sight deposit account at the SNB.

The participating financial institutions may submit their payment orders to SIC, where they are verified using electronic signatures and where data entry authorization is monitored with the help of master bank data. The payment order structure is also verified, and whether this particular payment order has been submitted before. After these verifications have been successfully completed, the ordering bank receives either a confirmation or an error message. Following the positive cover-funds verification, the payment is irrevocably settled: the appropriate accounts of the involved financial institutions are either credited or debited. The credit receipt is forwarded along with an electronic signature to the receiving bank who, in turn, electronically confirms receipt.

The SNB continually monitors the cover-funds status of the participant and will, if necessary, provide funds or credit to individual financial institutions. Inconsistencies in settlement or problems with individual participants can be addressed by the SNB, the supervising authority for the entire SIC system.

Real-time processing

Since SIC is an online system, transactions can be both submitted to and sent from SIC at any time. Incoming and outgoing payment orders are constantly monitored. The transactions are continually processed in real time – 24 hrs per day, according to the definitions of the SIC clearing day. This warrants that a financial institution can obtain current information about the status of their settlement account at any time.

The SIC clearing day

Within the parameters of the SIC clearing system a week is comprised of five days. Weekend transactions receive the settlement date of the following Monday. SIC is shut down between Saturday, 12:00 noon and Sunday 6:00 pm. Variations as well as bank holidays are listed annually in a circular newsletter.

A SIC clearing day lasts from approx. 4:40 pm of the previous day until 4:15 pm of the actual day and on weekends from Friday 4:40 pm until Monday, 4:15 pm.

Covered transactions only

For each individual transaction, the system verifies with the appropriate settlement account whether the funds are sufficient to settle the payment. Transactions are only executed if the necessary funds are available. Otherwise the payment is routed to a waitfile and kept pending until sufficient funds have become available through incoming payments, credits or a liquidity supply.

Moreover, SIC adheres to an additional rule of a real-time gross settlement system (RTGS) adding to the reliability of the entire system: PVP – payment versus payment. A transaction is only executed when a payment has reached irrevocable status. Only then is the settling process triggered – immediately and irrevocably.

Technical security

IBASEC, an interbank system, ensures that up to two million and more transmissions valued at more than 300 billion CHF daily are executed securely and confidentially between the financial institutions. The primary requirements and expectations that are met with its unique hardware and software combination are the following:

• Messages must be transmitted unadulterated
• The message sender must be evident
• Sending and receiving of messages cannot be disputed
• Confidentiality must be guaranteed during message transmission

Communications

The participating financial institutions are connected to the SIC system over Finance IPNet, a modern communications infrastructure. This is an Internet protocol (IP) based network.

Additional information

You can find additional information about the Swiss payment traffic in the following books and articles:

Author	Title	Note	Publisher
Swiss National Bank	Business Continuity Planning in the Swiss Financial Centre	pdf	SNB, February 2006
Strebel, Brigitte	Business Continuity Management	pdf	Schweizer Bank 12/04
Swiss National Bank	Report on the stability of the financial system	pdf	Quarterly Bulletin SNB, 2, June 2003
Heller, Daniel / Sturm, Andy	The role of the Swiss National Bank in the electronic payment system	pdf	Quarterly Bulletin SNB, 1, March 2003
Klein, Fritz / Palazzo, Guido	Kulturgeschichte des Geldflusses	order	Kaufmännischer Verband, Zürich
Schwinghammer Christian	Liquidity Saving Settlement Algorithms	pdf	Swiss Interbank Clearing, January 2003
Stephan Zimmermann	Switzerland Coined the Term RTGS	pdf	ClearIT, 14, August 2002
Gehrig, Bruno	SIC Can Really Be Termed a Success Story	pdf	ClearIT, 12, February 2002
Heller, Daniel / Nellen, Thomas / Sturm, Andy	The Swiss Interbank Clearing System	pdf	Swiss National Bank
Vital, Christian	The Architecture of Real Time Gross Settlement Systems	pdf	Quarterly Bulletin SNB, 4, December 1997
Geiger, Hans / Spremann, Klaus	Banktopologie	order	Paul Haupt Verlag, Bern
Klein, Fritz / Spremann, Klaus	Telegeld	order	Verlag Neue Zürcher Zeitung, Zürich
Lehmann, Gerd D.	Zahlungsverkehr der Banken	out-of-print	Kaufmännischer Verband, Zürich