ESAS Austraclear NZ
Electronic Registry Interface

Overview: ESAS-Austraclear NZ System and Operation

• A brief overview of ESAS-Austraclear².
  The ESAS-Austraclear New Zealand system (ESAS-Austraclear NZ) consists of two logically separate real-time settlement applications - ESAS and Austraclear. Physically the applications co-exist on one computer, sharing physical and application resources.
  1. ESAS
     ESAS is the Reserve Bank of New Zealand's Exchange Settlement Account System. ESAS has been in operation since March 1998 and is part of the implementation of the New Zealand Real-Time Gross Settlement (RTGS) environment. The ESAS system is owned and operated by the Reserve Bank of New Zealand.
     
     There are two interfaces that connect to ESAS; the Austraclear NZ system, which is used for processing securities and funds transfers, and the ESAS/SWIFT interface, which carries instructions into ESAS from the Same Day Cleared Payment service (SCP) which is used by banks for high-value cash transactions.
     
     The terms and conditions of the Exchange Settlement Account are governed by a contract entered into by the Reserve Bank of New Zealand and the Accountholder - this contract is referred to as the Exchange Settlement Account Terms and Conditions.
     
     RTGS makes the New Zealand financial system more robust by processing and completing large payments, transaction by transaction throughout the day, and posting these irrevocably to banks accounts at the Reserve Bank before value is credited/debited to customers. ESAS members (Accountholders - all of whom are currently registered banks) utilise SWIFT to route settlement transactions to ESAS. On an average day 6000-7000 SWIFT transactions, with an approximate value of NZ$35 billion are being settled on ESAS.
  2. Austraclear
     The Austraclear NZ system provides depository and settlement services for wholesale financial markets. The system is a real-time service for clearing and settlement of high-value transactions involving debt securities and equities, and also for cash transfers.
     
     The Reserve Bank has operated the Austraclear system since June 1990³ under a formal contractual agreement with Austraclear Limited. Software support and maintenance services for the Austraclear NZ and ESAS systems are provided by Datacom Systems (Wellington) Limited⁴.
     
     
     During 2006-2007 the Austraclear NZ system underwent a significant technology upgrade, extending support for the system until at least 2010, and possibly out to 2015.
• ESAS-Austraclear Infrastructure
  The ESAS-Austraclear system runs on a single server, with two identical ESASAustraclear systems housed at two processing centres - one at the RBNZ building in Wellington and the other at a facilities management site in Auckland. This configuration is shown in diagram 1 below.

Diagram 1 ESAS-Austraclear NZ System and Network Structure.

Both sites and systems are continually live and synchronized, with one system being designated "production" at any point in time. The location of the production system operation is alternated between Wellington and Auckland every few weeks or switched immediately (within 15 minutes) if required.

The ESAS-Austraclear system utilises open system and/or International Standard protocols wherever possible to simplify and reduce the costs of member connections and access, as well as application use and financial market integration. A key component in this design strategy is to encourage members to implement fully automated Straight Through Processing (STP) environments based on SWIFT⁵ messaging (ISO15022).

Members must install the client ESAS-Austraclear code (a free java runtime application) on their PC, and can then access Austraclear using either:

1. The Internet, or
2. The private ESAS-Austraclear network (router access using Telecom's One-Office).

Alternatively members can use direct access to Austraclear (application-toapplication) from their own systems using SWIFTNET to route traffic to the Austraclear-SWIFT Interface.

Members accessing ESAS-Austraclear via the Internet or Router access utilise Secure Sockets Layer (SSL) technology to encrypt traffic from the member's PC to the ESAS-Austraclear server - this is in addition to the underlying network encryption. Members accessing the system via the Internet are also required to provide network authentication using RSA SecurID token cards.

To maximise availability and reliability, the connection from each ESAS-Austraclear processing infrastructure i.e. Internet, Telecom's One-Office, or SWIFTNET, uses multiple connections and service providers.