How IATA Currency Clearance Services Works
After becoming an ICCS Member by signing the standard Terms & Conditions and Pricing Agreement, the Member can designate which BSPs, CASSes, GSAs and/or Credit Card receivables they would like to have cleared via ICCS. The Member must also indicate a default instruction for the funds, designating their bank account and the currency.
ICCS then notifies the BSP's and/or CASSes that the Member would like to use ICCS. The BSP/CASS will then notify ICCS of the Member's Settlement Balance as soon as the data becomes available in the BSP/CASS data processing center.
The BSP/CASS Clearing Bank will then transfer the funds to the ICCS bank account instead of the Member's local bank account.
Members have access to the ICCS web-based Information & Netting (I&N) System, which allows them to view and print their reports showing the funds handled by ICCS (ICCS Sample Report and Explanatory Note (pdf)).
The ICCS Clearance Cycle is comprised of four consecutive working days:
- Day 1: Order Day - ICCS Members have the option to change their default instruction on the Order Day. If they do nothing, then ICCS will apply the default instruction. ICCS will confirm the receipt and acceptance of any Orders from the Member.
- Day 2: Contract Day - ICCS carries out multi-lateral, multi-currency netting to determine which currencies we must buy and sell to fulfil all the Members' default instructions. ICCS then takes out the required currency contracts at exchange rates based on inter-bank, benchmark rates for maturity on the ICCS Clearance Day.
Throughout the Order Day and the morning of the Contract Day, funds are received into the ICCS bank accounts from the BSPs/CASSes on their individual Settlement Dates and immediately begin earning interest for the members. The interest earned is distributed back to the ICCS Members quarterly.
- Day 3: Closing Day - ICCS verifies the receipt of all relevant funds and executes international payments, electronically, for value to the Members' designated bank accounts the next day, Clearance Day.
- Day 4: Clearance Day - The currency conversion contracts executed by ICCS mature, the outgoing payments executed by ICCS mature, the Members' bank accounts around the world are credited with funds for good value, and the Clearance is completed.