SAP onboarding of FXPs (or foreign PSPs)

An FX Provider (or foreign PSP that wish to provide their own FX) has responsibility for informing Nexus of the specific SAP accounts that the FXP wishes to use for each IPS. (The PSP performing the role of an SAP is not required to declare itself directly to Nexus as an SAP.)

• As the SAP is sending and receiving payments on behalf of the FXP, the SAP is obliged to undertake due diligence upon the FXP. This includes standard Know Your Business checks as well as any local compliance requirements.

• Once the FXP informs Nexus of the SAP and specific accounts it wishes to use, the Nexus Technical Operator (NTO) will contact the SAP to verify that the FXP owns the provided accounts and that the SAP is willing to act as SAP to the FXP.

• After successful verification of the account, the NTO will record these accounts into the system.

• Quotes issued by Nexus on behalf of the FXP will reference these validated accounts.

• These accounts will be locked within Nexus, and payments referencing other (non-registered) accounts for this FXP will be rejected.

• If an FXP wants to change the details of these accounts, they will have to contact the NTO, who will again validate the new details with the SAP before updating the Nexus software.

Streamlining the FXP onboarding process

The number of FXP-SAP relationships in Nexus can be significant, especially as the network scales. The number of relationships depends on the number of IPSs in the network, the number of FXPs, the number of currencies provided by each FXP, and how many of those FXPs use SAPs (rather than being an IPS member). It is therefore important to streamline the FXP-SAP onboarding and due diligence process as Nexus scales.

To support this process, the Nexus scheme rulebook mandates that SAPs use the Wolfsberg Correspondent Banking Due Diligence Questionnaire (CBDDQ) when onboarding FXPs. This will save effort across all Nexus participants, as PSPs, FXPs and SAPs will all use the standard CBDDQ questionnaire.