LIXItech

CAL 1.4a (finally!)

Well, like all things LIXI, this has taken longer than we'd hoped but a draft release of LIXI CAL updated to support Anti-Money Laundering requirements has finally been published. This is a draft release and member comments are urgently sought to determine if the draft meets member needs. I cannot overstate this - if you are a CAL user you need to review this draft to determine if it is sufficient to enable you to comply with your interpretation of the AML requirements. If we have missed something important the only way we'll know is if you tell us.

LIXI members can view the draft schema here.

This draft is a modification of the CAL 1.4 standard and has been labeled CAL 1.4a. As I've mentioned previously our intention is to publish similar releases to modify CAL 1.2 and CAL 1.3 (CAL 1.2a and CAL 1.3a respectively). This will mean that all CAL users, regardless of the CAL release they are currently using, will only have to make the bare minimum of change to existing systems to be able to comply with AML requirements (e.g. if you are currently using CAL 1.2 you only need to adopt CAL 1.2a - you won't need to upgrade all the way to CAL 1.4a unless you want to). The changes needed to create CAL 1.2a and CAL 1.3a are very similar to those made to CAL 1.4 so these releases will be available very soon after we have confirmed that this draft release is acceptable.

This document describes the changes made to create CAL 1.4a.

Anti-Money Laundering - not that hard?

The draft requirements for changes to LIXI CAL to support AML laws have been up for a while now and appear to be reasonably stable. So I've gone through them to try to figure out exactly what sort of schema changes will be required to each of CAL 1.1, 1.2, 1.3 and 1.4. It all looks pretty straightforward, which is encouraging but I'm still concerned that some of the apparent simplicity is only a reflection of the fact that many LIXI members still haven't really looked at this problem yet. I suspect that, as has happened in the past, we won't get the real requirements until some real-world implementations are rolled out. Which means CAL 1.1a, 1.2a, 1.3a and 1.4a will quickly have to be replaced by a CAL 1.1b, 1.2b, 1.3b and 1.4b. That's one hell of a lot of stuffing around.

Needless to say I wish we had the LIXIpedia in place all ready...

Anti-Money Laundering

Draft requirements for AML/CTF (Anti-Money Laundering/Counter Terrorism Financing) are up in the Applications Working Group area on the LIXI site. Unfortunately it is far from easy to pin down just what the actual requirements will be - lenders have a fair bit of discretion about how they comply, plus they have a long non-prosecution period which makes them feel relaxed and comfortable about getting this work done. Which is great for them but LIXI needs to have updated standards available in time to support the first lender's who comply - which could be as early as the official start date of December 13.

Brokers are also facing this problem in that of course they don't want to have to comply with differing processes from every lender, but it is difficult for them to "encourage" lenders to agree on a common process (let alone do so quickly). Thankfully the MFAA has in fact made a lot of progress and has already prepared a solid draft common approach. I've used this common approach as a starting point for determining what will have to change in LIXI/CAL, but the bottom line is that the requirements I've published are still largely just my informed guesses and interpretations. We really need lenders to get in and review the requirements and comment on their completeness or otherwise, and this needs to happen SOON. To have CAL updated in time for implementations that may go live as early as Dec.13 we have absolutely no time to waste.

I know a lot of lenders are thinking that they'll just institute manual processes in parallel with the existing electronic submissions, and of course this can be workable in the short term. But really, it's going to annoy customers and brokers - and no lender can afford to do that for long in a competitive environment. It is in everyone's interests for us to get a comprehensive, LIXI-compliant solution in place ASAP.