Canadian Cheque Standards Requirements The Canadian Payments Association (CPA) has taken another step forward in preparation for the transition to image-based clearing of paper payment items. Following the January 2005 publication of new specifications for Canadian cheques in CPA Standard 006, Part A, the CPA has now published specifications for some other imageable MICR-encoded payment items. At the same time, a number of clarifications to the cheque specifications have been made in response to questions raised since they were published. Cheque Specifications Several details of the Standard have been clarified through minor amendments. These include: the definitions of the Areas of Interest and the related clear areas have been revised; the wording of the restriction on VOID pantographs has been clarified; in the Date Field, the printing of Guidance Characters inside the Guidance Boxes for cheques where the date is completed manually is now optional (Date Field Indicators remain mandatory on all cheques, and Guidance Boxes are mandatory if the date is to be completed manually); the addresses of the Payor and the financial institution branch are now defined as optional. For more information, consult the summary of clarifications to cheque specifications. The deadline for all Canadian business cheques to conform with the new specifications as outlined in CPA Standard 006, Part A is June 30, 2007. The deadline for compliance with the specifications was originally set for December 31, 2006, but it has since been extended in order to allow businesses more time to make the necessary changes to their cheques and modify or update their softwares involved in cheque production. This timeline will continue to ensure that cheques are “image-friendly” in preparation for the transition to image-based clearing. These specifications are necessary to ensure that high-quality cheque images can be captured, both for clearing purposes and for delivery to clients, and to enhance processing efficiency. Since most consumers order their personal cheques through their financial institutions, these already follow a more standard format than business cheques. Consequently, it will likely be possible in most cases to continue to process “old-format” personal cheques on an interim basis until consumers have used up their current cheque supply, as long as suitable images can be captured from them. As of April 2005, all cheque orders made through financial institutions or their supplier have been fulfilled with “new-format” cheques. This approach will contribute to a smooth transition for consumers. Key changes to the cheque specifications include: Øadoption of a numeric date field in one of three specified formats (YYYYMMDD, MMDDYYYY or DDMMYYYY). Field indicators must be printed below the date field to indicate which format is being used. Bilingual date field indicators are accommodated for cheques using the international date format (YYYYMMDD); Ø a mandatory serial number in the MICR line encoded on the bottom of the cheque (until now the serial number has been optional); Øan increase in the minimum length of a cheque from 6” to 6 ¼”, or 15.88 cm, to ensure there is sufficient space to accommodate the mandatory serial number in the MICR line; Ø standardized positions for key fields on the cheque, such as the date field and the amount in figures; Ødisallowance of elements that may hinder the capture of images or data from the cheques (e.g. inverse printing, italics or slanted fonts, a bottom border printed below the MICR line and the use of black carbon on the reverse of cheques will not be permitted); Ø a provision to ensure that security features do not interfere with key data, or “areas of interest” as defined in Standard 006, Part A, either prior to imaging or post imaging; Ø new printing requirements on the reverse of the cheque so that image capture can be verified; Ø some revisions to technical specifications (e.g. maximum Print Contrast Signal) to ensure high-quality images can be captured. Cheque printers, software providers and organizations that print their own cheques are strongly encouraged to provide pre-production samples of their new cheques to their financial institution’s Quality Assurance Division to verify that they meet the new specifications. These organizations should contact their financial institutions for more information about the testing process and timelines. Specifications for Other Imageable MICR-Encoded Documents The CPA has also published specifications for some other imageable MICR-encoded documents in Section 6 of Standard 006 in June 2006. Specifications for some other imageable MICR-encoded documents have been published for: § bank drafts and money orders; § inter-member debits; § settlement vouchers; § point-of-sale contingency vouchers; § Canada Savings Bonds; § provincial savings bonds; § and Canada Post money orders. The complete specifications for other imageable MICR-encoded items are available in Section 6 of Standard 006, and a summary of the required elements of each of these items is also available. The deadline for implementation of the specifications for these payment items is slated for December 31, 2007. For further information, consult the following documents: Clarifications to Standard 006, Part A - Cheque Specifications (June 2006) Specifications for Other Imageable MICR-Encoded Documents: A Summary (June 2006) Overview of Changes to Cheque Specifications (Updated June 2006) Standard 006 Part A: Specifications for Imageable MICR-Encoded Payment Items(June 2006) Specifications for Imageable Cheques: A Quick Reference (Updated June 2006) New Cheque Sample Visuals (Updated June 2006) Standard 006 Appendix V: Quality Assurance Departments of Financial Institutions (Cheque Testing) Frequently Asked Questions: New Cheque Specifications (Updated December 2006) Summary Report on Stakeholder Consultations News Release Issued January 10, 2005