Why Do VASPs Need the InterVASP Messaging Standard (IVMS 101)?

The need for the interVASP Messaging Standard (IVMS 101) arose in 2018 with the updated Financial Action Task Force's (FATF) Recommendations, in particular Recommendation 15 (New Technologies) which brought activities involving virtual assets in scope of the FATF standards.

As per paragraph 7(b) of the Interpretive Note to Recommendation 15,

“[…] originating VASPs obtain and hold required and accurate originator information and required beneficiary information on virtual asset transfers, submit this information to beneficiary VASP or financial institution (if any) immediately and securely.

[…] beneficiary VASPs obtain and hold required originator information and required and accurate beneficiary information[…]”.

In practice, VASPs faced numerous challenges in the transmission of originator and beneficiary information, including variances in the format of data exchanged.

This was due, in part, to lack of standards, varying languages and scripts, differing national requirements, etc. These differences led to increased difficulty in the sending and receiving of consistent, complete, and readable transaction data.

Ex. Calendar dates are either written as DD/MM/YY, MM/DD/YY, etc.

What Is the InterVASP Messaging Standards (IVMS101)? 

In 2020, the interVASP Working Group, consisting of representatives from various international industry organisations, published the interVASP Messaging Standard (IVMS101), modeled after ISO 20022 messaging standard.

 As defined by interVASP, IVMS101 is a “Universal common language of the required originator and beneficiary information between virtual asset service providers“. 

The IVMS101 standard establishes a universal lexicon, presents a data model for messages and defines data constraints, all which serve to ensure the formation of consistent and complete data prior to transmission between VASPs.

Travel Rule solution providers and builders have since integrated this model (you may have noticed “IVMS101 compliant” in their marketing materials), meaning that their software either formats or verifies the quality and completeness of messages in accordance with the IVMS101 standard.

What Is the OpenVASP Association’s Role 

OpenVASP is a Swiss non-profit Association that supports global VASPs to meet anti-money laundering and sanction requirements by providing free, open-source and helpful resources.

To support the community in transmitting information in compliance with the IVMS101 standard, the OpenVASP Association created the InterVASP Messaging Standard IVMS Validator in collaboration with 21 Analytics.

Additionally, OpenVasp is one of the driving forces pushing for the future update of IVMS101 to include more data sets such as transactional data.

What Is the InterVASP Messaging Standard IVMS Validator? 

The IVMS Validator verifies whether originator or beneficiary data is formatted correctly, readable by compliant software or protocols, and is ready to be exchanged.

This free resource allows VASPs, protocol designers and implementors to stick to a single standard for travel rule messaging; one that complies with IVMS101.This is key for VASPs to be able to communicate with each other in the most efficient ways with the least impact on the customers’ journey.

What About Interoperability?

One of OpenVASP’s main objectives is to promote interoperability between travel rule protocols and global compliance. When all protocols use the IVMS standard, interoperability is significantly increased. Without a similar data format, automatic matching of data exchanges is hindered.

The IVMS Validator supports interoperability between travel rule protocols by ensuring adherence to the same message formatting standard prior to data transmission.

Read: What is the Travel Rule Protocol (TRP)?

VASPs, engineers and developers can use the IVMS Validator to check if their structured data is compatible with the IVMS101 data model standard, which supports the interoperability of different travel rule protocols.

Successful validation of data using the IVMS Validator  

An error message will appear if the data is input incorrectly or not in line with the IVMS specifications. Using this information, the user can modify their code to be compatible with the IVMS101 standard, increasing interoperability.

As Chris McAteer, President of the OpenVASP Association, states:

“We are strongly committed to ensuring free resources are available to the community to support travel rule compliance. Our IVMS Validator demonstrates this in a very practical way”.

Find out more about the OpenVASP Association and its objectives by clicking here.