Underlying all Bolero Services is a unique infrastructure (Bolero Open4Trade) which is designed specifically to enable the secure, guaranteed exchange of trade information and legally binding trade documents. This core infrastructure enables the practical delivery of automation and collaboration to all trade counterparties.
Developed jointly by SWIFT and Bolero, the Core Messaging Platform (CMP) was designed specifically for electronic collaboration of trade documents (in contrast to the SWIFT service which is designed to handle instructions, not documents). As a result the Bolero technology is independent of all SWIFT services and implements a range of additional capabilities necessary to provide solutions for the more complex trade and trade finance collaborative process.
Bolero services were originally hosted by SWIFT as part of the joint venture agreement which established the Bolero company. During 2010, the operation of all Bolero services was transitioned to a specialist global hosting partner in order to provide further scalability, increased disaster recovery, 24*7 global support, high availability and SSAE 16 compliance.
The Bolero infrastructure (Bolero Open4Trade) consists of five primary components; the Core Messaging Platform, the Bolero Rulebook, the Title Registry, the Bolero Collaboration Libraries and the Bolero Compliance and Matching engine:
Core Messaging Platform
The Core Messaging Platform (CMP) provides for secure multi-bank electronic communication between all parties involved in a trade or trade finance transaction. Designed specifically for the secure and non-repudiable communication of electronic trade documents, each message corresponds 1:1 with the actual corporate-bank-corporate business process (no need to send multiple messages or use separate electronic channels, or abstract the message in any way) and each message can contain up to 30 electronic documents. Core features of the CMP include:
- Known counterparty – messages are sent only to known parties (who are signatories to the legally binding rulebook)
- Guaranteed delivery of the message and documents
- Single Message, unlike SWIFT, a single Bolero message will reflect each flow and this message can include up to 30 documents identified specifically as certain documents and/or attachments
- Message Validation, ensuring the message and content is properly formatted to enable STP for both sender and receiver (and without relying on the corporate’s application or interface)
- Non-Repudiation, of the message and the documents included in the message
- Legally Binding documents, across all jurisdictions. Bolero documents can be either draft documents or final documents. The final documents are legally binding documents
- Delivery Notification, Bolero offers delivery and non-delivery notification. For each message a delivery timeout can be specified. The CMP informs the sender of the message about the late delivery of the message. The CMP also informs the sender of the message when the receiver has picked up the message.
- Document Originality, By ‘fingerprinting’ all documents sent over the CMP, it is possible to both check and guarantee document originality at all times and between all parties
- Time Stamp, on all messages
- eBL, specific functionality to handle a fully functional electronic bill of lading
The CMP provides a state-of-the-art secure channel for banks engaged in trade finance collaboration with their corporate customers. Most importantly, the CMP provides end-to-end security and document certainty whilst insulating the bank from technology, compliance, reputational and other risk associated with bank to corporate connectivity.
One of the main reasons why the use of electronic commerce has not increased in line with technological capability is that there is little law governing its use. The existing world of e-commerce is characterised by a large number of bi-lateral contracts, many of which embody different approaches and principles.
A key component of the Bolero service is the provision of a unique legal framework.
Companies use electronic commerce in the absence of specific international and national legislation, but the absence of legal clarity has slowed acceptance. The exchange of data electronically itself does not pose a problem, but when the data represents contracts, negotiable instruments or payments, a clear legal framework is required for these transactions to work. The Bolero Rulebook establishes a contractually binding set of rules which all Users of the Bolero service are required to sign. It provides a legal framework allowing Users to replicate the legal results currently achieved in a paper environment.
The Bolero Rulebook was developed following a comprehensive feasibility study into the legal issues to which the concept of Bolero gives rise. The study was undertaken by Allen & Overy and Richards Butler, two major international law firms based in London, in consultation with legal representatives from the 20 major legal jurisdictions globally, and represents probably one of the most extensive studies ever undertaken into electronic commerce related legal issues.
The Rulebook is a multi-lateral contract that binds each user to every other user in relation to their use of the Bolero service. The purpose of this contract, which is at the core of the Core Messaging Platform (CMP) structure, is to ensure that every User agrees to be governed by a common set of rules enshrining the key elements of the Bolero service. For example, that users agree, as between each other, that electronic communications will be treated as valid, that no user will deny that it sent a message bearing its digital signature and that messages so signed will bind the User (the company).
In addition, the Rulebook provides the legal rules that underpin the system for the ability to transact electronic Bills of Lading (Bolero Bills of Lading) through an application that mirrors the rights and obligations of those users in relation to the international carriage of goods (Importers and Exporters, banks, carriers, forwarders and other intermediaries).
Bolero Collaboration Libraries
Bolero has taken the lead in delivering the full advantage of electronic commerce (including eUCP) by developing a comprehensive set of electronic trade documents, known as BoleroXML and based on the XML syntax. These BoleroXML documents are founded upon a common business model that is technology-independent and designed for Straight Through Processing (STP).
BoleroXML is a validated, global, cross-industry message format that allows all parties in a trade chain to interact seamlessly with each other by automating their information exchange, all within a secure environment.
Bolero has comprehensively mapped all the end-to-end flows related to each Trade Finance instrument (Export L/C, Import L/C, Guarantees, Documentary Collections, ePresentation) providing a rich structured BoleroXML data format for each business flow. These standards are partly ‘externalisations’ of interbank SWIFT messaging and other local standards, but extended to meet the full structured data requirements of both corporate and bank participants. The one-to-one relationship between a BoleroXML format and the related process substantially simplifies interoperability, automation, and validation.
The document standards related to a specific instrument are aggregated into a ‘Collaboration Library’. A Collaboration Library exists for each area of trade finance supported by the Bolero service. New Collaboration Libraries are added for new Bolero services.
The Collaboration Libraries are core to providing interoperability, external mapping into other formats and to the comprehensive validation of all documents sent over the Bolero channel.
In addition to the structured documents contained in the Bolero Collaboration Libraries, Bolero also supports a complete range of other structured and unstructured trade documents. Unstructured documents can be presented in any format, including all Microsoft, pdf, image and text formats.
Bolero also provides translation services that enable translation of structured formats to standard formats like DTA and SWIFT as well as user specific formats.
The Bolero Title Registry provides a repository and workflow for the creation and transfer of negotiable title documents. The Title Registry represents the world’s only implementation of an open service enabling a fully electronic negotiable Bill of Lading.
The Title Registry is an application for recording and transferring the rights and obligations contained in a Bolero Bill of Lading.
The Bolero Bill of Lading possesses all the attributes of an electronic waybill but with all the benefits of control and pledging capability associated with paper Bills of Lading.
The Title Registry and Bolero Bill of Lading provide a fully functional equivalent to the paper Bill of Lading. The Bolero Bill of Lading can be created, transferred, amended, and surrendered. In each case, only authorised companies can instruct the Title Registry to complete a transaction.
Enhanced Security Interest
While a paper Bill of Lading can be transferred to a bank for settlement of a Documentary Credit, it only provides appropriate security when the bill is endorsed to the bank. In the Title Registry, this security interest is enhanced through the addition of a Pledgee. A Pledgee is a party whose rights and obligations over the Bolero Bill of Lading are exercised only when the pledge is enforced.
The Title Registry not only acts on instructions by authorised companies, but it also acknowledges the actions taken and automatically notifies affected parties. This enables operational controls to prevent sending the Bolero Bill of Lading to the wrong party, as well internal auditing of all activities.
The Title Registry prevents all amendments, unless authorised by the originating carrier, thus eliminating the potential for fraudulently altered Bills of Lading. When the Title Registry receives an amendment request, it suspends all actions on the Bolero Bill of Lading until the carrier grants or denies the amendment. The Title Registry also supports combining, splitting and switching Bolero Bill of Ladings in addition to normal one-to-one amendments.
In the paper world, an endorsement chain includes all parties involved in the Bill of Lading. The Title Registry also maintains an endorsement chain for each Bolero Bill of Lading, reflecting the transfer of rights and obligations between parties. In addition, the Title Registry also maintains a timestamp of each endorsement in the endorsement chain so that a fully accurate record of the Bolero Bill of Lading is provided.
Reconciliation and Compliance Engine
Bolero includes a powerful and comprehensive document reconciliation and compliance engine that can be configured for both traditional and open account trade document matching requirements. The layered architecture allows rapid implementation of unique rule sets without altering the underlying infrastructure.
It is used as a fully automated compliance engine at the heart of the Bolero Supply Chain Finance Application.