The Euro Changeover Guidance for the Business Sector Alexander Wells Manager, Technical Preparations N ational E uro C

1. The Euro Changeover Guidance for the Business Sector Alexander Wells Manager, Technical Preparations National Euro Changeover Committee

2. Topics Introduction Dual display Calculation of counter values (rounding and smoothing) FAIR

3. Dual Display Timetable €-Day 2007 2008 Voluntary Period Mandatory Period Cooling Off Period 1st Jan. – 30th June 1st July* - 30th June ‘08 1st July – 30th Sep. * Or when the IFCR is established, if later

4. Dual display Definition:The simultaneous display of a monetary value in both Lm and € Why do dual display? EuroBarometer surveys constantly indicate that more than 90% of the Maltese population would like to have Dual Display as a means of facilitaing euro changeover Price abuse is the number 1 fear of the Maltese! It is a proven safeguard that prepares the minds of people for euro adoption

5. Dual display Why do dual display at the correct rate? Take an example: a cappuccino priced at Lm1 Before €-day On / after €-day 1. Lm1.00 (€2.50) i.e. not at CPR Set price at €2.50 Public will think price didn’t rise! Set price at €2.33 Public will think price went down! 1. Lm1.00 (€2.33) i.e. at CPR Set price at €2.50 Public will notice the price rise Set price at €2.33 Public will know the price stayed the same

6. Dual display How to do dual display • Obtain counter-value using applicable rate • Ensure payment currency is more prominent (e.g. a combination of: • Put counter-value in brackets • Make the counter-value font smaller • Bolden the main (payment) value • Always round the counter-value to the nearest euro cent • On receipts and transaction totals, only apply dual display on the total amount; not at the item level

7. Dual Display - Exceptions Dual display is required whenever a monetary value is present, except: • in relation to transactions or services which are made between or rendered to organisations (B2B); • in relation to an Electronic Point of Sales System (EPOS) as provided by commercial banks to retail establishments; • fiscal receipts generated by cash registers (excludes POS);

8. Dual Display - Exceptions Dual display is required whenever a monetary value is present, except: • where equipment or price displays, electronic or mechanical, can only display one denomination and the cost for modification for dual display will bedisproportionate to the benefits • television advertising where both price and contact information are displayed for a very short period of time and where dual display may confuse the consumer • interactive voice response systems (payments/balances)

9. Dual display The essential points... Prices normally displayed to 3 decimal places, shall also be dual displayed to the same numberof decimal places Handwritten invoices: the consumer shall have the right to request a conversion table or the equivalent total value in € In the case of vending machines, dual display shall be applicable through a price-list of the items sold affixed to the machine. Gaming services, including gambling: a price list in dual display shall be prominently displayed at the point of sale or on the gaming machine.

10. Dual display Accepting payment in euro When accepting payment in euro both during the voluntary dual display period as well as during the mandatory dual display period the central parity rate or the irrevocably fixed conversion rate shall be applicable, respectively,without the addition of any charges The LN published Tuesday (9th) obliges bank to accept euro deposits into euro-denominated accounts without the imposition of charges. Moreover, banks willalso accept, without charge, euro deposits into Lm-denominated accounts as from the beginning of the mandatory period of dual display

11. Dual display Banking services Maltese lira deposits of cash and cheques into current and savings accounts across bank counters; Maltese lira cash withdrawals from savings accounts across bank counters; closure of savings and current accounts denominated in the Maltese lira across bank counters; on ATM ‘fast cash’ screen displays for the withdrawal of Maltese lira cash tariffs and scales of charges; final balances on all bank statements, including credit card statements; price tariffs and other monetary amounts displayed on bank websites (excluding internet banking)

12. Dual display Insurance Services In the case of life insurance policies, dual display shall apply on the premium amount due and on the capital sum and the annuity insured. In the case of non-life insurance policies, dual display shall apply on the premium amount due and the sums insured. Dual display shall also apply to any contractual changes which will affect the premium amount and the sums insured.

13. Conversions and Rounding Rounding of the euro value • The translation of amounts ‘to be paid or accounted for’ from Lm into euro (both dual display and migration) • Governed by EC Regulation 1103/97 • Standard market conventions apply: • CPR: €1 = Lm0.429300. Inverse rates (e.g. 2.32937) cannot be used • Round up/down to the nearest euro cent.If the euro result is exactly half way round up e.g., €1.465000 €1.47 • Rounding should only be applied at the point where a sum ‘to be paid’ or ‘accepted’ is arrived at. • Prices originally set at a higher level of accuracy can be translated to a higher level of accuracy also in euro • In a string of amounts conversion should be effected on the total amount not at item level to avoid rounding discrepancies.

14. Smoothing of rounded values • Smoothing is a price change. Consistent smoothing up will drive inflation • Smoothing should be ONLY applied for necessary convenience of payment: • Example: Lm10 parking fine: • When rounded: €23.29 • For ease of payment, could be smoothed to: €23.00

15. Rounding: Example Translating the following price in the advert: Lm0.08 / 0.429300 = 0.186349 = €0.19 In fact, showing cents as above can be confusing – is it Lm or euro cents? A clear notation would be: Lm0.08 (€0.19)

16. EUR 1062.62 x 0.4293 = Lm 456.18 Lm 5.38 / 0.4293 = EUR 12.53 Dual display - examples (1) Till Receipt Pay slip XYZ Retailer Ltd Republic Street Valletta XYZ Importer Ltd Name: Joe S Borg Pay date: 31.01.2008 Period: 1, 01 – 31 Jan 2008 20.09.2007 Item 1 0.43c Item 2 1.65c Item 3 3.30c -------------------------------------------------- Total Lm 5.38c € 12.53c

17. Lm 9.39 / 0.4293 = EUR 21.87 Dual display - examples (2)

18. FAIR Initiative • Regulated by Legal Notice on Dual Display/Euro Pricing Commitments and Benefits: • Fair pricing • Commitment to dual display • Commitment to training • Commitment to provide information about the euro • Organisations will be: • guaranteed nationwide publicity directly and through FAIR Mark • free training, support (one-to-one) and material • Recognised by their customers as trusted, fair-traders

19. FAIR Application process • Administered by Euro Observatory (MFIN) • Expression of interest (or submitting application) • Assignment of a Euro Assistant (or NECC Official for larger organisations and chains) • Implementation of first form of dual display (checked) • Staff awareness / familiarisation • Issue of acceptance material (acceptance letter, FAIR trust mark, participation card)

20. FAIR Initiative • 70 euro assistants are directly supporting retail outlets. Each euro assistant will be visiting and contacting an average of 90-100 outlets. • Larger organisations are supported directly by officials from the National Euro Changeover Committee • 700 organisations expressed interest in joining FAIR (by phone calls on Linja Ewro 154) within first six weeks • Over 300 organisations applied to join FAIR (by Jan 8th)

21. For more information: Visit our website: www.euro.gov.mtThank You!