Large-scale, bank-to-bank transfers in the UK will have more elbow room for completion from next year, following changes to the go-to payment network.
From summer 2016 onwards, the daily closing time for the Clearing House Automated Payment System (CHAPS) will be extended by one hour and 40 minutes, to 6pm.
The aim of the change is to bring CHAPS – which processes 92% of the UK’s high-value sterling sums, such as mortgages – closer in line with the typical business day. As such, businesses who use it will be able to pass the extension on to customers, boosting their ability to meet crucial deadlines.
Based upon feedback from end users, an 18-month review by the Bank of England concluded it was necessary to give the CHAPS community more time to action important payments.
The new hours will also be implemented across the CREST network, used to finalise securities deals.
CHAPS CEO Mark Hale said that his organisation has “listened to its users”, and is delighted to enhance its service to better meet their needs.
He added: “Our consultation with the financial services community, the users of CHAPS and Euroclear UK & Ireland – the operators of CREST – demonstrated that their ability to make high-value sterling payments later in the business day would provide tangible benefits.
“CHAPS is a fundamental market utility that processes 92% of sterling payments in value and it is critical that we are aligned with the needs of all users, from wholesale banks and corporates to individuals.”
Minouche Shafik, deputy governor, Markets and Banking at the Bank of England, said: “This is a welcome step forward for the CHAPS and CREST payment and settlement systems.
“Extending the settlement day will provide greater flexibility to businesses and financial institutions when making decisions on funding, investment and risk management, and a longer window during which housing transactions can complete.”
She added: “We expect all participants to implement the change and pass on the benefit to customers.”
CHAPS will confirm the exact date of the change later this year.
Find out more about CHAPS here (INSERT LINK http://www.chapsco.co.uk/)