The Bank of England has announced plans to take over operation of the UK's high value payment system (HVPS) in order to enhance financial stability.
The HVPS – which guarantees same-day settlement finality for payments of any value – is currently managed and operated by CHAPS Co.
However, the Bank has now decided to adopt a “direct delivery” model used in the overwhelming majority of jurisdictions around the world, following recommendations by the International Monetary Fund and support from the Financial Policy Committee.
“Over the past 32 years CHAPS has become known the world over as a name that can be trusted and this is thanks to the endeavours of CHAPS Co and its participants,” said Tim Fitzpatrick, chief executive of CHAPS Co.
“The Bank is now well placed to take CHAPS' system resilience up to the next level in the changing payments landscape.”
Direct delivery will enable the Bank to manage risks across the entire HVPS as a single entity.
The Bank is working with CHAPS Co and its stakeholders to deliver a swift and orderly transition, with the aim of completing the move in the latter part of 2017.
The news was outlined in a blueprint for the Bank's new Real-Time Gross Settlement (RTGS) service, which is designed for higher resilience, broader access and improved user functionality.
Changes will include an increased number and range of firms able to access RTGS directly in order to settle their payment flows and the ability to interface with distributed ledger technology in future.
On average, RTGS currently settles around £500bn between banks in sterling central bank money each day.
“RTGS affects everybody across the country, so it is vital that this critical piece of national infrastructure keeps pace with a fast-changing payments landscape,” added Andrew Hauser, executive director for banking, payments and financial resilience at the Bank.
“This blueprint sets out a vision of a renewed RTGS service that will safeguard financial stability whilst enabling innovation.
“Crucially, [the changes] are also designed to improve risk management across the system and ensure continuity of service.”
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