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Home > Markets and Payments > Real-time settlement service
 

Real-time settlement service

​The Bank provides settlement services for the CHAPS payment system and the payment system embedded within the CREST securities settlement system. Both systems settle in real-time across accounts held by their direct participants at the Bank.

CHAPS is the sterling same-day system that is used for high-value/wholesale payments as well as for other time-critical lower value payments (such as property transactions).

  • The direct participants include the traditional high street banks as well as a number of international and/or custody banks. Many more financial institutions access the system indirectly, making their payments via one of the direct participants; this practice is known as agency and/or correspondent banking.
  • CHAPS sterling payment instructions are routed via the Bank’s Real-Time Gross Settlement (RTGS) system and settled individually across accounts by the sending and receiving direct participants. The Bank supports settlement of CHAPS payments through provision of secured intraday liquidity to the direct participants.
  • Direct participants use the SWIFT network and message standards to send and receive CHAPS payments, with a copy of each message being sent to the Bank for settlement.
  • The CHAPS system is operated by the Bank. Responsibility transferred to the Bank from the CHAPS Clearing Company (CHAPS Co) in November 2017. This change enables a single entity to manage risks right across the CHAPS system, enhancing financial stability.

Further information about CHAPS, including how to access the system, can be found on CHAPS information page.

CREST is the UK's securities settlement system providing real-time ‘Delivery versus Payment’ in central bank money for transactions in UK securities (gilts, equities and money market instruments).

  • The system operator is Euroclear UK & Ireland (EUI), part of the Euroclear Group. As of end-July 2015, there are 16 settlement banks in CREST. Other financial institutions settle their obligations through the CREST settlement banks.
  • Sterling settlement in CREST takes place in a series of very high-frequency cycles through the day; after each cycle the Bank is advised of the debits and credits to be made to the CREST settlement banks' accounts in the RTGS system as a result of the settlement activity performed by CREST in that cycle. The Bank supports settlement in CREST through the provision of intraday liquidity to the CREST settlement banks. This is provided via a same-day repo within CREST (under a procedure known as auto-collateralisation).

Further information about CREST, including how to access the system, can be found on EUI’s website.

Other high-value settlements

Many central banks settle CLS payments in their RTGS systems. This is a particularly important category of payments as CLS is the foreign exchange settlement system that eliminates foreign exchange settlement risk in participating currencies. In the UK, CLS is a direct participant of the CHAPS system for this purpose.

Payments under the Bank's Note Circulation Scheme (NCS) are also settled in RTGS. NCS allows its members (wholesale cash operators) to hold notes in custody for the Bank within their network of cash centres.

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