Bank of England publishes policy for omnibus accounts in RTGS

The Bank of England already offers a variety of models that enable payment systems to settle in central bank money, the ultimate risk-free asset. To support ongoing industry innovation, the Bank has now added a new model, which can allow the Bank to support a greater range of payment systems.
Published on 19 April 2021

News release

The Bank of England has published a policy regarding omnibus accounts: a new type of account available as part of our Real-Time Gross Settlement (RTGS) service.

The Bank of England already offers a variety of models that enable payment systems to settle in central bank money, the ultimate risk-free asset. To support ongoing industry innovation, the Bank has now added a new model, which can allow the Bank to support a greater range of payment systems. Innovative payment services have the potential to reduce systemic risks and save costs for UK financial institutions and businesses. The introduction of the omnibus account model aligns with the commitment made in RTGS Renewal Blueprint to enable RTGS to interface with a wider range of payment systems, including those using Distributed Ledger Technology. Expanding direct access to payment systems is one of the building blocks identified by the Financial Stability Board to improve cross-border payments globally.

Under the new model, an operator of a payment system can hold funds in the omnibus account to fund their participants’ balances with central bank money. This will allow them to offer innovative payment services, while having the security of central bank money settlement. They can support a wide range of high-value payments, which could range from a commercial bank buying government bonds to a small business paying their suppliers.

Operators of new and existing payment systems can now apply to the Bank to open an omnibus account. The applicants will be assessed against the Bank’s eligibility requirements, which are designed to mitigate the risks to UK financial stability. The Bank has worked with HM Treasury to confirm that systemically important payment systems accessing omnibus accounts could be supervised by the Bank under the existing regulatory framework.

Notes to editors

  1. See omnibus account policy for a detailed description of how they work, account terms and eligibility criteria.
  2. Under the omnibus account model, participants fund their balances in the payment system by sending funds to the omnibus account via CHAPS. The participants can then exchange payment instructions on behalf of their customers (for instance, a company paying their supplier) without having to update the RTGS ledger.
  3. Payment systems operators interested in applying should email rtgschapsaccess@bankofengland.co.uk.
  4. The Bank’s payment and settlement services.

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