Summary of changes to the Bank’s ISO 20022 migration announced January 2022

CHAPS Direct Participants

The migration of CHAPS to ISO 20022: Transition State 2 will now take place as a single event in April 2023, rather than two separate stages in June 2022 (migration from MT to MX (ISO) network) and February 2023 (enablement of enhanced data). Enhanced data will be immediately supported from April 2023; removing the need for an initial like-for-like implementation stage.

There will be a new test environment (the Pilot Platform) open to all CHAPS Direct Participants from summer 2022. This will support enhanced ISO 20022 messaging, and enable an extended testing period for enhanced messages.

Direct Participants who elected to migrate non-payment messages (e.g. statements, notifications and liquidity-related messages) from MT to ISO 20022 format when CHAPS transitions from the MT to MX (ISO 20022) networks will now see these messages migrate in April 2023. 

Direct Participants who elected to migrate non-payment messages (e.g. statements, notifications and liquidity-related messages) from MT to ISO 20022 format when the new core ledger goes live will now see these messages migrate in spring 2024. 

The framework for managing data truncation will remain in place. However between November 2022 and April 2023, CHAPS participants will now need to truncate enhanced messages into MT messages, rather than like-for-like ISO 20022 messages. MT and like-for-like messages are similar in their data-carrying capacity. We will update the technical documentation and white-label communications supporting the framework by early February 2022.

We will issue updates to the testing windows, testing and readiness criteria to Direct Participants.

We will start to require use of additional data in certain specific CHAPS payments from summer 2024 instead of spring 2024, and will require use of structured addresses and remittance data from November 2025.

More information on those data requirements can be found in the policy document.

CHAPS Indirect Participants

For the majority of indirect participants (i.e. those who make CHAPS payments via a Direct Participant), we expect that the impact of the revised approach announced in January 2022 will be very limited. However, in all cases we strongly encourage you to speak with your CHAPS Direct Participant(s).

In particular, indirect participants may now start to receive and will be able to send enhanced data (i.e. richer and more structured data than can be carried in the existing MT message standard) in CHAPS payments from April 2023 rather than February 2023.

We will introduce new data requirements for sending certain CHAPS transactions – for example for a financial institution sending a wholesale payment to another financial institution, or sending a payment relating to a housing transaction – from summer 2024 rather than spring 2024. CHAPS will also require use of structured addresses and remittance data from November 2025.

RTGS Settlement and Reserves Account Holders

As previously advised, all Settlement Account and Reserves Account holders will be required to send funds to their account using pacs.009 (MT202 equivalent) CHAPS payments from Transition State 2; pacs.008 (MT103 equivalent) CHAPS payments will be rejected from then onwards. This requirement will now apply from April 2023.

For Settlement Account or Reserves Account Holders, the migration of account-related messages from MT to ISO (e.g. MT950 statement messages moving to camt.053 messages) will still take place with the introduction of the new RTGS core ledger in Transition State 3 in spring 2024.

Payment systems using the RTGS (Deferred) Net Settlement service

All payment messages supporting the (Deferred) Net Settlement service will switch from MT to ISO 20022 with the introduction of the new RTGS core ledger in Transition State 3 in spring 2024.

For avoidance of doubt, this change to the (Deferred) Net Settlement service does not impact settlement participants in those payment systems. However, as all settlement participants are either RTGS Settlement or Reserves Account Holders, they need to be aware of changes that affect them in the section above.

Vendors

Changes to the migration timetable will mainly affect CHAPS Direct Participants, as outlined above. In particular they will no longer require a like-for-like solution. However, those Direct Participants who also participate in the SWIFT cross-border payments network (FINplus) will need to be able to truncate enhanced CBPR+ messages into MT messages between November 2022 and April 2023. We will update the technical documentation and white-label communications supporting the framework by early February 2022.

In all cases, please engage all necessary clients and third parties.

End users (corporate and retail customers)

The change in migration approach will have low impact on end users of CHAPS payments. 

End users may start to receive enhanced data in the CHAPS payments they receive from April 2023 (previously February 2023).

Your payment service provider may start supporting and or asking for enhanced data (such as the purpose of the payment) with your CHAPS payment requests from April 2023 (previously February 2023).

Payment service providers will be required to send certain enhanced data with CHAPS payments from summer 2024 (for housing payments) and November 2025 (for all payments).

If end users have any queries, they should contact their payment service provider for further information.