Functionality of the new RTGS service

In May 2017 we published a blueprint that set out our vision for the renewed RTGS service. This page sets out the current planned functionality of the new RTGS service that will deliver that vision.

Scope of services

The diagram below shows the overview of the scope of services for the renewed RTGS service. User A initiates a payment to User B, the boxes show the different areas the Programme is seeking to change for the renewed service. Click on the icons above to find out more about a particular scope area. 

hvps-diagram

1. HVPS risk management

1.1 End-to-end risk management

In November 2017 we became responsible for operating CHAPS, the High-Value Payment System (HVPS) scheme as well as the RTGS infrastructure. Until then CHAPS Co, a private sector entity owned by direct participants (high-street, international and custody banks), was responsible for managing the system’s governance and rulebook. Bringing CHAPS into the Bank of England means CHAPS can make use of the full set of tools and resources we have available to identify, mitigate, and respond to risks as they emerge. 

2. Service availability

2.1 Operating hours

We have no current plans to change the operating hours of RTGS, though that will be kept under review in light of user demand. The Bank would give at least one year’s notice of any future changes – and exact timings would be discussed with direct participants. We will not change the operating hours of RTGS before implementing a new ledger as part of the RTGS Renewal Programme, however the notice period could start in advance of that. The new service will have the technical capability to support 22 operating hours per day, 5 days a week plus short windows of operation available at the weekend for the net settlement of the retail systems. The design of the new service will not rule out a potential future extension to 24 operating hours per day, 7 days a week. We will continue to monitor industry demand for extensions to operating hours.

3. Operational resilience

3.1 Recovery and resilience

The renewed RTGS service will continue to operate across two locations and three settlement platforms. The Renewal Programme will deliver an automated contingency solution for critical payment submissions in the event of an outage of the primary messaging network.

3.2 Testing

We will introduce automated testing using simulators and minimise the risks involved in making common changes such as adding new members. Automation, wherever possible, will reduce the burden on users and increase efficiency. We will eliminate compulsory weekend testing for CHAPS on-boarding and minimise any other weekend testing where possible.

4. Network

4.1 Message network agnostic design

The renewed RTGS service will use SWIFT as the provider of messaging services. We are exploring the possibility of the renewed service to be Message Network Agnostic: capable of sending and receiving payment messages from multiple sources and interfacing with multiple messaging networks without compromising on levels of security or proof.

5. Liquidity and reserves

5.1 Sterling monetary framework

RTGS provides the reserves accounts under which the Bank’s monetary policy is implemented. The new system will enable flexible and rapid implementation of any potential future changes to the Bank’s monetary policy.

5.2 Global liquidity management

The new RTGS service will enable the existing auto collateralisation functionality in CREST to generate liquidity for other RTGS accounts when needed. There will be enhanced tools for the real-time monitoring and management of intraday liquidity. And any future Bank reviews of our collateral policy will consider potential expansion of the range of securities eligible to generate intraday liquidity. This expansion will include a potential extension of the current euro cash liquidity bridge to other currencies.

6. Settlement

6.1 Liquidity Savings Mechanism

The functionality and user interface of the Liquidity Savings Mechanism will be enhanced. Improved real-time data and analysis will be available to help inform liquidity management decisions. An enhanced offsetting algorithm will enable greater liquidity efficiency.

6.2 Settlement models

The new system will include updated features like automated notifications, increased information exchange capacity and the option to forward schedule movements between accounts in RTGS. It will have the capacity to support a diverse range of settlement models, including systems operating on innovative payment technologies, such as those built on Distributed Ledger Technology (DLT).

6.3 Synchronisation

We are exploring demand for ‘synchronisation’ functionality - the ability to synchronise cash movements in RTGS with the movement of cash or assets in other systems. We are exploring functionality where a trusted third party "Synchronisation Operator" could earmark and order the transfer of funds between participating institutions’ accounts in RTGS once required conditions have been met. Potential use cases include housing transactions, corporate actions and cross-border payments.

6.4 Access

The renewed RTGS service will be built to accommodate a substantial increase in the number of account holders. This will influence the design of the new service – for example the process to join RTGS will be simpler, including streamlining the testing required for CHAPS joiners. 

6.5 Non-bank PSPs

Non-bank payment system providers (PSPs) are now eligible to access RTGS settlement accounts (subject to meeting appropriate standards of resilience). The first non-bank PSPs opened settlement accounts in RTGS in 2018. Intra-day liquidity is not available to non-banks PSP users of RTGS. Download the Bank’s policy on access to RTGS for non-bank PSPs.

Since January 2018 CHAPS members have the option to connect to the service through a technical aggregator. The aggregator provides connectivity services but does not hold an account at the Bank of England. 

7. Reporting and monitoring

7.1 ISO 20022

We will adopt ISO 20022 messaging standards for High Value Payments System (HVPS) payments across the renewed RTGS service. Development of the message set for the UK HVPS will, as far as possible, be in line with the HVPS+ framework, UK retail payment schemes, and HVPS in other jurisdictions to ensure international harmonisation and domestic interoperability. The renewed RTGS will ensure ISO 20022 goes beyond the current message standard by introducing additional information fields and adding structure to existing fields. More information can be found on the ISO 20022 page.

7.2 Track and trace

The new RTGS service will support the SWIFT GPI (Global Payments Innovation) service, to allow track and trace of payments for CHAPS members. SWIFT GPI is able to support domestic and international payments. We will not be developing our own track and trace functionality.

7.3 Business Intelligence APIs

We will develop automated real-time tools for accessing RTGS transactional and liquidity data. There will also be some write access APIs, subject to the ability to secure it adequately. The Bank will continue to provide data via a user interface.

7.4 Transaction monitoring

The new service will be able to deliver data to users on all aspects of the payment messages ex-post and in a timely manner. This will allow users to enhance their own compliance monitoring. The data could be delivered to a potential future central utility tasked with monitoring. There will be no ex-ante transaction monitoring in the renewed RTGS.

This page was last updated 07 December 2018
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