Five International Banks Join UK Payments System CHAPS
UK electronic payments system CHAPS Clearing Company has received Letters of Intent (LOIs) from five major international banks to become direct participants.
CHAPS said that as set out in the Bank of England (BoE) Quarterly Bulletin, the five banks that have decided to become settlement banks are: BNY Mellon, ING Bank, Northern Trust, BNP Paribas and Société Générale. All five are currently indirect participants of CHAPS.
The decision will increase from 20 to 25 the number of banks that will be CHAPS direct participants by the end of 2015, an increase of 11 since the 2007-08 financial crisis. Last month, Sweden’s Handelsbanken joined CHAPS as a full direct participant independently of the BoE’s detiering initiative.
A CHAPS direct participant can send and receive irrevocable, guaranteed sterling payments with same day settlement finality. An LOI expresses a commitment to join the CHAPS scheme within an agreed time frame.
The CHAPS e-payment system guarantees same day settlement finality for high value payments and is at the heart of the UK’s payments and financial infrastructure.
Daily average settlement values are around £270bn, with an average payment value of £2m from its 20 direct participants which, in turn, serve several thousand other financial institutions (FIs) on an indirect basis as indirect participants).