CHAPS is now open for longer
The settlement day for CHAPS, the UK’s high-value payment system, and CREST, the UK’s securities settlement system, has been extended by one hour and forty minutes. Users will therefore benefit from increased flexibility to initiate transactions that can settle later in the day – including high-value payments such as those required for property conveyancing payments, which are now open until 6pm.
CHAPS is the payment system used for many types of payment. It is used by solicitors in property sales and purchases on a daily basis. Those using the system will benefit from the extension of the settlement day, as they will be able to make high-value transactions later in the day. This will result in less stress and smoother completion days for both solicitors and the home movers, with a decrease in money not arriving on the chosen day.
The Bank of England, as operator of RTGS system, carried out a review of its operating hours in 2014. Its findings showed that extending the hours that CHAPS works would provide greater flexibility to businesses and financial institutions when making decisions on funding, investment and risk management, and a potentially longer window during which housing transactions can complete.
President of the Law Society Jonathan Smithers said:
“We welcome the decision to extend the CHAPS settlement day. We believe this is a useful and positive step that increases the likelihood of transactions being completed on the agreed date, and lessens the chances of home buyers not being able to move into their new property.”
The extended settlement day also applies to other users of RTGS system, including Euroclear UK & Ireland which operates CREST, the UK’s securities settlement system. Further details here.