The Bank of England (BoE) has published its official response to industry feedback on its review of access to Real-Time Gross Settlement (RTGS) accounts, marking a potential shift in the UK’s post-trade settlement infrastructure. The response, released on 8 April, follows a discussion paper aimed at exploring how access to RTGS could be expanded or improved, particularly for non-bank payment service providers (NBPSPs) and foreign institutions.
The BoE’s consultation centred on four key areas: improving the process for NBPSPs seeking RTGS access, understanding the interest from foreign banks in using RTGS for payment system settlement, clarifying conditions for financial market infrastructures, and reviewing the Clearing House Automated Payment System (CHAPS) value threshold for direct participation.
In its response, the BoE acknowledged a broad appetite for greater direct access to RTGS and outlined a number of resulting actions. Notably, it has introduced updated RTGS rules, including clearer eligibility criteria for account access and settlement services.
Regulatory reform
A major theme in the response is the BoE’s interest in enabling broader participation by NBPSPs. It is currently assessing whether it could offer settlement accounts with safeguarding features, an important consideration given that these accounts are typically unremunerated. The Bank is also working with HM Treasury and the Financial Conduct Authority (FCA) to address regulatory hurdles that may be limiting NBPSP participation in UK payment systems.
The BoE signalled further engagement with market participants around two critical issues: mitigating concentration risk in CHAPS, and assessing whether the current value threshold for direct RTGS access remains fit for purpose. These discussions could influence the structure and resilience of the UK’s wholesale payment system going forward.
