The Bank of England has announced its decision to extend the Clearing House Automated Payment System (CHAPS) settlement day from summer 2016. CHAPS is the payment system used for many types of payment, but from the Law Society’s perspective it is mainly used by solicitors in property transactions.
The Bank of England has proposed that the time for customer payments and Interbank payments will be extended to align more closely with the typical business day.
By extending the settlement day in this way, those using the service will be able to make high-value transactions later in the day. For solicitors and home movers this means that the likelihood of money not arriving and clients being left on the doorstep is decreased.
The Bank of England makes clear in its announcement that banks should communicate the extension of CHAPS hours to their customers, and set later cut-off points accordingly.
We expect an announcement from the Bank of England later this summer to confirm the exact date of the extension.
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.’