Bank of England consults on longer RTGS and CHAPS operating hours

Introduction

The Bank of England (the “Bank”) published a consultation paper (the “CP”) on 29 July 2025 seeking views on its proposal to extend Real-Time Gross Settlement (“RTGS”) and CHAPS operating hours. Specifically, the CP focuses on the Bank’s proposal to open CHAPS for settlement at 01:30 UK time. The CP also seeks early views from market participants on expanding the CHAPS contingency window and on offering RT2 settlement during certain bank holiday weekends.

The backdrop to the CP is the Bank’s 2024 consultation paper outlining the Bank’s initial analysis of the benefits and costs of extended hours, and related October 2024 response which confirmed the case for the extension. The CP also follows the Bank’s successful implementation of RTS 2 in April 2025, which features the technical capability to operate on a near 24/7 basis.

The proposal to extend RT2 and CHAPS operating hours forms phase 1 of the Bank’s multi-phased roadmap for the modernisation of the UK’s payment infrastructure (“Phase 1”). The Bank’s long-term vision is to move towards near-continuous settlement by the end of this decade.

The timeline set out below provides a snapshot of the background to the CP, and the Bank’s next steps that are intended ultimately to result in near real time CHAPS and RT2 settlement by the end of the current decade.

For consultation: opening CHAPS for settlement from 01:30 UK time

The Bank proposes that, under Phase 1, CHAPS settlement hours would be extended on current business days such that CHAPS would open from 01:30 UK time, rather than the existing 06:00 opening time. This proposal was strongly supported by feedback to the 2024 consultation paper. The Bank has consulted on this proposal first as it is understood to be simpler to achieve operationally compared to an extension of evening opening hours. If the proposal is adopted, the Bank intends that the change to CHAPS operating hours would take effect during the second half of 2027.

This change is intended to:

• Align CHAPS operating hours more closely with those of other global financial markets, particularly with the Euro area’s T2, the Middle East and a number of Asia-Pacific time zones.
• Support cross-border payments by increasing overlap with other jurisdictions’ operating hours.
• Enhance operational resilience and flexibility for market participants.
• Provide more flexibility in relation to forward-dated or preparatory liquidity movements.

The extension would, if adopted, see CHAPS open at 01:30 on existing businesses days for both urgent and non-urgent settlement of any payment is available for settlement. This would include both payments sent that day for same-day settlement, and forward-dated payments. The proposal does not extend to any other settlement activities, or involve opening any other payment services for settlement between 01:30 and 06:00.

Importantly, participation in this early window would be optional. However, all CHAPS direct participants would receive incoming payments from 01:30 regardless of whether they are actively sending payments at that time. This means that end-users may not receive CHAPS payments until CHAPS direct participants open their systems for onward processing.

In practical terms, the extension would require CHAPS direct participants and relevant infrastructure providers to make changes to their operational models, personnel resourcing and technology to accommodate earlier settlement activity. The Bank acknowledges that this may involve costs and operational challenges, and is seeking feedback on the feasibility and implications of the proposed extension.

The Bank proposes to operate an “alert and respond” support model during the extension period. In summary this means that the Bank will not provide business and technology support for direct participants until 05:45, and the Bank’s contingency support will not apply until 05:45 (for early morning operational support for direct participants) and 05:15 (for support relating to intra-day liquidity and RT2 movements linked to banknote operations). This limited support model reflects the optional nature of participation in this early settlement window, as well as reflecting the Bank’s expectation that this window is likely to be used largely for non-time critical payments. The model is intended to represent a proportionate, cost-effective support approach that can be scaled up subject to the level and type of CHAPS usage during the early window.

However, the Bank notes that it may be necessary to adjust maintenance release schedules to minimise disruption. Significant technical updates may need to be undertaken at weekends, given the 01:30 proposed start on weekdays. The Bank is also considering its approach to controlled starts after major changes, but has not provided any detail on this point in the CP.

Amongst other things, the Bank is seeing feedback on anticipated use cases of the early settlement window, and on participants’ views of the proposed support model.

For discussion: Views sought on other matters

In addition to the formal consultation on opening CHAPS for settlement from 01:30 UK time, the CP also invites early views on a number of related topics. Feedback may inform future phases of the Bank’s programme. These additional topics include the following:

• Extension of the CHAPS contingency window by two hours, from its current “up to 20:00” deadline, to “up to 22:00”. This would, in the Bank’s view, represent a logical next incremental step towards full 24/7 operation. The Bank intends that this extension, if adopted, would be implemented by the end of 2028.
• Introducing settlement windows over certain bank holiday weekends. This proposal is intended to help reduce credit risk for non-prefunded systems, which can otherwise build up over bank holiday weekends. As part of this proposal, the Bank intends to explore the following alternative measures:
  • introduction of a multilateral net settlement window during certain bank holiday weekends; and
  • oopening RT2 for a short settlement window (of around two to three hours) during certain bank holiday weekends, allowing both CHAPS and net settlements during this window.
• Changes to the CHAPS value date convention, which could allow for same-day value across a broader time window.

Key milestones

The deadline for responses to the Phase 1 CP is 30 September 2025.

The Bank’s target implementation date for the Phase 1 CHAPS extension is, subject to consultation feedback, no earlier than H2 2017.

The Bank also anticipates publishing a Phase 2 consultation paper during early 2026.

Authored by Keti Tano.