Extending RTGS and CHAPS settlement hours – early morning extension

1: Executive summary

This policy statement (PS) sets out our decision to extend CHAPS settlement hours by moving the start of settlement from 06:00 to 01:30. Our intention is to put this early morning extension (EME) in place in September 2027, subject to final confirmation of the planned timelines with impacted CHAPS direct participants. This decision follows our July 2025 consultation paper (CP) on extending settlement hours, to which this statement serves as a formal response.

Participation in the EME will be optional, providing CHAPS direct participants (DPs) with the opportunity to send payments during the additional settlement period provided. The extension is designed to support earlier settlement, strengthen liquidity and operational resilience, and better align UK settlement with international markets.

While this PS primarily addresses the EME, work on the other extension phases – including bank holiday settlement and the wider roadmap towards near 24x7 settlement – will continue, with further updates provided as this work develops. Based on the feedback received, however, we will not progress the proposal for an extension to the evening contingency window further at this stage.

2: Overview

This PS outlines our decisions and next steps for the first stage of extending RTGS and CHAPS settlement hours, specifically opening CHAPS settlement earlier (ie EME). It explains the rationale for this change, identifies the institutions directly and indirectly affected, and summarises the consultation and review processes that have shaped this approach.

The statement aims to provide transparency on the EME implementation timeline, participation model, and operational arrangements – underpinning the Bank’s ambition of continued progress toward a more resilient, efficient and internationally connected payments landscape. Future publications will set out subsequent phases and progress towards our ambition of near 24x7 settlement. We will continue to take this work forward in 2026, working closely with stakeholders and undertaking further engagement and consultation at appropriate milestones.

Respondents to the July 2025 CP were also asked to indicate if any of the proposals in the paper were likely to impact persons who share protected characteristics under the Equality Act 2010. The Bank took account of these responses when making the decisions outlined in this PS.

Purpose

Extending settlement hours is a core component of the Future Roadmap for RTGS, which is designed to unlock the renewed system’s technical capabilities and deliver a more resilient, innovative and internationally connected payments infrastructure. The EME represents an important step in this package of improvements. By enabling earlier settlement, it strengthens liquidity management, enhances operational resilience and supports smoother cross‑border payments, facilitating progress against the G20 Roadmap. Together, these changes ensure RT2 and CHAPS continue to evolve in line with the UK’s long‑term vision for a modern, forward‑looking and competitive payments ecosystem.

Scope

This PS should be read by all participants in the UK payments ecosystem, including current and future CHAPS DPs, other RTGS account holders, financial market infrastructures (FMIs), indirect CHAPS participants and other stakeholders including trade associations.

The immediate impact of the EME is:

1. Sending payments: CHAPS DPs will have the option to send payments in the EME from 01:30. Those that choose to send during the EME may need to implement additional operational changes compared to those only receiving payments.
2. Receiving payments: all CHAPS DPs will receive payments on their account used for CHAPS settlement in RTGS from 01:30, regardless of whether they actively send payments during this period. Each CHAPS DP should assess any consequential impact on their operations.
3. Crediting funds: each CHAPS DP can decide whether to process received payments into its internal systems immediately including when to credit funds to their own and end-users’ accounts (customer or internal accounts) subject to applicable legislation such as the Payment Services Regulations.

This PS does not extend to any other payment system settlement between 01:30 and 06:00. Payment systems operated by other payment system operators, such as Pay.UK (Bacs, Faster Payments and cheque imaging), Visa, Mastercard, LINK, PEXA and Euroclear UK & International (CREST), would continue to operate on their existing timelines. We will, however, continue to work with payment system operators to understand demand for additional settlement.

Background

The extension of RTGS and CHAPS settlement hours forms a key part of the Future Roadmap for RT2, our renewed RTGS system, which unlocks the technical capability to operate settlement on a near 24x7 basis. Our work on extending settlement hours is underpinned by a structured process of strategic review and industry engagement. In 2024, we published a discussion paper and subsequent response, setting out our ambition to move towards near 24x7 settlement and inviting stakeholders to consider the implications for the UK payments landscape.

Building on this, a formal CP was issued in July 2025, seeking input from a broad spectrum of participants – including CHAPS DPs, current and future users of RTGS, FMIs and trade associations. This consultation aimed to gauge industry interest in earlier CHAPS settlement and gather initial views on other potential extensions, such as a later contingency window and bank holiday settlement. Together, these stages of engagement ensure that the extension of settlement hours is aligned with the long-term vision for RT2 and the evolving needs of the payments’ ecosystem.

Feedback from this process, together with ongoing strategic reviews, has informed our approach to extending settlement hours in a way that is proportionate, practical, and aligned with international practice.

This PS marks the conclusion of these reviews and consultation. It explains the rationale for a phased extension of settlement hours and outlines the next steps for implementation.

Summary of responses

Our consultation on extending RTGS and CHAPS settlement hours received responses from 42 organisations, including CHAPS DPs (representing 87% of CHAPS value in 2024), FMIs, payment system operators including card schemes, trade associations, non-bank payment service providers and other stakeholders. This broad and diverse engagement demonstrates strong sector-wide interest in the proposals.

3: Feedback to responses

3.1: Early morning extension

Key themes from the consultation

Stakeholder feedback on the EME was supportive, particularly among larger, internationally focused institutions. Of the responses received, 41% indicated they would use the EME. These respondents were predominantly CHAPS DPs that accounted for around 84% of overall CHAPS transaction value in 2024. The remaining 59%, mainly domestic-focused institutions, did not see an immediate need to use the extended hours themselves, but nevertheless supported the proposal, valuing the flexibility of an optional participation model.

83% of respondents agreed with the proposed implementation date in the second half of 2027. Most respondents requested 12–18 months notice to allow for technical changes, staff training, and operational adjustments.

Feedback emphasised the need for technical changes to be proportionate and practical, ensuring implementation requirements remain reasonable and aligned with the scale of benefits. Respondents also highlighted the importance of transparency in sending activity and clear guidance on incident management. Challenges around staffing and system readiness were considered manageable, provided there is adequate lead time and clear expectations.

The proposed alert and respond support model was welcomed for its flexibility and cost-effectiveness, with a consensus that it should be kept under review as usage evolves. Overall, responses reflected strong alignment with our extending settlement hours ambition and roadmap with a shared commitment to modernising settlement arrangements.

Our response and next steps

We will proceed with implementing the EME, opening CHAPS settlement at 01:30 under an optional participation model. This approach reflects strong industry support for flexibility and ensures that institutions can adopt extended hours in line with their operational needs. The proportionality and practicality of the EME alert and respond support model will be kept under review as usage evolves.

To support smooth implementation and reinforce market confidence and operational resilience, we will share further information with CHAPS DPs in due course. This will provide greater clarity on:

• Incident management: how settlement‑impacting incidents will be handled during the EME window, including escalation routes, expectations for CHAPS DP communication, and boundaries between critical and non‑critical issues.
• Regulatory reporting: how existing obligations to report incidents to regulators (Bank, Prudential Regulation Authority, Financial Conduct Authority) apply during the extended window.
• Roles and responsibilities: the respective responsibilities of the Bank, as the operator of RTGS/CHAPS, and CHAPS DPs during the EME window. This includes expectations for operational readiness and a proportionate approach to co-ordination of EME activity.

We will also continue to discuss practical and proportionate options with CHAPS DPs for sharing visibility of EME activity.

These actions reflect our commitment to a collaborative and transparent process, while maintaining robust operational standards and ensuring the EME delivers benefits for all participants.

The go-live date is targeted for September 2027, based on responses to provide an appropriate amount of time for planning, technical adjustments, and staff engagement. Alongside this, we will continue to work closely with stakeholders to ensure readiness and resilience throughout implementation.

3.2: A later CHAPS contingency window

Key themes from the discussion

The discussion on extending the CHAPS contingency window was designed to test industry appetite and gather early views. Feedback indicated a mixed level of demand, with fewer clear use‑cases identified particularly compared with other proposals: 38% of respondents said they would benefit from a later contingency window, while 28% said they would not, and 35% were either unsure or felt it was not applicable. Some respondents also noted potential benefits, particularly additional time for incident recovery and improvements to operational resilience.

Respondents highlighted the significant operational and technical changes – such as system upgrades, modifications to end-of-day processes and staffing adjustments – and many questioned whether these costs would be proportionate to the benefits. Most respondents indicated they would need at least 12 months or more to implement such changes, reflecting the complexity and investment involved. Feedback also suggested a phased approach would be preferable: initially extending CHAPS contingency hours to 21:00, with the option to move later (eg to 22:00) if demand warranted.

A recurring theme was that investment might be better directed towards a longer standard operating day to progress towards near 24x7 settlement, which respondents viewed as delivering greater strategic value. This feedback provides a clear steer for prioritising initiatives that offer broader systemic benefits.

Our response and next steps

Considering these views, we will not pursue changes to the CHAPS contingency window at this first stage of extension. Instead, we will incorporate this topic into the longer-term roadmap for extended hours and near 24x7 settlement. We recognise the importance of resilience and will continue to monitor market developments and operational needs to determine whether contingency arrangements should evolve over time.

3.3: Additional settlement on certain bank holiday weekends

Key themes from the discussion

Stakeholder feedback on enabling settlement during certain bank holiday weekends (Easter Monday, the two May bank holidays and the August bank holiday) was mixed. Support for bank holiday settlement was split: 29% of respondents said they would use it, 31% would not, 31% were unsure and 9% did not provide an answer. Many internationally active institutions recognised benefits for liquidity management, cross-border payments, and risk reduction, particularly through better alignment with international markets and smoother funding flows. There was also interest in longer day settlement rather than shorter windows.

A consistent theme was that enabling net settlement for retail payment systems alone, without CHAPS being open, would not be as effective due to system dependencies and constraints on liquidity management. Concerning preferred settlement days, 65% of respondents favoured Monday over Sunday, citing operational simplicity, system maintenance, and alignment with international practice. Monday aligns with existing system configurations and global RTGS schedules, making it easier to implement. Sunday was less popular, mainly due to maintenance routines and greater staffing challenges, though a minority saw benefits for liquidity and risk reduction.

Support was strongest among international facing institutions and card schemes who could identify tangible benefits, while domestic and retail-focused firms highlighted operational, technical, and staffing challenges, as well as dependencies on infrastructures that do not operate on bank holidays.

Our response and next steps

In light of mixed feedback on additional settlement on certain bank holiday weekends – particularly the strong preference for a combined CHAPS and net settlement approach, and operational concerns from domestic and smaller firms – we will continue to explore bank holiday settlement with a revised and narrowed focus. The focus will now centre on enabling both CHAPS and net settlement on certain bank holiday Mondays.

We will also consider the participation model and explore a longer day operating window than previously proposed, to ensure any changes deliver meaningful benefits while minimising complexity. Next steps will include further engagement with stakeholders to assess the impacts of this refined option.

4: Final policy decision for the CHAPS morning extension

New extended settlement hours

This section provides a high-level summary of our decision to introduce the EME to CHAPS settlement hours as well as expected impacts. CHAPS will open at 01:30, moving from the current start time of 06:00. This earlier opening is designed to support improved liquidity management, enable earlier settlement of high-value payments and align UK operations more closely with global markets.

Further details and implementation documents will be shared as we move closer to go-live, ensuring all stakeholders have the information needed for operational readiness.

To support CHAPS DPs during the extended hours, we will introduce a proportionate support model and a range of facilities tailored to expected activity levels. Initial information on incident management and operational arrangements is provided in this PS, with more comprehensive guidance to follow as implementation progresses.

EME participation model and payment processing requirements

• Making payments: participation for CHAPS DPs during the EME is optional for sending. CHAPS DPs should first consider whether they wish to send payments before 06:00. Those that choose to send during the EME may need to implement additional operational changes compared to those only receiving payments.
  • Forward-dated payments: forward-dated payments submitted without a specific settlement time will settle immediately once CHAPS opens at 01:30 (assuming sufficient funds), even if the sending CHAPS DP has not chosen to begin submitting payments for same‑day value at that time. This also applies to forward-dated defunding payments from reserves and settlement account holders, which are sent as CHAPS payments from RTGS.
• Receiving payments: all CHAPS DPs will receive payments onto their CHAPS settlement account in RTGS from 01:30, regardless of whether they actively send payments during this period.
• Crediting funds: each CHAPS DP can decide whether to process received payments into its internal systems immediately and when to credit funds to their own and end-users’ accounts (customer or internal accounts) subject to applicable legislation such as the Payment Services Regulations.
• CHAPS Reference Manual (CRM): there will be no changes to existing throughput rules.
  • Certain categories of CHAPS DPs can continue to choose to start from 07:00 or 08:00.
  • Throughput Rules will continue to apply from the current start of settlement hours at 06:00. We do not expect to monitor or assess throughput performance in the EME window ie before 06:00.
  • The Throughput Targets at 12:00, 15:00 and 17:00 will remain unchanged.

As with all CRM provisions, we will keep the throughput rules under review as usage of the EME evolves. Any future updates will be communicated through our usual change management process.

Likely usage of the early morning extension by DPs

The EME will provide flexibility for CHAPS DPs, enabling earlier access to settlement. Whether to send payments in the early morning extension is entirely optional and there are no restrictions on the types of payments that can be sent.

• The most critical payments – which include CLS pay-ins and payments for central counterparties initial and variation margin calls – are not expected to move into the EME. We understand that these FMIs do not plan to move their payment deadlines earlier at this stage and therefore these critical payments are unlikely to be sent during the EME.
• CHAPS DPs will use their discretion based on their own and their customers’ needs whether to send payments in the early morning extension and if so, whether this might be limited, for example, by channel, customer segment, purpose etc.
• Over time, other CHAPS DPs that do not initially send payments in the EME may choose to begin sending payments during the EME. Reasonable notice should be provided so that intentions can be communicated to the wider CHAPS DP population.
• From an RTGS/CHAPS perspective, we will not put in place any restrictions on what payments can be sent during the EME.

EME support model and incident processes

We will operate an ‘alert and respond’ support model during the EME, designed to be proportionate to expected usage and initial payment activity and volumes. In summary:

For incidents impacting RTGS and/or CHAPS services between 01:30–06:00:

• Critical, settlement-impacting incidents affecting RTGS or CHAPS services will continue to be responded to outside core settlement hours. Our 24x7 monitoring system generates alerts, which are assessed to determine severity and, where necessary, declare a critical incident. Such incidents trigger the appropriate escalation route ie senior operational staff are alerted and will respond accordingly.
• Incidents that are non‑critical, idiosyncratic, or relate to non‑core systems arising during the EME will be addressed during the core settlement hours. Further guidance on incident management and communication protocols will be provided as we progress towards implementation.

For any incidents impacting CHAPS DPs between 01:30–06:00:

• Similarly for the current settlement window, active CHAPS DPs experiencing incidents are expected to declare when payment flows are disrupted or systems are unavailable for an extended period. We aim to review timings around CHAPS DP incident reporting.
• To further support CHAPS DPs, we are exploring solutions and tools to improve visibility and communication of CHAPS DP-specific incidents.
• We will also refine our guidance around CHAPS DP incidents to include the EME window.

Bank facilities and services

As outlined in our July 2025 CP, the only operational changes relevant for CHAPS DPs during the early morning extension are:

• Intraday liquidity (IDL) will be credited in RT2 at 01:30, settling queued IDL credits from the previous night. As now, CHAPS DPs will not be able to amend IDL amounts before 08:00.
• There will be no change to the euro liquidity bridge start time of 05:50.
• Availability times will remain unchanged for on-demand Sterling Monetary Framework lending facilities, such as the Operational Standing Facility and Discount Window Facility. These facilities are not typically used at the start of the business day, so an earlier opening would not impact practical usage.
• The Notes Circulation Scheme settlement will move forward from 05:15 to 01:15 – ahead of the updated EME CHAPS start of 01:30. Bond payments are currently tied to the opening of the Notes settlement window, therefore moving the scheduled opening will reduce the risk of relevant CHAPS DPs not having funds available to meet bond withdrawal obligations.

Further operational details will be shared as we progress towards implementation.

Further technical considerations

To support the earlier start of CHAPS, we are reviewing technical processes, including maintenance scheduling and post-release testing, to ensure operational stability and minimise disruption. Arrangements for earlier starts after major changes are also being considered. Further details will be shared as we progress towards implementation.

Implementation date

The plan is for the EME to go live in September 2027. We will share an implementation plan that will allow CHAPS DPs sufficient time for system changes, staff training, and operational readiness. Transitional arrangements will be proportionate to a CHAPS DP’s expected usage of the EME. This includes providing clear communication of CHAPS DP expectations, incident‑management processes and technical requirements well in advance.

5: Next steps

We will co-ordinate a readiness workstream to ensure that all stakeholders are ready for the change to open CHAPS settlement at 01:30 in line with our planned go-live date in September 2027. This work will factor in the optional participation model, with separate information streams for groups of CHAPS DPs dependent on their expected participation in the EME. Following the publication of this PS, we will engage directly with CHAPS DPs to detail how to join each information stream for further details about the implementation process and transitional arrangements based on usage.

We will further explore the use case and impacts of additional bank holiday Monday settlement, with further analysis and engagement will be carried out both internally and externally.

In Spring 2026, we aim to publish a CP that will explore further the potential for the near 24x7 extension of RTGS/CHAPS settlement hours, discussing the opportunities, challenges and use cases of near 24x7 settlement and the steps needed to achieve it.