Proposal to extend RT2 and CHAPS settlement hours (phase 1)

Foreword

The way payments are made is changing, both within the UK and globally, and the core infrastructure must evolve too. The introduction of RT2 in April 2025 provided a strong, open platform for innovation and growth, and we are now looking to leverage these foundations to help improve payments. Our development of a synchronisation interface for RT2 and our support for global initiatives to enhance cross-border payments are underpinned by the availability of settlement in central bank money, and we want it to be available when businesses and consumers need it most.

With this in mind, we designed RT2 with the capability to operate near 24x7. Feedback to our 2024 discussion paper on settlement hours was supportive of our ambition of moving to near 24x7 settlement around the turn of the decade, with at least one interim phase. Following the successful launch of RT2, we are now presenting our vision for a phase 1 extension. Building on feedback and discussions with industry and other central banks, we propose that CHAPS opens for settlement from 1.30am, with a view to consulting on future phases in 2026.

As I highlighted in my June 2025 remarks at the UK Finance Digital Innovation Summit, the transformation of our payments infrastructure is a shared endeavour. It requires collaboration across the ecosystem to ensure it meets the evolving needs of users and supports the UK’s growth ambitions. This consultation is not just about extending hours: it is about extending opportunity. By aligning more closely with global standards and fostering industry-wide co-operation, we aim to build an infrastructure that supports innovation, resilience and inclusivity.

The launch of RT2 was not the end destination, but the launchpad. This consultation marks the next phase in unlocking its full potential. As the payments landscape continues to evolve, we remain committed to adapting our services to meet the needs of tomorrow’s economy – whether through extended hours, new technologies or future innovations yet to emerge.

I would like to thank our stakeholders for your continued engagement with this initiative, which forms a key pillar of our future roadmap for RT2. We want our payment services to reflect the needs and aspirations of those who use them, while supporting the government in its mission to grow the UK economy.

We look forward to continuing to work closely with you throughout the phases of extending RT2 and CHAPS settlement hours, and as each phase transitions from proposal to decision and implementation. The next big step is understanding your feedback on this consultation.

Victoria Cleland
Chief Cashier and Executive Director, Payments

Responding to this consultation paper

This consultation paper seeks to gather feedback on our proposal for phase 1 of extending the settlement hours of RT2 (our renewed RTGS system, with the technical capability of operating near 24x7) and CHAPS (the UK’s high-value payment system). This involves consulting on whether and how we should open CHAPS for settlement from 1.30am on existing settlement days.

We are also seeking early views on extending the CHAPS contingency window and undertaking settlement in RT2 during certain bank holiday weekends. We will issue a separate consultation paper next year on these items, which will build on feedback to this paper, and will also consult on any further changes to settlement hours.

We would like to hear from a wide range of existing and future users of RT2 and CHAPS services, as well as other interested stakeholders. This includes banks and building societies (including in their capacity as CHAPS participants, and also as retail payment system participants), retail payment system operators, the wider payments industry including fintechs, other technology providers, end-users, trade associations, consumer groups, other central banks and public authorities.

Where relevant, we would encourage responses that represent the consolidated perspectives of individuals and teams with a strategic understanding of their organisation’s future priorities. This includes input from colleagues across operations and treasury management – from front to back office – as well as those involved in change management, budgeting and horizon scanning, to ensure a comprehensive view of how RT2 and CHAPS can support these priorities.

We would be grateful for responses to this consultation by 21 October 2025. Please respond to the consultation here. If you have any questions about this consultation, please email RTGSRoadmap@bankofengland.co.uk.

Please indicate in your response if you believe any of the proposals in this paper are likely to impact persons who share protected characteristics under the Equality Act 2010 and, if so, please explain which groups and what the impact on such groups might be.

Please see the Bank’s privacy notice and our RCEP privacy notice which set out how we handle personal data in the performance of our functions.

1: Introduction

RT2, our renewed RTGS service, went live in April 2025, providing a platform to introduce the features in our future roadmap for RT2. This includes reviewing the settlement hours for RT2 and CHAPS. Following our 2022 consultation and 2023 response regarding the future roadmap, and further industry engagement, we determined that the current 6am to 6pm window for settlement is not sufficient to meet the future needs of industry and end users. The world is increasingly moving towards 24x7 operations and RT2, as the core financial infrastructure in the UK, needs to respond.

A key driver for longer settlement hours is the platform they would provide for innovation in payments. For example, they could support a new synchronisation interface on RT2 and developments in retail and wholesale settlement, such as tokenisation, by providing access to central bank money settlement for a longer time period. Another driver is the G20 Roadmap for Enhancing Cross-Border Payments, which focuses on enhancing speed, cost, access and transparency globally. The G20 Roadmap has prompted recent initiatives to extend settlement hours across the world, including those of T2, operated by the European Central Bank (ECB), and Fedwire and the National Settlement Service, operated by the US Federal Reserve (Fed). In addition, longer settlement hours would reduce the build-up of settlement risk arising from the submission of payment instructions outside settlement hours.

We published a discussion paper in February 2024 outlining our initial analysis of the benefits and costs of extended hours. Our response in October 2024 outlined our preliminary vision, as endorsed by respondents, for the path ahead and confirmed that we:

• saw a strong case for a phase 1 extension involving opening CHAPS for settlement from 1.30am, to be implemented no earlier than 2027;
• wanted to work towards near 24x7 settlement for both RT2 and CHAPS by the end of the decade; and
• would work with industry to define the operating and support model for extended hours.

In this consultation paper on phase 1 of extended settlement hours, we confirm that vision and outline in greater detail how we propose to open CHAPS for settlement from 1.30am.

We are aiming for implementation of this early morning extension in the second half of 2027 (subject to consultation feedback and further work internally) as we consider this a stepping stone towards our ongoing vision of near 24x7 settlement around the turn of the decade. We are now seeking input from industry to help us refine these proposals.

We are also seeking early views to enable us to assess the benefits and use cases of potential changes to:

• expand the CHAPS contingency window (from its current hours of 6pm to 8pm, to 6pm to 10pm); and
• offer settlement in RT2 at points during certain bank holiday weekends.

As our next steps, we plan to publish:

• in early 2026: a policy statement on opening CHAPS for settlement from 1.30am;
• in early 2026: a phase 2 consultation paper, consulting on the evening contingency extension and bank holiday settlement and seeking views on end-state settlement hours; and
• in 2026: a policy statement covering the evening contingency extension and bank holiday settlement.

2: For consultation: opening CHAPS for settlement from 1.30am

Our proposal to open CHAPS for settlement from 1.30am on current business days is phase 1 of extending settlement hours. This option was viewed as having the strongest use cases by most respondents to our discussion paper. Feedback suggested that the important drivers for this view included alignment with other jurisdictions’ RTGS systems, including the euro area’s T2 and a number in Asia and the Middle East. This phase would also be easier to achieve operationally than an evening extension due to the timings of participants’ end-of-day processes.

We set out below our proposals for participation, participant support models (including business, technology and contingency), and Bank lending facilities between 1.30am and 6am. Following implementation, we would continue to monitor payment volumes and values, and engage with relevant participants, to anticipate any shifts in demand for technical support and/or liquidity facilities in this window.

CHAPS settlement would open from 1.30am for urgent and non-urgent settlement of any payment that is available for settlement. This would include both payments sent that day for same-day settlement and forward-dated payments (both subject to any set earliest settlement time). This proposal does not extend to other settlement activities or involve opening any other payment services for settlement between 1.30am and 6am. Payment systems operated by other payment system operators, such as Pay.UK (Bacs, Faster Payments and cheque imaging), Visa, Mastercard and Euroclear UK & International (CREST), would continue to operate on their existing timelines. However, we will continue to work with payment system operators to understand demand for settlement outside the current 6am to 6pm window.

Participation model: optional usage before 6am

We are proposing to introduce an optional early settlement window for CHAPS DPs from 1.30am to 6am.

• This change would allow CHAPS DPs to send payments for settlement from 1.30am, ahead of the current CHAPS opening of 6am. Participation in this early window is optional and there would be no changes to the timings of existing throughput rules or participant-specific start times.
• The following outlines how this optionality would work in practice:
  • Receiving payments: All CHAPS DPs would receive incoming payments from 1.30am, regardless of whether they are actively sending payments at that time. However, end-users may not receive CHAPS payments until CHAPS DPs open systems for onward processing.
  • Operational requirements: CHAPS DPs would continue to be required to be fully operational to send and receive payments from the relevant existing time (from 6am onwards), in line with their CHAPS categorisation. These obligations remain unchanged under the proposed extension and would not apply to the period between 1.30am to 6am.
  • Forward-dated payments: If a payment is submitted without a specific settlement time, these would settle immediately when CHAPS opens at 1.30am (assuming sufficient funds), even if the sending DP has not chosen to start submitting payments for same-day value early.
• This flexible proposal responds to feedback from those DPs that indicated they may not have an immediate business case for sending payments from 1.30am. At the same time, engagement with larger DPs suggests that most would take advantage of the early settlement window, which should ensure sufficient liquidity during this time.
• Ongoing monitoring of the participation model and engagement with relevant participants would assess any potential future adjustments required.
• We are also considering various methods by which we could support payment co-ordination, if necessary, in the future. These would aim to provide greater transparency around when individual DPs plan to start sending payments each day or potentially real-time indicators of when activity has commenced.

Types of payments anticipated within the early morning extension

During the period between 1.30am and existing start times, we anticipate that the types of payments made would be non-time critical – that is, not dependent on immediate settlement or tied to market deadlines.

• These may include forward-dated or preparatory liquidity movements, and cross-border payments that would currently only settle from 6am. While the window has been designed to support all payment types, the proposed support model in place during these hours reflects the expectation that the payments sent during this period will be non-time critical.
• Participation is optional, but the extended window provides an opportunity for participants to make earlier use of settlement services where it supports their operational or strategic objectives.

Support model: business and technology, including contingency

We propose that extended CHAPS settlement hours (1.30am to 6am) would operate with an alert and respond support model.

• The driver for this approach is the optional nature of participation in extended hours and the non-time critical nature of the payments that we anticipate being sent during this window. For example, CLS and CCPs’ current sterling pay-in timings do not require payment submission earlier than 6am.
• The approach aims to provide proportionate, cost-effective support while retaining flexibility to adjust the model based on usage patterns, scaling, and participant feedback over time. Ongoing monitoring of the support model and engagement with relevant participants would assess potential future demand for support in this window.
• We would not undertake active business monitoring of RT2 during the extended settlement period, although it would be subject to the routine technical monitoring that is already in place 24x7. Any critical internal incidents would automatically trigger alerts and initiate a response.

The following outlines the support arrangements for DPs during the proposed early settlement window, including how non-Bank related incidents and queries would be handled:

Bank facilities and services

To align with our proposed approach, there are no major changes planned to Bank facilities or services during the early morning extension. The following operational details are also relevant for participants to note:

• Intraday Liquidity (IDL) would be credited in RT2 at 1.30am, settling queued IDL credits from the previous night. DPs would not be able to amend IDL amounts before 8am.
• There would be no change to the euro liquidity bridge start time of 5.50am.
• The availability times would remain unchanged for on-demand Sterling Monetary Framework lending facilities, such as the Operational Standing Facility and Discount Window Facility. These facilities are typically used towards the end of the business day, so an earlier opening would not impact practical usage.

Further technical considerations

To support the proposed earlier start of CHAPS, we are reviewing technical processes such as maintenance scheduling and post-release proving to ensure continued operational stability and minimise disruption for participants.

• Given the 1.30am weekday start, we recognise the need to adjust maintenance release schedules to minimise disruption. This may involve shifting significant updates to weekends or earlier weekday windows. A review of the current release structure will help ensure continued operational stability. Our objective remains to minimise disruption to RT2 participants while maintaining system stability and operational resilience.
• We are also reviewing our arrangements for controlled starts after major changes. While we would not expect to open any earlier than 1.30am, in some circumstances we may, as we do now, ask DPs (including those who have chosen not to use these earlier settlement hours) to send a small number of low value payments early in the morning for operational proving, and give extra time for remediation of any issues.

Tariff and cost recovery

The Bank estimates that the impact on its operating costs will be limited. We will consider tariff implications and how best to recover costs from the industry for the early morning extension proposals once the proposal’s scope, timing, and priorities are agreed upon. We will engage with users in due course around our cost-recovery approach.

3: For discussion: a longer CHAPS contingency extension in the evening

This section is intended to stimulate early, high-level discussion on the potential extension of the end-of-day CHAPS contingency window, to help us shape future proposals on which we will consult in early 2026.

We propose to explore the case for extending the CHAPS contingency window from ‘up to 8pm’ to ‘up to 10pm’. This builds on feedback received on our 2024 discussion paper and response, where some respondents showed interest in a longer contingency window. We now want to understand if there is a strong industry need, whether firms could support the change and what operational challenges might arise if not.

Building on our proposal to extend the CHAPS opening time to 1.30am, we believe the next incremental step would be to implement a later contingency window by the end of 2028. This step forms part of a broader strategic aim to reduce the duration of when CHAPS is closed, enhancing system resilience and flexibility. We welcome views on whether a single direct move to an ‘up to 10pm’ contingency close by end-2028 would be most effective, or whether a stepped approach (with eg an interim extension to ‘up to 9pm’ by end-2027) might be more appropriate as a path to achieving ‘up to 10pm’ by end-2028.

As we explore the potential to enable later settlement hours, this should not be taken to imply an expectation that the current standard close time will change as we move towards a near 24x7 paradigm. In fact, there may be a rationale for maintaining 6pm as the fixed close. For example, several systems that operate 22 hours per day or longer choose to roll-over system dates in the early evening before re-opening for settlement shortly afterwards. This is something we will explore in more detail in our phase 2 consultation paper.

Use cases and benefits

While further analysis is needed, extending the contingency window could offer tangible benefits across different segments of the financial ecosystem, such as:

Operational, resourcing and technical considerations

We recognise that extending the CHAPS contingency window raises some operational challenges. Responses to our previous discussion paper indicated that many parts of the payment chain may be unable to operate beyond 8pm without significant change programmes.

Key concerns raised by respondents include:

• System constraints: respondents noted that a longer contingency window may disrupt overnight batch processing, especially in legacy systems.
• Maintenance windows: a longer contingency window may reduce time available, for both RT2 and DPs, for overnight and/or scheduled maintenance.
• Increase in staff costs: current contingency-shift coverage can be resource-intensive for some DPs, and the impact of a further extension on this is unclear.
• Third-party dependencies: contracts and SLAs with third-party providers may need to be reviewed to ensure they support the extended window and maintain service continuity.

We are keen to explore these further and better understand the implications.

Unlike the morning extension, the proposed later contingency extension (consistent with current practice) would require all CHAPS DPs to remain available until CHAPS closes. We also expect the extended contingency window of ‘up to 10pm’ to maintain the same Bank services currently offered within the contingency window today, ie IDL and SMF facilities.

4: For discussion: additional settlement days

We are also seeking initial views on the merits of introducing settlement windows over certain bank holiday weekends (ie those weekends that are extended by a bank or public holiday, such as the English August bank holiday weekend), to help us shape future proposals on which we will consult in early 2026. Implementation would be not before 2027. Historically, RTGS did open on certain sterling bank holidays, but this ceased with the closure of CHAPS Euro in 2008.

Many retail payment systems already operate 24x7 (eg Faster Payments), albeit with net settlement in RT2 taking place on the next day that it is open for settlement. A bank holiday weekend results in a longer period without settlement and thus has the potential to build up credit risk (for non-prefunded systems), limit access to liquidity and, in some cases, delay when an underlying customer is in receipt of funds (and so potentially limit new business opportunities).

Some retail payment system operators have identified potential benefits from discharging net settlement obligations earlier, particularly where those obligations build up over a longer period. This may be especially relevant for systems such as Visa, Mastercard, and possibly Faster Payments and LINK.

These benefits are most apparent where exposures accumulate over the weekend and are strongly directional, creating large structural imbalances between different sets of banks – for example, between those providing payment services for card issuers and those serving merchants.

We wish to explore two options with the payments industry:

• Net settlement only: RT2 would facilitate introducing a multilateral net settlement window during certain bank holiday weekends. In addition to reducing credit risk, this could potentially facilitate the faster receipt of funds for some merchants.
• A broader settlement window: RT2 would open for a short settlement window (around 2–3 hours) during certain bank holiday weekends, allowing both CHAPS settlement and net settlement within that window. There is no assumption that CREST settlement would operate on these days, nor payments associated with the Notes Circulation Scheme. This broader settlement window could support: CHAPS payments associated with net settlements, to support transfers to (and from) payment system participants who are not able to hold funds overnight in RT2, thereby extending the benefit of clearing the build-up of credit risk to all settlement participants; and CHAPS payments for other purposes.

Implementing these proposals would also help to develop the path for extending settlement outside of current settlement days, with a view to near 24x7 settlement by around the turn of the decade.

Our current assumption is to focus on the four bank holiday weekends that always include a Monday: Easter Monday, the two May bank holidays and the August bank holiday. This would not extend to Christmas Day, Boxing Day or New Year’s Day when they fall on a Monday (or any other day of the week).

For the four in-scope weekends, we are open to feedback on whether the additional settlement window would be more effective on the Sunday (to help reduce credit risk built up by that day), or on the Monday (which may be operationally more straightforward).

Opening RT2 for net settlement alone, or additionally with CHAPS, raises several practical issues and challenges that we need to explore with industry. These include:

• for net settlement, arrangements in the event of failure to settle;
• the range of operational services needed to support this, eg access to intraday liquidity (noting that we do not expect to be able to make SMF lending facilities available during this period);
• the participation model; and
• any technical, operational, resourcing and change-management challenges for participants.

5: Next steps

We invite written responses to this paper by 21 October 2025.

We will continue to engage with stakeholders throughout the consultation period to deepen our understanding of industry priorities, operational considerations and potential implementation challenges.

Following this consultation, we will assess the feedback received and consider refinements to our approach. This consultation represents phase 1 of our broader roadmap towards extended RT2 and CHAPS settlement hours. This will inform the development of a policy statement on the early morning extension, which we expect to publish in early 2026, with implementation targeted for the second half of 2027 (subject to consultation feedback and further internal analysis).

A phase 2 consultation is planned for early 2026. This will consult on proposals relating to the discussion points raised in this paper, ie a later CHAPS contingency window that closes at 10pm, and settlement during certain bank holiday weekends. It will also begin a broader discussion on the potential for near 24x7 settlement, including on weekends. This discussion will explore the opportunities, challenges and design considerations involved, building on feedback received to date. As noted in last year’s discussion paper response, when consulting on end-state settlement hours, we will provide an assessment of benefits, costs and risks to inform our final decision.

We expect to publish a policy statement arising from this phase 2 consultation in early 2026, alongside broader decisions on the future direction of RT2 and CHAPS settlement hours. If any extensions in addition to opening CHAPS at 1.30am are decided upon, implementation notifications issued after the final decision would include a lead time of 12 to 18 months, ensuring sufficient time for industry preparation and implementation.

Annex: Indicative summary of RT2 daily timetable following 1.30am opening

Separately from this consultation, we are engaging with users on proposals to move the RT2 start of value date from 12.15am to 8pm on the preceding evening. This deferred change from the RTGS Renewal Programme does not form part of the proposal being consulted on in this paper. Its implementation is, however, expected to be before the proposed 1.30am CHAPS opening. The following timings therefore assume that this change takes place prior to 1.30am opening.

CREST events are not included in this table, as these are not impacted by the 1.30am CHAPS opening proposal.