US Dollar RTGS System
The US dollar Real Time Gross Settlement (RTGS) system (also known as US dollar Clearing House Automated Transfer System (CHATS)) was launched in August 2000 with HSBC as its settlement institution (SI) and Hong Kong Interbank Clearing Limited (HKICL) as its system operator (SO). The US dollar RTGS system not only processes US dollar interbank payments on an RTGS basis, but also handles Payment vs Payment (PvP) transactions, Delivery vs Payment (DvP) for US dollar debt securities/bonds, US dollar bulk settlement of cheques and stock market-related payments.
Banks in Hong Kong are entitled to access the system and can apply for Direct Participants (DPs) through the USD SI or indirect participants by settling their payments through DPs. Participation of other financial institutions has to be approved by the HKMA and the USD SI on a case-by-case basis.
On liquidity provision, the USD SI provides collateralised intra-day repo facility to the DPs on a bilateral basis based on commercial terms. The provision of intra-day repo facility to each DP is subject to the signing of a Master Sale and Repurchase Agreement (“Repo Agreement”) between the USD SI and the DP concerned. Selected eligible securities with good credit ratings are accepted as collaterals for this service [Click here for details]
The settlement of transactions made through Hong Kong US dollar RTGS systems is final and irrevocable. This finality is protected from insolvency laws and other laws by the Payment Systems and Stored Value Facilities Ordinance (formerly known as the Clearing and Settlement Systems Ordinance).
Disclosure Framework for US Dollar RTGS System
The Committee on Payments and Market Infrastructures (CPMI) of the Bank for International Settlements and the International Organization of Securities Commissions (IOSCO) have jointly issued a disclosure framework and assessment methodology (http://www.bis.org/publ/cpss106.pdf) for their principles for financial market infrastructures (PFMIs), which is an international standards for financial market infrastructures (FMIs).
The disclosure framework (DF) is intended to promote consistent and comprehensive public disclosure by FMIs in line with the requirements of the PFMIs (http://www.bis.org/publ/cpss101a.pdf). The US dollar RTGS system is subject to the DF, and the disclosure report of US dollar RTGS system is completed according to the disclosure template outlined in the DF.