Changes to Standard Conditions of Sale and Standard Commercial Property Conditions
Changes need to be made to the definition of a ‘clearing bank’ in the Standard Conditions of Sale and the Standard Commercial Property Conditions, now that the Bank of England have taken over direct delivery of the Clearing House Automated Payment System (CHAPS) service. See more information on how the system works on the Bank of England website.
The delivery of the UK’s high value payment system passed to the Bank of England on Monday 13 November 2017 as part of its overhaul of the country’s Real Time Gross Settlement (RTGS) platform. CHAPS is no longer operated by the privately-owned Chaps Clearing Company (Chaps Co) and the clearing banks ceased to be shareholders of the Chaps Co on Friday 10 November.
In Standard Conditions of Sale (5th Edition) condition 1.1.1 (b) and in Standard Commercial Property Conditions (2nd and 3rd Editions) condition 1.1.1 (c) the definition of a ‘clearing bank’ is no longer correct. We are proposing to change the definition to read:
‘Clearing bank’ means a bank which is a ‘direct Participant’ in the CHAPS system operated by the Bank of England.
Although an exact date cannot be provided as to when the necessary amendments will be made, we expect these to be completed in the near future. In the meantime, you should amend the special conditions to take account of these changes.