How To Join

Information and guidance for prospective members

The Cheque and Credit Clearing Company (C&CCC) is a non-profit making industry body funded by its members. It has managed the cheque clearing system in England and Wales since 1985 and in Scotland since 1996.

As well as clearing cheques, the system processes bankers’ drafts, building society cheques, postal orders, warrants, government payable orders and travellers’ cheques.

The C&CCC also manages the systems for the clearing of paper bank giro credits, euro cheques and US dollar cheques (the currency clearing for US dollar cheques drawn on GB banks).

The C&CCC provides a range of professional services to members including:

• operational management

• technical advice

• project management

• risk and compliance management, and

• secretariat and regulatory consultation.

In addition the C&CCC communicates with stakeholders through a programme of seminars, forums and newsletters, as well as via the C&CCC website at www.chequeandcredit.co.uk.

The clearing of cheques and credits and the clearing of euro cheques in Northern Ireland is managed by the Belfast Bankers’ Clearing Company.

About us and our members

Our members:

Our objectives are to:

• provide consumers, via our members, with the central payment system services for the exchange and settlement of cheques and credits. These services are underpinned by payments infrastructure including the exchange centres, the network for the transfer of electronic cheque data and an automated settlement system. It also includes a courier service for the return of unpaid cheques to the collecting bank;

• manage the operational processes of the central payment system services;

• determine the rules, standards and procedures required to maintain the integrity of the clearings, including the criteria for joining the clearings, and ensuring compliance with those rules; and

• engage with the full range of stakeholders, which includes consumers and businesses that use cheques, banks that offer cheque clearing services, cheque processors, cheque printers and other suppliers.

Our role is to:

• maintain the integrity of the clearings, which have been operating in a declining market for some time;

• respond proactively to changes in the business and regulatory environments;

• facilitate innovation in the clearing process in order to deliver improvement in the customer proposition and, of equal importance, improvements in industry efficiency; and

• maintain a trusted centre of excellence, experience and expertise in the cheque and credit clearings.

Exchange Centres

The C&CCC contracts with third-party service providers for the provision of a daily cheque and credit paper clearing exchange service for normal banking business days at secure premises. There are two exchange centres, one in central England and one in Scotland. The exchange centres are used by all three clearing systems: cheque clearing, credit clearing and euro clearing.

Data Transfer Network

The C&CCC’s central network infrastructure is called the Inter-Bank Data Exchange (IBDE) network. It allows the transfer of digital data on cheques and is provided by a telecoms supplier. It is a secure network that only members of the cheque clearing system have access to. Continuity of service is of paramount importance and, to ensure this, the network service provider monitors the performance of the network to each member’s end-point at intervals of a few minutes throughout the whole day. There is also a proactive fault-management service.

The C&CCC provides a centrally-managed, distributed payment processing system through third party suppliers. The company’s primary concern is to ensure that the central processing system is secure, reliable and robust, and there are several layers of contingency to ensure that exchange and settlement take place on every clearing day.

Central processing

Settlement System

Members input their bilateral pay and charge figures onto a secure browser-based application, which is hosted by a third-party supplier, using internet connectivity. Reconciliation of the figures, to eliminate any discrepancies between the members’ calculations, is automated. After all the figures are agreed the software calculates the multilateral net figures that must be paid to, or received from, each member bank. The Settlement Service Provider for the sterling clearing is the Bank of England. SWIFT messaging is used to transmit advice of the multilateral net settlement figures directly into the RTGS (Real Time Gross Settlement System) at the Bank of England for final settlement.

The Bank of England pre-notifies the settlement obligation to the treasury department of each member bank so that they can make sure sufficient funds are available for settlement purposes.

Unpaids Courier Service

The C&CCC provides, through a third-party supplier, a dedicated courier service for the collection and delivery of unpaid cheques to members of the C&CCC and to members of the Belfast Bankers’ Clearing Company. Returned items are placed in uniquely numbered plastic bags, called polylopes. Bar code scanning of the polylopes takes place at each of the collection and delivery points around the UK and at the central hub. This enables the banks to track the progress of the unpaid cheques like a recorded letter or parcel as they are couriered, via the central hub, to their intended destination the next day.

The implementation of this service in November 2007 has meant that banks across the UK can be sure that they get back unpaid cheques on a timely basis, enabling them to meet the 2-4-6 cheque clearing timescales. Previously banks relied on the delivery of unpaid cheques by post.

Central processing

• be an authorised credit institution, a public authority or publicly-guaranteed undertaking;

• hold a settlement account at the relevant Settlement Service Provider for the relevant currency and/or the agreement of the relevant Settlement Service Provider to allow access to the settlement arrangements operated by that Settlement Service Provider;

• carry out business and operate an office within the European Economic Area;

• provide a cheque and/or credit clearing service (for sterling cheques and/or sterling credits and/or euro cheques) to its customers through the clearing systems operated by the C&CCC;

• have the ability to comply on a continuous basis with the technical and operational requirements (rules, procedures and standards) of each clearing system in which it participates; such compliance includes any outsourcing arrangements;

• pay the membership charges;

• sign legal agreements in respect of membership and of the settlement arrangements;

• if required by the C&CCC, provide a legal opinion from external legal counsel confirming that each legal agreement will constitute, that new member’s legal, valid and binding obligation enforceable in accordance with its terms; and that the settlement arrangements are enforceable;

• have a minimum prime short-term credit rating and an investment grade long-term credit rating; and

• become a shareholder of the C&CCC.

Eligibility Direct Access to the Cheque and Credit Clearing System

To be eligible to become and remain a settlement member of the Cheque and Credit Clearing System, an entity must fulfil a number of criteria. It must:

Benefits of joining the C&CCC

• direct participation in the cheque and credit clearing system removes dependency on a sponsoring settlement bank as your clearing service provider;

• direct relationship with your cheque processor, if you choose to outsource;

• members have a seat at Board, which brings with it the opportunity to influence the strategic direction of the Company and the scheme;

• your own sort code range;

• access to industry-wide expertise through membership of the scheme’s committees;

• opportunity to deliver improvements in your customer proposition directly from innovations and processing efficiencies in the clearing process;

• help with media management: access to material relating to media enquiries for use in your press offices;

• access to our regulatory consultation monitoring service; and

• opportunities to engage directly with a full range of stakeholders.

How to apply for membership

The C&CCC and the clearing system is run on a cost basis and is funded by the members through the Annual Charges, which are made up of the cost of running the company (staff and premises) and the cost of providing the central payments system services.

There is an initial joining charge determined on a cost-recovery basis, taking into account the costs that the company and all other members expect to incur in admitting the member into the clearing system. Any specific legal fees incurred by the company in assessing the prospective member are paid by that member.

In addition, members bear their own cheque processing costs, provide resourcing for the scheme’s committees and provide committed liquidity and collateral under the legally-binding loss-sharing agreement with all the other members.

Membership costs

Any bank or building society wishing to become a member needs to apply in writing to the Managing Director. An organisation may apply to be admitted to participate in one or more of the cheque clearing system, the credit clearing system and the euro cheque clearing system. The application must set out sufficient detail for the C&CCC to satisfy itself of the prospective member’s compliance with, and its ability to continue to comply with, the eligibility criteria. There is an annual charge for being a member of the C&CCC and there is an initial joining charge.

• Some 350 banks, building societies and other payment service providers, such as authorised payment institutions, choose to have access to the GB cheque clearings through agency arrangements with one of the settlement members.

• To be eligible to be an agency with indirect access to the GB cheque clearings through one of the settlement members, an entity must be a payment service provider under the Payment Services Regulations.

• An entity wishing to become an ‘indirect clearer’ makes the necessary contractual arrangements directly with the member concerned. The C&CCC does not get involved with these commercial arrangements.

• An agency is required to comply on a continuous basis with the technical and operational requirements (rules, procedures and standards) of each clearing system in which it participates; its settlement member is responsible for ensuring that it does.

Eligibility Indirect Access to the Cheque and Credit Clearing System

• our publications and newsletters are distributed to a wide range of our stakeholders in addition to being published on our website. The latest cheque clearing and cheque usage data can be found on the Facts and Figures section of the website;

• our publications include advice about using cheques safely and top tips for avoiding cheque fraud, and what the 2-4-6 clearing timescales mean for consumers and businesses. Procedures and guidelines for banks and building societies offering cheque clearing services to customers are also located here and there are several publications that can be downloaded relating to the history of cheques and cheque clearing, and how the cheque clearing process works; and

• our quantitative market research into cheque usage amongst consumers and businesses is commissioned every year; the key findings can be found under the Resources section of our website.

Publications and Resources

As part of our role of being a trusted centre of excellence and experience in the cheque and credit clearings we maintain a wealth of cheque and cheque clearing information on our website at www.chequeandcredit.co.uk.

Governance and Regulation

The C&CCC is a private company limited by shares which are owned by the members of the cheque and credit clearing system. The company’s articles of association and a list of its directors can be found on our website in the Governance section under About Us and our Members.

The company and its clearing systems are the subject of regulatory influences. The company monitors the regulatory landscape to ensure that its own legal and regulatory framework evolves accordingly and responds to consultation papers issued by regulators and government agencies. A selection of the company’s responses can be found in the Governance section under About Us and our Members at www.chequeandcredit.co.uk.

Contact us

Further details on how to become a member and details about the various charges can be obtained by contacting the C&CCC at: info@chequeandcredit.co.uk.

2 Thomas More SquareLondon E1W 1YN

T 020 3217 8200www.chequeandcredit.co.uk