text: credititscreditparty. However. understandard Frenchdoctrine. thecredit becomes irrevocable whenthereceiving bankentersacredittothecredit party's account (andnottohis"pseudo-account"). evenifthebanknever receives valueforthefundstransfer.• • •A/CN.91266/Add.1 English Page31 2.United Kin&dom 13.TheCI~aring HouseAutomated Payment System (CHAPS)isahigh-value same-day credittransfer network linking thetwelvesettlement banks. including theBankofEngland. Itisanationwide supplement to.and eventually ar~placement of,theTownClearing, whichisthespecialized paper-based high-value fundstransfer network limited totheCityofLondon. Arecentdecision hasbeenmadethatsettlement membership inCHAPSandthe TownClearing, aswellasibtheotherclearing arrangements, shouldbeopened tobankswhichmeetthefollowing fivecriteria: readiness andability tocomplywiththetechnical operational requirements oftheclearings andagreement tobe bound by therules oftheindividual clearing company concerned. ability toestablish settlement accountfacilities attheBankof England; willingness tomeetafairshareofoperating costs; willingness topay afairentryprice;and ability tomeetaminimum volumecriterion intheoperational clearings concerned. A number ofbanks,including theLondonoperations offoreign banks.are seeking settlement membership inCHAPSandtheTownClearing. Non-settlement bankscanhavefundstransfer instructions sentthrough CHAPSonlyby maintaining acorrespondent bankrelationship withasettlement bank. 14.Banksreceiving credittransfer instructions through CHAPSarerequired to makesame-day availability ofthefundstothecreditparty. Thisruleis intended toincrease theusefulness ofCHAPStothebusiness andfinancial communities. Inturn,thesending settlement bankisobligated toreimburse thereceiving settlement bankfortheamountofthefundstransferred, evenif thesending bankisnotreimbursed byitsinstructing party. Afundstransfer through CHAPSisunconditional andirrevocable. 15.Theproperfunctioning ofCHAPS,therefore, depends uponconfidence inthe solvency ofthesending bank.Thisconfidence hasbeensecured inthepastby restricting thenumberofparticipating banksinCHAPSand byrelying onthe BankofEngland toputthrough thefinalinter-bank CHAPSsettlement transactions. Atpresent settlement ismadeattheendoftheday on a net-net basisbytransferring balances ofthesettlement banksintheir accounts withtheBankofEngland. tnthenewarrangement, "theprudential criteria tobe metforsettlement membership inanyclearing [including CHAPS] shouldbe subsumed intoaprecondition thatmembers maintain anaccount with theBankofEngland whichcould,withtheBank'sexpress agreement. beused forthepurposes ofsettlement inthatclearing." 1/ 1/Payment Clearing Systems: ReviewofOrganization, Membership and Control (Members oftheBankers Clearing House.London, 1984).Appendix 1, p.20.A/CN.91266/Add.l English Page32 3.Unitedstates 16.Fout'large-value on-line credittt'ansfernetworks arecut'rently operating intheunitedStates. Theydivideconveniently intotwogt'oups. Thefit'st gt'oupiscomposed ofFedwit'e, operated bytheFedet'al Reset'veSystem. Fedwire permits all14,000 banksinthe.UnHedStales andlheotherdeposit taking institutions whichmaintain account balances withtheirregional Federal Reserve Banktotransfer thosebalanct:!s toolherbanksordt:!posit taking inst.itutlons. Ineffect, Fedwirt:! functions as acorrespondent banking service totheentirebanking system. • 17.Thesecondgroupofon-line credittransfer networks i.scomposed ofthe threeprivate networks. CHIPSisowned and operated bytheNewYorkClearing HouseAssociation. Thereareoveronehundred participating banksauthorized tosubmitcredittransfer instructions forpaymenl tootherparticipating banks,ofwhichanumberareNewYorkbranches offoreign banks. TheClearing HouseElectronic Settlement System (CHESS) isowned and operated bythe Chicago Clearing HouseAssociation. Sixlargebanksparticipat.e. CashWire is a partofBank\'l1ire, anation-widetelecommunication.s network owned by a
analysis: The text appears to be discussing payment systems, credit transfers, and clearing arrangements between banks, which suggests that it falls under the realm of finance and economics. The text mentions specific systems such as CHAPS, Fedwire, and CHESS, which are all related to financial transactions and settlements. Additionally, the text discusses the criteria for settlement membership and the importance of confidence in the solvency of participating banks, further supporting the conclusion that it belongs to the category of finance and economics.