Settlement Bank is one of nine Exchange participant classes.
The Exchange refers to this class as GX-SB. It sits in the Clearing & Settlement group and carries the obligations set out below in addition to the requirements common to every participant.
Admission test: Central bank access in each currency it settles, an intraday liquidity line committed to the Exchange, and participation in the annual settlement failure exercise.
Exchange Designation
Class Group
Public Register Entry
Rule Change Notice
Obligations of the Class
What it does
Settlement Banks form the panel across which the Exchange moves cash. When a cleared obligation is settled, the debit and credit are made across a panel bank's books and the obligation is extinguished.
Currency coverage
Each panel bank names the currencies it will settle and the daily window in which it guarantees convertibility. The Exchange will not open a corridor without at least two panel banks covering its settlement currency.
Intraday commitment
Panel banks commit an intraday liquidity line to the clearing house so that a late incoming payment does not stall the settlement cycle for the whole corridor.
Independence from clearing
A Settlement Bank does not take positions on the Exchange. Where a bank also wishes to clear, the two activities are conducted through separate legal entities with separate reporting lines.
Standing
Published
Admission, restriction, suspension and withdrawal for this class are published on the participant register with the effective date and the rulebook section relied on.
Reviewed annually
Standing is reviewed every year against the admission test, and at any time on a material change in the participant's circumstances.
Appealable
Adverse decisions may be referred to the Exchange review panel, which sits independently of the desk that made the original determination.
