Faster Payments Service and Make whole clause: Difference between pages

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(FPS).  
''Securities''.


UK process for electronic payments, typically made via the internet or phone, to be processed in hours rather than days.  
A strong form of protection for lenders/investors in securities, designed to mitigate the adverse effects of call risk for investors.


It allows credit transfers and standing orders to be paid in near real time.  There is a maximum transaction amount.  It is operated by VocaLink 24 hours a day, 7 days a week.
Under a make whole clause the borrower/issuer has to value the cash flows beyond the date of the early call/redemption at the government bond yield.




== See also ==
This potentially makes it prohibitively expensive for the issuer to take an early redemption.
* [[BACS]]
 
* [[Clearing House Automated Payment System]]
The consequence of a make whole clause for the investor is that they can re-invest the redemption monies in government stock, thus preserving their originally expected cash inflows at lower risk.
* [[CPA]]
 
* [[Electronic commerce]]
 
* [[Faster Payments Scheme]]
Make whole clauses are similar in their effect to Spens clauses.
* [[IMPS]]
 
* [[Payments and payment systems]]
Sometimes known as a make whole ''provision''.
* [[PSP]]
* [[Immediate payments and the impact on corporate treasurers]]




===Other links===
== See also ==
[http://www.treasurers.org/node/2932 UK Faster Payments Service, ACT Briefing note, 2008]
* [[Call risk]]
* [[Clause]]
* [[Security]]
* [[Spens clause]]


[[Category:Cash_management]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:Corporate_financial_management]]

Latest revision as of 15:40, 10 December 2021

Securities.

A strong form of protection for lenders/investors in securities, designed to mitigate the adverse effects of call risk for investors.

Under a make whole clause the borrower/issuer has to value the cash flows beyond the date of the early call/redemption at the government bond yield.


This potentially makes it prohibitively expensive for the issuer to take an early redemption.

The consequence of a make whole clause for the investor is that they can re-invest the redemption monies in government stock, thus preserving their originally expected cash inflows at lower risk.


Make whole clauses are similar in their effect to Spens clauses.

Sometimes known as a make whole provision.


See also