Bank of England mandates Purpose Codes for all CHAPS payments from November 2027 while deferring requirements for channels outside direct participant control

The Bank of England has published its consultation response and policy statement confirming how it will expand mandatory ISO 20022 enhanced data requirements in CHAPS from November 2027. The core decision is to require Purpose Codes for all CHAPS payments, but only for payment initiation channels within CHAPS direct participants’ control, while not extending mandatory enhanced data requirements to channels outside direct participant control in 2027. From May 2025, Purpose Codes have been mandatory for all payments between financial institutions and for property transactions, and Legal Entity Identifiers (LEIs) have been mandatory for all payments between financial institutions. The November 2027 package now confirmed includes Purpose Codes for all CHAPS payments, alongside previously signalled expansions covering LEIs for pacs.004 return payments and pacs.009 COV payments between financial institutions and structured remittance in pacs.008 and pacs.009 COV payments. To support consistent implementation, the Bank will step up engagement with industry to develop guidance on Purpose Code selection and implementation best practice, while expecting CHAPS direct participants to lead on developing and embedding consistent market practice. The Bank reiterated its approach of giving at least 18 months’ notice before expanding enhanced data requirements and expects to provide an update by May 2026 on the LEI and structured remittance expansions. It also confirmed it will not reject CHAPS payments solely due to incomplete or incorrect enhanced data before end-2028 at the earliest.