HM Treasury has published a consultation on secondary legislation to support the Image Clearing System (ICS) for cheques.
The legislative proposals follow the amendments to the Bills of Exchange Act 1882 introduced by the Small Business, Enterprise and Employment Act 2015, which allowed the introduction of cheque imaging. This aims to cut down cheque clearing times to one day by clearing cheques based on a digital image of the cheque rather than the paper object.
The proposals relate to:
- the provision of a copy of the cheque as evidence of payment, upon request by the customer; and
- compensation to be payable by the payee’s bank to the customer, if the customer suffers a loss and is not otherwise compensated.
The consultation closes on 1 December 2017 and the legislative proposals are intended to be effective from April 2018.