D. The United States Bulk Exchange System (USBES)

• Author: M.H. Ogilvie
• Profession: LSM, B.A., LL.B., M.A., D.Phil., D.D., F.R.S.C. Of the Bars of Ontario and Nova Scotia Chancellor's Professor and Professor of Law, Carleton University
• Pages: 329-330

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The United States Bulk Exchange System (USBES) is the automated settlement system that has been operated by the CPA since September 1989 for the clearing and settlement of payments in U.S. dollars in Canada, reflecting the fact that numerous Canadians and Canadian companies maintain U.S. dollar accounts in Canadian banks and make payments in U.S. dollars. The ACSS Rules Manual (Rule K1) contains the rules for the operation of this system, which are relatively similar to those for the ACSS generally. The USBES governs both paper and electronic payment items drawn only on U.S. dollar accounts in Canadian bank branches and not on U.S. dollar accounts held at a U.S. branch of a Canadian bank or U.S. dollar payment items drawn on any other bank accounts in the U.S. or outside Canada.

Paper items are exchanged by direct clearers at five regional settlement points (Montreal, Toronto, Winnipeg, Calgary, and Vancouver) in a separate process from the ACSS Canadian dollar clearing but operating in a similar manner. Paper items acceptable for clearing include cheques, drafts, and postal money orders, as well as certain remittance items sold by Canadian financial institutions and payable at their correspondents in the United States. Participating direct clearers encode payment items with their amount payable and microfilm them, and then they are machine-sorted for physical delivery to the branches on

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which they are drawn for the pay/no-pay decision...