[2] CHATS has been referred by authors at the Bank for International Settlements to as "the poster child of multicurrency offshore systems".
Hongkong Bank acted as the clearing house under this system, settling payments across its books on a net basis on the day following the transactions.
Payments are final, irrevocable, and settled immediately if the participant's settlement account with the clearing house has sufficient funds.
Daylight overdraft is not offered in CHATS; payments that cannot be settled due to insufficient funds are queued.
This prevents banks from having to maintain large balances in their settlement accounts, which accrue no interest, to cover their payments.
Intraday repos that are not reversed at the end of the business day are carried into overnight borrowing.
Direct participants maintain USD settlement accounts with HSBC for payment transactions in CHATS.
Additionally, a membership category called Indirect CHATS Users exists where its banks also conduct their payment transactions through direct participants.
[17] CHATS uses Bank of China (Hong Kong) as its clearing house for settling renminbi payments.