The US Dollar Bulk Exchange (USBE) is a parallel system to the Retail System. The USBE is used for payment items in US dollars, drawn on a U.S. dollar account at financial institutions in Canada, but settled in the U.S.
Each participant makes entries to reflect the exchange of payment items in various streams with every other participant. Although it is not a clearing and settlement system in the same sense as the Retail System, it provides a similar mechanism to track the exchange of US dollar payment items and the resulting balances due to and from participants. Settlement is effected through correspondent banks in New York and is accomplished through a series of wire payments, and the Bank of Canada is not involved in this process.
Balances are calculated on a bilateral basis between each pair of participants rather than on the multilateral basis used for the Retail System.
Procedures related to the USBE are outlined in Section K of our Rules.