What are wholesale funds transfers? What governs these transfers?

Answer 1

Wholesale funds transfers are nonconsumer electronic transfers of funds. The typical wholesale wire transfer involves sophisticated parties who desire great speed in transferring great sums of money. UCC Article 4A, Funds Transfers, provides the statutory framework for this payment system. Article 4A provides that the parties to a funds transfer generally may by agreement vary their rights and obligations. Also, funds-transfer system rules governing banks that use the system may be effective even if such rules conflict with Article 4A. Rights and obligations under Article 4A can also be changed by Federal Reserve regulations and operating circulars of Federal Reserve Banks. Article 4A defines a funds transfer as a "series of transactions, beginning with the originator's payment order, made for the purpose of making payment to the beneficiary of the order. The term includes any payment order issued by the originator's bank or an intermediary bank intended to carry out the originator's payment order. A funds transfer is completed by acceptance by the beneficiary's bank of a payment order for the benefit of the beneficiary of the originator's payment order." UCC, Section 4A-104(a).