Clssettlement Overview Feb2022
Clssettlement Overview Feb2022
Clssettlement Overview Feb2022
CLSSettlement
70+
settlement members
Our FX settlement service is available both directly, to settlement members, and
indirectly, to third-party participants. Over 70 of the world’s most important financial
institutions chose to be settlement members – and over 30,000 more use our service,
including banks, funds, non-bank financial institutions and multinational corporations.
30,000+
participants around the
world use our services
The benefits indirectly through our
• Risk mitigation and management Our service is supported by a robust settlement members
• Capital and liquidity efficiencies and resilient infrastructure within
6.0+
a comprehensive and well-established
• Operational and IT efficiencies
legal framework.
• Business growth opportunities
18
of New York. We are also overseen by the
clients from the most significant risk CLS Oversight Committee, a co-operative
in the FX market – settlement risk. oversight arrangement established by the
We do this by simultaneously settling central banks whose currencies are eligible of the most actively traded
payment instructions relating for CLSSettlement. currencies globally1
to FX trades using our unique
Australian dollar, Canadian dollar, Danish krone,
1
Systemically important
payment-versus-payment (PvP) system.
euro, Hong Kong dollar, Hungarian forint,
Israeli shekel, Japanese yen, Korean won, financial market
We deliver huge efficiencies and savings for Mexican peso, New Zealand dollar, Norwegian krone, infrastructure critical to
Singapore dollar, South African rand, Swedish krona,
our clients, maximizing the advantages of the orderly functioning
Swiss franc, UK pound sterling and US dollar.
straight-through processing to deliver of the global FX market
operational efficiencies and minimize
associated costs. In addition, our approach
to multilateral netting shrinks funding
Awards:
Best Trading
requirements by over 96% on average, so
our clients can put their capital and Infrastructure Provider
resources to better use. American Financial
Technology 2020
Best FX Settlement &
Risk Mitigation Solution
FX Markets Asia 2020
Best FX Settlement &
Risk Mitigation Solution
FX Markets Asia 2021
Market Infrastructure
of the Year
Award of Excellence
Regulation Asia 2021
Settlement Processing Data
How it works – the settlement cycle On an average day, we settle over USD6.0 trillion
When an FX trade eligible for CLSSettlement is executed by on behalf of our clients. However, the funding required
a settlement member or their customers, we receive electronic to settle this amount is determined on a multilateral netted
payment instructions for both sides of the trade. Our system basis (where each settlement member only transfers the
authenticates and matches the information, which provides net amount of its combined payment obligations in each
legal confirmation and stores the information until the agreed currency), while still settling the gross value of its instructions.
settlement date.
We also offer a liquidity management tool to our settlement
On each settlement date, we simultaneously settle each members – in/out swaps. This service, combined
pair of matched payment instructions that satisfy three risk with multilateral netting, results in an average funding
management tests. At the start and end of a normal business requirement of less than 1% of the total value of all trades
day, each settlement member’s multicurrency account has for participating settlement members – delivering
a zero balance. The funding and pay-out of multilateral net best-in-class liquidity management.
positions is conducted using a daily, defined schedule and
settlement members pay and receive funds through CLS’s What is settlement risk?
central bank account in each currency via their own accounts To settle an FX transaction, counterparties need to
or nostro bank accounts. exchange principal (value of the trade) in two currencies.
Settlement is the risk that one party to an FX transaction
The settlement of payment instructions and the associated delivers the currency it sold, but does not receive the
payments across the books of CLS Bank is final and currency it bought from its counterparty. The result is
irrevocable. Finality is one of the most important elements a loss of principal. CLS mitigates this by simultaneously
of CLSSettlement. settling the payments on both sides of an FX trade.
20:00 22:00 00:00 02:00 04:00 06:00 08:00 10:00 12:00 14:00 16:00 18:00 20:00
Completion of pay-in
Pay-ins/pay-outs Settlement /pay-out process
CET CET
FX Global Code
Using CLS products and
services plays an integral part in
helping you comply with the
FX Global Code. Find out more at
For more information please email sales@cls-group.com
cls-group.com
Trusted by thousands of counterparties within the global FX ecosystem, London New York info@cls-group.com
CLS makes FX safer, smoother and more cost effective. Trillions of dollars’ Hong Kong New Jersey cls-group.com
worth of currency flows through our systems each day. Tokyo
All views or opinions expressed in this document are CLS’s and do not reflect the position of any other organization. The information included herein does not constitute investment or financial advice and should not be relied upon as such.
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