Continuous Linked Settlement (CLS) Service Goes Live

CLS Bank declared the elimination of settlement risk in the foreign exchange markets with the live launch of its Continuous Linked Settlement (CLStm) service – settling live instructions for foreign exchange trades. ‘Each side of a foreign exchange trade can now be settled simultaneously and irrevocably, in a payment versus payment (PVP) mode,’ said an announcement. Under CLS, seven of the world’s central banks and many of the world’s leading financial institutions are linked via a global settlement system. CLS has 66 of the world’s financial institutions participating as shareholders. This group represents over 80% of the world’s foreign exchange business by value. An initial 39 of these shareholders have passed trials for CLS Bank Settlement Membership and will start today to begin settling instructions for their ‘bank-to-bank’ foreign exchange activity. The service will be expanded by the end of the year to include customers of CLS Bank Settlement Members.