In July 2012, the US Financial Stability Oversight Council designated CLS as a systemically important Financial Market Utility (FMU).
» Press Release
CLS was established in 2002 as a private sector initiative to mitigate settlement risk in the FX market and this remains our core mission today.
Created as a result of unprecedented cooperation among the global FX community, the impetus behind the launch of CLS came from regulatory concern regarding the potential for FX settlement risk to be a major source of systemic risk. This was underlined by the failure of Bankhaus Herstatt in 1974, which challenged the strength of the international banking community and threatened confidence in the global payment system..
A Brief Timeline
||• Alternative models for CLS membership introduced.
• Compression service enhanced to allow prime brokers to participate.
• CLSNet expanded to support more than 140 currencies at launch.
• FX Global Code published.
||• CLS makes aggregated FX data available via subscription.
• CLS extends its technology partnership with IBM.
• Automated payment netting service – CLSNet - begins development.
• Samsung Securities becomes first NBFI to settle on CLS system in South Korea.
• CLS makes aggregated FX trade data available via subscription.
||• BIS BIS FX Working Group to establish code of conduct for FX established.
• Settlement service for CCPs with LCH begins development.
• HUF go-live.
• Cross currency swap settlement launched with IHSMarkit.
• FX compression service launched with Nex TriOptima.
||• CLS wins landmark patent case (Alice).
||• CLS introduces Same-Day Settlement for US and Canadian dollar trades
• BCBS issues FX settlement risk guidance
||• CLS is designated as a systemically important Financial Market Utility (FMU)
• New principles for FMIs published (CPSS-IOSCO)
• US treasury exempts FX swaps and forwards from mandatory clearing
||• CLS Aggregation launched with Traiana
||• Financial crisis
• CPSS publishes a report: Progress in Reducing Foreign Exchange Settlement Risk which renews the focus on FX settlement risk reduction
• Two more currencies added – Israeli shekel and Mexican peso
||• Settlement extended for certain over-the-counter (OTC) credit derivatives – a partnership with the Depository Trust & Clearing Corporation (DTCC)
||• Four more currencies added (Hong Kong Dollar, Korean Won, New Zealand Dollar, South African Rand)
• First fund FX transaction settled
||• CLS adds four more currencies (Danish krone, Norwegian krone, Singapore dollar and Swedish krona)
||• CLS is launched with 39 Members and seven currencies (Australian dollar, Canadian dollar, euro, Japanese yen, Swiss franc, UK pound sterling, US dollar)
||• CPSS publishes a report: Settlement Risk In Foreign Exchange Transactions (the Allsopp Report) – a strategy for addressing FX settlement risk
||• Bankhaus Herstatt fails