CLSSettlement
Investment Managers
Mitigate settlement risk for your FX trades while benefiting from operational efficiencies, in addition to best-in-class netting and liquidity management. Our world-class payment-versus-payment settlement service delivers huge efficiencies and savings for our clients.
Our world-leading FX settlement service is available both directly, to settlement members, and indirectly, to third-party participants. Over 75 of the world’s most important financial institutions choose to be settlement members of CLSSettlement – and over 38,000 more use our service, including banks, funds, non-bank financial institutions and multinational corporations.
Reduce risk and improve efficiency
Over 500 investment managers are directing CLSSettlement to settle FX transactions for over 37,000 funds. Each fund is protected from the most significant risk associated with currency trading: settlement risk. This is the risk that one party to an FX transaction delivers the currency it sold, but does not receive the currency it bought from its counterparty, resulting in a loss of principal.
How we mitigate settlement risk
We mitigate settlement risk by simultaneously settling the payments on both sides of an FX trade. We do this using our unique PvP settlement service which is linked to the real-time gross settlement (RTGS) systems of the 18 currencies eligible for CLSSettlement. The settlement of these payment instructions is final and irrevocable.
Investment managers are directing their funds to our multicurrency cash settlement service via their custodians. Custodians then connect investment managers to CLSSettlement, enabling them to submit trades and see real-time trade status information. The custodians also process all of the payment instructions and funding on behalf of their customers.