CLS celebrates 20 years of trusted market solutions

3 min read
27 January 2022

In 2022, CLS celebrates 20 years of delivering unprecedented levels of risk mitigation, liquidity optimization and operational efficiencies, playing a key role in the growth of the FX market from USD1.2 trillion in 2001 to USD6.6 trillion in 2019.1 With a proven track record of delivering critical industry-wide services at scale, it continues to adapt and evolve to meet the changing needs of the FX market.

“Over 70 of the world’s most important financial institutions choose to be direct members of CLS, and over 30,000 more market participants benefit from the use of our services. As we celebrate our 20th anniversary, we reflect on why these clients place their trust in us every day and what we deliver to them in return – now and in the future,” says CLS CEO Marc Bayle de Jessé.

To mark this key milestone, CLS will be offering insights from across its global network and exploring what makes CLS the trusted partner in FX settlement, the largest and most liquid market in the world. It will continue to work with the public and private sectors to reinforce its 20 years of achievements and share its ambitions for the future as the FX market continues to evolve.

“We head into our third decade of service stronger than ever, with confidence and the support of our members to enhance our services to further mitigate settlement risk and unlock liquidity across the FX market,” comments Bayle de Jessé.

A service to rely on
The industry has long acknowledged CLS’s payment-versus-payment (PvP) settlement service, CLSSettlement, and the critical role it plays in the orderly functioning of the global FX market – protecting settlement members and their clients from settlement risk. In 2012 it was one of only eight infrastructures to be designated as a systemically important financial market utility by the US Financial Stability Oversight Council.

Speed at scale, value beyond compare
Following a year of heightened FX trading activity, last month CLS set a new record, settling USD15.4 trillion of FX payment instructions in a single day. Thanks to its multilateral netting approach, the total funding required to settle this amount was just USD72 billion (0.5% net funding) – delivering significant capital and liquidity savings to clients and the wider FX ecosystem. This efficiency is only possible due to the unique size, depth and global scale of the CLS network and its reach across the FX ecosystem.

“We head into our third decade of service stronger than ever, with confidence and the support of our members to enhance our services to further mitigate settlement risk and unlock liquidity across the FX market”

Marc Bayle de Jessé
Chief Executive Officer

Infrastructure that is global
Mandated to protect its members and their clients from settlement risk – the most significant risk in the FX market – CLS began settling FX payment instructions in seven currencies for 39 members. Today, CLSSettlement settles on average over USD6 trillion of payment instructions daily in 18 currencies for over 70 members and more than 30,000 third-party participants across the world.

Specialism that evolves
Settlement risk is on the rise, driven by an increase in global trading of currencies that are not eligible for CLSSettlement. Mitigating this risk remains a priority for the industry, and this is why CLS is working with the market to expand its multicurrency automated bilateral netting calculation service, CLSNet. The service is already open for approximately 120 currencies, reducing risk and delivering efficient, automated and standardized post-trade netting calculation and processing services for banks, asset managers and corporates across the globe.

Innovation with purpose
CLS is also working with the market to develop an alternative PvP solution for currencies that currently cannot settle in CLSSettlement. CLS announced an industry pilot to evaluate potential models in Q3 2021.

1. The BIS Triennial Central Bank Surveys (2001 and 2019).


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