CLS welcomes the BIS Markets Committee’s recent letter to the GFXC

26 January 2024

As the leading provider of payment-versus-payment (PvP) settlement for the FX market, CLS welcomes the Bank for International Settlements Markets Committee’s recent letter to the Global Foreign Exchange Committee (GFXC) regarding the upcoming review of the FX Global Code.

The letter commends the GFXC’s enhancements to the FX Global Code’s settlement risk principles in the last review cycle and encourages its ongoing efforts to ‘promote market-based solutions to increase PvP settlement and reduce FX settlement risk.’

CLS has long advocated for greater PvP adoption to mitigate FX settlement risk. Analysis undertaken by CLS with a subset of its settlement members indicated that around 90% of the settlement risk associated with their FX trades in CLS-eligible currencies was successfully mitigated via CLSSettlement with full PvP. The remaining challenge is mitigating settlement risk for non-CLS eligible currencies, which CLS believes is best accomplished through collaboration between the public and private sectors. CLS will continue to work with both sides to find new ways to further mitigate settlement risk in the FX industry.


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