www.cls-group.
com
CLS at a glance
CLS enhances financial stability by providing risk
mitigation services to the global FX market.
We operate the worlds largest multicurrency cash
settlement service to mitigate FX settlement risk for
our settlement members and their clients globally.
With more than 60 settlement members, comprising
the worlds largest financial institutions, and third-party
clients, including banks, funds, non-bank financial
institutions and multinational corporations, we settle
FX trades across 17 currencies*.
In July 2012, the Financial Stability Oversight Council
(established under Dodd-Frank) designated CLS as a
systemically important financial market utility.
On average CLS settles th
equivalent of USD5 t e
rillio
n ad
ay.
How we mitigate settlement risk
We mitigate settlement risk by simultaneously settling the
payments on both sides of an FX trade on a real time basis.
We do this using our unique payment-versus-payment (PvP)
settlement service which is linked to the real time gross
settlement (RTGS) payment systems of the 17 currencies
eligible for CLS settlement. The settlement of these
payments and associated funding is final and irrevocable.
The benefits
At CLS we:
Reduce funding requirements by over 96%, using
multilateral netting
Further reduce funding requirements to 99% by using
other liquidity tools
Increase operational efficiencies by:
Reducing payments by multilaterally netting cash
flows for each settlement member
Identifyingtrade settlement issues in real time, before
settlement date
Maximizing the benefits of straight-through processing
and minimizing operational errors and associated costs
Reduce central bank collateral obligations as a result
of lower funding requirements
Increase trading capacity by reduced use of trading lines.
*Australian dollar, Canadian dollar, Danish krone, euro,
Hong Kong dollar, Israeli shekel, Japanese yen, Korean
won, Mexican peso, New Zealand dollar, Norwegian
krone, Singapore dollar, South African rand, Swedish
krona, Swiss franc, UK pound and US dollar.
What is settlement risk?
(also known as principal risk)

To settle an FX transaction, counterparties

need to exchange a principal (value of the
trade) in two currencies. Settlement or
principal risk 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. The result
is a loss of principal. CLS prevents this
by simultaneously settling the payments
on both sides of an FX trade.

Our services The numbers

Our core settlement service settles payment instructions Average daily volumes submitted: circa 1.2 million instructions
for FX spot, FX forwards, FX swaps and FX options. (Settlement service input: 800,000; Aggregation input: 400,000).

USD/CAD same-day settlement allows members to  verage daily values settled: USD5 trillion.
A
execute and settle same-day trades within an additional Through multilateral netting, the funding required to settle that
single settlement session. amount is reduced to less than USD50 billion a day.

We also provide a trade compression service through
CLS Aggregation Services which reduces the operational
risk and costs associated with high-frequency trading.
Participation: 76 shareholders; 62 settlement members.
 6 settlement members provide settlement services to
2
approximately 11,000 third parties.

The value settled for third-party business accounts for

approximately 20% of the total value settled in CLS.

United States United Kingdom Japan Hong Kong

Financial Square Exchange Tower Mitsui ni-Goukan, 2-1-1 40/F, Suite 4001
32 Old Slip, 23rd Floor One Harbour Exchange Square Nihonbashi Muromachi One Exchange Square
New York London Chuo-ku 8 Connaught Road, Central
New York 10005 E14 9GE Tokyo 103-0022 Hong Kong
USA United Kingdom Japan PRC
tel: +1 212 943 2290 tel: +44 (0)20 7971 5700 tel: +81 (0)3 3517 2791 tel: +852 3520 6000
fax: +1 212 363 6998 fax: +44 (0)20 7971 5729 fax: +81 (0)3 3517 2796 fax: +852 3520 6006

CLS and the CLS Logo are registered trademarks of CLS UK Intermediate Holdings Ltd 2014 CLS Intermediate Holdings Ltd.