The CLS age dawns

Continuous-linked settlement (CLS) has finally arrived. Technological setbacks have been resolved and the foreign exchange industry is preparing itself to benefit from the initiative, which aims to eliminate settlement and clearing risk. But as settlement member banks prepare to turn their attention to winning third-party business, they may encounter something of a shock: third-party uptake is proving slower than anticipated, according to some observers at least ( view article ).

CLS certainly held the forex market’s imagination for a number of years, and is likely to continue doing so – at least until the settlement member banks recoup their initial investment in the project – but the market is also increasingly concerned with the emergence of hybrid products and the effects of consolidation.

JP Morgan Chase and Citigroup are just two of the banks making a concerted effort to more closely align their interest rates and forex business lines. Could the practice

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Stemming the tide of rising FX settlement risk

As the trading of emerging markets currencies gathers pace and broader uncertainty sweeps across financial markets, CLS is exploring alternative services designed to mitigate settlement risk for the FX market

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