CLS considers membership category for CCPs
"Allowing CCPs to settle FX trades bilaterally would reintroduce Herstatt risk, so it would certainly be preferable to have CCPs become either direct or third-party members of CLS," says LCH.Clearnet executive
Foreign exchange central settlement provider CLS Bank is considering the creation of a new membership category for central counterparties (CCPs) developing clearing services for FX derivatives, the firm has told FX Week.
Although precise details on which over-the-counter contracts will be subject to mandatory clearing requirements still have to be finalised in the US and Europe, several CCPs are
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