CLS Launches Same-Day FX Gross PvP Settlement Service CLSNow

Provider of risk mitigation and settlement services for foreign exchange (FX) dealers and institutions, CLS, has announced the launch of a new service this Wednesday - CLSNow, a bilateral, same-day FX gross payment-versus-payment (PvP) settlement service.

The new service allows banks to exchange currency positions with less settlement risk, due to the fact that settlement is occurring on a near-real-time basis. According to the statement, JPMorgan and Goldman Sachs were the first banks to go live on CLSNow.

Initially, the currencies offered through CLSNow are the Canadian dollar (CAD), Euro (EUR), British pound (GBP), and US dollar (USD). Further currencies will be added in the future, the statement said.

CLSNow to reduce settlement risk and improve Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term

In the statement released today, CLS claims that its new service mitigates Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term settlement risk, improves liquidity management, and also provides balance sheet benefits for banks.

Commenting on the service, Alan Marquard, Chief Strategy and Development Officer, CLS, said: “With traditional sources of intraday liquidity contracting, there is a growing need for a safe, intraday currency settlement service."

“The launch of CLSNow meets this need, further enhances settlement risk mitigation and is another example of how CLS is working to solve challenges for the FX industry."

At present, the average daily gross value settled in the same-day forex markets is around $300 billion. This is outside of CLSSettlement and across all currencies that settle in CLS.

Currently, the average daily gross value that is settled in the same-day FX market, outside of CLSSettlement and across all currencies that settle in CLS, is approximately USD300 billion. On the FX market as a whole, more than $5 trillion is traded on average per day.

"Removing risk and improving availability of intraday liquidity are central to providing a best-in-class offering to our clients,” added Scott Lucas, Head of Intraday Liquidity, J.P. Morgan.

“The go-live of CLSNow is a significant step for the industry and can positively evolve the same day market by delivering these risk and liquidity benefits. We are delighted to have helped develop, and be a first adopter of, the new service."