Segments

Continuous Linked Settlement (CLS) is a concept pioneered by the major players in the foreign exchange market to reduce settlement risk arising from the gross settlement of Foreign Exchange (FX) trades. CLS Bank began operations in September 2002. The CLS Bank is regulated by the Federal Reserve Board in consultation with the central banks that have currencies settling through its system. There are over 70 direct settlement members along with over 30,000 participants comprising of banks, funds, non-bank financial institutions and multinational corporations settling cross currency deals through CLS Bank as third parties. Currently, eighteen currencies are settled through the CLS Bank viz AUD, NZD, JPY, HKD, SGD,KRW, CHF, DKK, SEK, NOK, HUF, EUR, GBP, ZAR, ILS, MXN, CAD, USD.

CCIL started the settlement of cross currency deals of banks in India through the CLS Bank in April 2005. Through this arrangement, CCIL aggregates trades reported by all Member banks and enables banks to collectively enjoy the benefits of cross currency settlement through CLS Bank. This is a unique experiment whereby cross border settlement of an entire country is being achieved through a third party arrangement. Settlement through the CLS mechanism is on a payment versus payment basis. Currently, CCIL offers settlement in 14 CLS eligible currencies through the CLS Bank viz. AUD, NZD, JPY, HKD, SGD, CHF, DKK, SEK, NOK, EUR, GBP, ZAR,  CAD, USD.

Benefits

Advantages of the CCIL CLS Services includes 

• Reduction in Settlement Risk
• Expansion of foreign exchange trading - access to more counterparties, 
• Availability of  real time information on trade status, 
• Settlement  and funds flow
• Eliminating the need for counterparty confirmations
• Use of local currency as collateral
• leverage of infrastructure and collateral with CCIL