Average daily trading values at FX settlement bank, CLS, declined by 2.6% for the month of May from the previous month, as traders took a step down on lower volatility in the markets.
The total volume of instructions reported by CLS which collates settlement and its aggregation service was 1,329,316 an increase of 4% from April. CLS Settlement Service received 882,877 instructions, whereas its Aggregation Service received 416,235 instructions.
CLS Bank completed its decade long service to the FX markets last year, originally founded in 2002, the industry initiated bank was created to deliver and operate services to mitigate settlement risk in the world’s most liquid asset class. The bank is a not-for-profit organisation and is managed by member institutions such as the world’s leading investment banks that work alongside central banks. With global trade and commerce rising, settlement risk was a concern for participants, the bank aims is to streamline the way payments and transactions were delivered across currencies.
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The bank is looking to enhance its position as the preferred settlement bank for global FX, a spokesperson for CLS explains: “CLS is hoping to introduce same-say settlement in 2013. The effort, focused on settlement for the US dollar/Canadian dollar pair, was underlined as a requirement following the peak of the financial crisis, that highlighted the same-day market as being underserved by CLS.
“Same-day settlement will require both Real Time Gross Settlement (RTGS) and the CLS system to be available for US and Canada. Once the capability is rolled out in North America, the offering can serve as a proxy for same-day settlement in other regions.”
Real Time Gross Settlement is the continuous settlement of payments on an individual order basis without netting debits with credits across the books of a central bank.
CLS Bank settles major currencies including; Euro, Hong Kong Dollar, Canadian Dollar and other major pairs.