CLS has unveiled CLSNow, a same day settlement service that was first mooted in September 2017. The bilateral, same-day FX gross payment-versus-payment (PvP) settlement service has been launched with JP Morgan and Goldman Sachs as the first banks to go live.
The firm says CLSNow enables banks to exchange currency positions with mitigated settlement risk on a near-real-time basis. Currencies offered include the Canadian dollar, euro, UK pound sterling, and US dollar. Additional currencies will be added over time, it adds, noting that the service mitigates FX settlement risk, enhances liquidity management, and provides balance sheet benefits for banks. 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 $300 billion.
“With traditional sources of intraday liquidity contracting, there is a growing need for a safe, intraday currency settlement service,” says Alan Marquard, chief strategy and development officer, CLS. “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.”
Scott Lucas, head of intraday liquidity, JP Morgan, adds, “Removing risk and improving availability of intraday liquidity are central to providing a best-in-class offering to our clients. 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.”