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CLS to Extend Services in South Korea

CLS Bank has announced its intention to work with its settlement members to expand its third-party settlement services in Korea.

This follows the recent announcement by the Bank of Korea that it is expanding the range of FX transactions eligible for CLS payment-versus-payment (PvP) settlement to include those of non-bank financial institutions.
“Today's announcement is the result of our ongoing collaboration with the Bank of Korea and FX market participants,” says David Puth, CEO of CLS. “Korea is an established financial centre and the Korean won is among the most actively traded currencies in the Asia-Pacific region. Ensuring mitigation of the most significant risk counterparties face in FX transactions – settlement risk – remains a key priority for our organisation.”

Rachael Hoey, head of Asia for CLS, adds, “We have seen an increase in third-party volumes transacted via CLS globally, so this policy change is a welcome development for the FX community. Previously, only FX-licenced banks in Korea were permitted to settle in CLS via a third-party service provider, so this development is a critical step towards further mitigating settlement risk in Korea and the wider FX market.”

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