What is Continuous Linked Settlement (CLS)?
Continuous Linked Settlement (CLS) began operation in September, 2002. It is a way of reducing the settlement risk in foreign exchange transactions (for example, one leg of the transaction is settled but the other is not). Currently, CLS operates in seven (7) currencies (USD, EUR, GBP, CAD, CHF, JPY, and AUD). Four more currencies will be added in 2003 (NOK, SEK, DKK and SGD), and further currencies will be considered for inclusion later. Currently, there are more than 65 banks that are shareholders of CLS, and they have all been involved in the development of the service. More banks are becoming shareholders every month as new currencies are considered and accepted. Most shareholders will choose to become “Settlement Members,” although some may opt to be “User Members.” Settlement Members have direct links to CLS to input deals on their own and their customers’ behalf. They effect settlement on the due dates through accounts held at the newly formed CLS Bank. User Members have the sam
