CLS (payment system)

The central banks of many countries actively supported the initiative to create such a bank for international settlements . The European Central Bank and the Bank for International Settlements also supported. The Bank is an American credit institution with special status, under the joint supervision of the Fed and central banks of other countries ^[3] .

At its core, Bank CLS is a payment system that provides multi-currency netting . The main task to be solved by creating such a settlement center was the elimination of the Hertstatt risk on FOREX . Risk is eliminated using the principle of “payment versus payment” (payment-versus-payment - PvP). Settlement in one currency is carried out exclusively if settlement in the second currency is simultaneously settled. CLS Bank acts as the third party to the transaction, which market participants trust to conduct settlements ^[3] .

The bank began to function on September 9, 2002 . Initially, it serviced settlements in seven leading currencies: US dollar , Euro , Japanese yen , British pound sterling , Swiss franc , Canadian and Australian dollars. Later, they joined the Swedish , Norwegian and Danish crowns, Hong Kong , New Zealand and Singapore dollars, as well as the Israeli shekel , South African rand , South Korean won , Mexican peso , Hungarian forint ^[1] .

A feature of settlements through CLS is that, unlike the traditional scheme of interbank correspondent relations in which counterparties to a transaction transfer each other the sold currencies through their correspondent banks, counterparties using this payment system carry out settlements of their transactions through the accounts of a specialized settlement institution on conversion operations - CLS Bank. Acting on the principle of PvP (payment versus payment), CLS Bank only pays out the purchased currency if the sold currency is received. This mechanism almost completely eliminates the risk of losing the main transaction amount ^[4] .

The founders of the bank have a multi-currency account with CLS Bank and they directly send instructions to the bank on the settlement of transactions that are immediately executed. All other users of the system are forced to make settlements through participants who have accounts with CLS bank. For each currency, the time of the exchange operations is indicated in local currency time ^[4] . Payments through the bank pass in several stages. At 00:00 CET, dealers send detailed instructions on making settlements to CLS Bank. At 06:30 CET, on the basis of instructions from CLS Bank, it calculates the net position of players in each currency and sends the table of planned payments to all dealers. From 07:00 to 12:00 CET, the bank conducts all settlements.

During the operational day, CLS Bank can use the services of seven national RTGS systems. In Australia, settlements are made during a special evening session. Payments between user members and CLS Bank are made on a net basis, and between the bank and settlement participants on a gross basis ^[3] .

According to the Bank for International Settlements , CLS accounts for more than 55% of all international foreign exchange transactions . On average, CLS daily calculates 579 thousand conversion operations totaling $ 3.3 trillion. In 2008, CLS for the first time in its history carried out more than 142 million conversion operations totaling $ 1 quadrillion ^[5] .

At first, the system conducted operations with seven currencies , from November 16, 2015 there were eighteen of them:

1.   U.S. dollar
2.   Euro
3.   British pound
4.   Japanese yen
5.   Swiss frank
6.   Canadian dollar
7.   Australian dollar
8.   Swedish Krona (since September 2003)
9.   Danish Krone (also)
10.   Norwegian Krone (=)
11.   Singapore dollar (=)
12.   Hong Kong Dollar (since December 2004)
13.   South Korean Won (same)
14.   New Zealand Dollar (=)
15.   South African Rand (=)
16.   Mexican Peso (since May 2008)
17.   Israeli New Sheqel (since May 2008) ^[6]
18.   Hungarian Forint (since November 2015) ^{[7] [8]}

The Russian Central Bank currently advocates the inclusion of the ruble in the CLS system. Proponents of such an inclusion note that it is joining this system that will make the ruble fully convertible, which will make it possible to use ruble cards abroad without any difficulties with a minimum exchange fee.

The terms for joining the ruble to the CLS system are still unknown. ^{[9] The} accession of the Central Bank of the Russian Federation to the CLS system can also slightly increase the scale of the movement of speculative capital across the borders of the Russian Federation and slightly increase the volatility in the foreign exchange markets within the framework of the floating Russian ruble model - in exchange for a significant reduction in the cost of international ruble transactions.

If the program is implemented, the Central Bank of the Russian Federation will become the 19th central bank represented in the system that provides settlements in Russian rubles, along with the actual managing system of the Federal Reserve Bank of New York (settlement bank CLS) and 17 central banks and monetary agencies of the world. At the same time, the Central Bank of the Russian Federation must ensure the provision of netting for settlements in the CLS system in Russian law and the possibility of opening ruble accounts of non-residents. The Central Bank of the Russian Federation operates within the framework of the plan to create an international financial center in Moscow and Russia's accession to the OECD .

In July 2011, the Russian bank VTB joined the clearing system CLS. At the same time, before joining Russia to the CLS, VTB works through its provider, JPMorgan Chase Bank. ^[ten]

In November 2011, the Central Bank of the Russian Federation outlined the idea of ​​turning the ruble into the 18th CLS currency in the account as the official task of the regulator for 2012. ^[eleven]

On April 18, 2014, the Russian Government approved the bill on the national payment system (NPS) ^[12]

September 22, 2014 CLS postponed the inclusion of the ruble in the list of currencies of the system, scheduled for November. ^[13] The exact date for the inclusion of the ruble in the system is still unknown, but 2015 is indicated. ^[14]

Preparation of the ruble for joining the CLS continues. On October 30, 2014, the system opened an account with the Central Bank of the Russian Federation. ^[15]

• CLS official website

• Forex trading