CLS provides scale, automation and risk-reduction services that underpin the global FX market, combining expansive settlement capacity with innovative post-trade services such as CLSNet to enhance liquidity efficiency and operational resilience.
CLS has been at the centre of the global FX market for more than two decades. Established in 2002 to address Herstatt risk – the settlement risk that arises when one leg of a currency transaction is paid but the other fails – CLS has become the industry standard for payment-versus-payment (PvP) settlement.
Today, it settles more than $7.2 trillion daily across 18 major currencies for over 70 settlement members and more than 37,000 third-party participants.
CLS’s scale and systemic importance are underscored by its regulatory oversight: it is designated a systemically important financial market utility (SIFMU) by the US Federal Reserve and is overseen by 23 central banks. This role defines its strategic priorities – resilience, security and integrity – while ensuring it evolves with market and regulatory needs.
While CLS’s PvP settlement service addresses the world’s largest currencies, emerging market (EM) currencies remain outside its coverage. To mitigate the settlement risks in these currencies, CLS developed CLSNet, a centralised, automated bilateral netting calculation service covering more than 120 currencies (and winner of world’s best post-trade service provider in the 2025 Euromoney Capital Markets Awards).
CLSNet enables participants to significantly reduce their payment obligations by netting offsetting positions before settlement. This reduces liquidity requirements, minimises operational risk and provides standardised, automated workflows. In 2024, CLSNet reached a record daily netted value of $620 billion, and in the first half of 2025 its average daily netted value rose 17% year-on-year to $169 billion.
The service is proving especially valuable for EM currency flows, which accounted for more than 70% of CLSNet’s average daily netted value in 2024. By automating netting for these risk-prone currencies, CLSNet has become an essential complement to CLSSettlement.
Expanding capabilities
CLSNet is distinguished by its fully automated workflow, standard cut-off times and real-time reporting. Unlike bilateral netting solutions, where parties must manually reconcile discrepancies, CLSNet provides definitive net payment obligations with no need for manual confirmation. This eliminates a key source of operational friction and reduces settlement risk.
Lisa Danino-Lewis, chief growth officer at CLS, emphasised this client-focused model. “One of the key things that’s happened in the last year has been the addition of our first buy-side client on CLSNet,” she says. “Bringing the buy-side firm on has driven broader adoption, helping us to continue building a network that delivers real value for all participants.”
CLS continues to expand CLSNet’s capabilities. In 2024, the service began supporting non-deliverable forwards (NDFs), addressing a key requirement for buy-side participants. By supporting the full NDF lifecycle, CLSNet helps standardise and automate processes that were historically fragmented.
One of the key things that’s happened in the last year has been the addition of our first buy-side client on CLSNet
Lisa Danino-Lewis
Further enhancements under development include payment-tracking tools and expanded third-party participation models, which would allow settlement members to offer CLSNet services directly to their clients. These innovations aim to extend the reach of netting benefits, reduce liquidity pressures and embed automation deeper into post-trade processes.
On the settlement side, CLS integrated cleared FX into its main PvP service, enabling consolidated netting of FX, cross-currency swaps and cleared flows. Members now fund just one service rather than multiple pools, further optimising liquidity management.
Resilience and the T+1 transition
With daily settlement volumes sometimes exceeding $19 trillion on peak days, CLS places resilience at the centre of its operations. Its infrastructure includes primary and backup sites as well as a third, cloud-based location. The system is regularly stress-tested to ensure capacity well beyond current market volumes.
The US market’s transition to T+1 settlement in 2024 highlighted CLS’s adaptability. Although less than 1% of CLS flows were directly affected, CLS worked closely with asset managers to educate them on deadlines and pressed custodians to align their cut-off times more closely with CLS’s midnight deadline. These efforts helped minimise disruption and reinforced the market’s preparedness for further regulatory shifts.
CLS’s competitive advantage lies in its impressive efficiencies of scale. Its multilateral netting delivers average efficiencies above 99%, meaning that for every $100 million traded, members typically need to fund only around $1 million. For some participants, efficiencies are even higher, freeing up significant capital for other activities.
This efficiency creates a powerful network effect: the more participants that use CLS, the greater the liquidity and efficiency benefits for all. With eight of the world’s top 10 banks active on CLSNet, and buy-side participation expanding, the platform is increasingly embedded across the FX ecosystem.
Looking ahead, CLS is exploring the responsible use of generative AI to enhance internal processes, while maintaining strict governance frameworks appropriate to a SIFMU. It is also engaged in industry-wide efforts such as the European Securities and Markets Authority’s T+1 committee, helping prepare the market for Europe’s planned transition in 2027.
CLS’s position as the world’s leading FX post-trade infrastructure is built on a combination of systemic importance, operational resilience and continuous innovation. By delivering automation and efficiency in CLSNet, integrating cleared FX into its settlement service and helping the market navigate regulatory shifts, CLS has only strengthened its role as the backbone of the FX market.
