CLS raises £160 million to meet new capital demands

CLS raises £160 million to meet new capital demands

FX risk reduction utility CLS Group has raised £160 million from its banking shareholders to meet new capital standards for systemically important market infrastructures and to invest in new technology.

Launched in 2002, CLS is owned by 75 of the world's leading financial institutions. The services applies a combination of payment-versus-payment settlement in central bank funds, multilateral payment netting and a standard legal framework to help mitigate the risk caused by temporal time-lags in currency settlement between banks.

Since the inception of CLS, daily turnover in the global FX market has increased from $1.2 trillion to $5.3 trillion, according to data from the Bank for International Settlements. During this period, CLS achieved a compound annual growth rate of 31.4% in average daily volume.

CLS says the capital increase will help it meet new requirements laid down by banking regulators to improve the resilience of financial market infrastructure platforms.

In addition, CLS says the the capital raise will help it to restructure its balance sheet, invest in technology to improve operational capability and develop new products and services.

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