The Royal Bank of Scotland (RBS) and Banco Bilbao Vizcaya Argentaria (BBVA) have extended their partnerships with Wall Street Systems to manage the FX trade process through continuous linked settlement (CLS).
CLS Bank has been established as a new settlement institution to eradicate settlement risk in the cross-border FX market by ensuring that both legs of a deal are settled simultaneously by the bank. Scheduled for live testing in October, the service has been delayed until next year pending the delivery of software from IBM.
Both RBS and BBVA are working with Wall Street Systems to test connectivity of its new CLS solution to the settlement agency via the CLS Member API. Initial trials using the CLS Member Test Service have proved successful for both inbound and outbound messages and have confirmed that trades processed by The Wall Street System treasury engine can be automatically transmitted and updated in the CLS system, says the company.
Wall Street Systems's CLS solution is either available as a stand-alone CLS module or can be fully integrated with the front and back office modules as well as the cash management tools of The Wall Street System treasury engine.
At RBS the software is being implemented in London - which will act as the control branch. Max Boulton, financial markets project manager at The Royal Bank of Scotland, says: "The bulk of the CLS solution has now been implemented into our production systems, and we have already exercised the scheduled payments and Pay-In Call capability with one nostro correspondent agent by making real payments across live systems."
"In the future, using CLS, we will be able to drastically reduce the number of settlement payments, while expanding the number of transactions - making our whole FX operation a lot slicker," he adds.
At BBVA the CLS solution is being implemented in Madrid, which will act as the control branch, and will also be rolled out to support transactions from BBVA's branches in Milan, London and New York. Branch funding capability - enabling the Madrid office to fund any positions taken by its branches - is also incorporated in the solution.