CLS Group (CLS), a leading provider of risk mitigation and operational services for the global foreign exchange (FX) market, has introduced two new models for settlement membership – affiliated settlement membership and non-shareholder settlement membership – in addition to the existing shareholder and central bank settlement membership categories.
The affiliated settlement membership category allows institutions to have more than one entity within a corporate group become a settlement member. This category is aimed at institutions seeking to segregate their FX businesses to manage their own CLS participation and correspondent banking relationships. It also removes the reliance on internal clearing and intergroup limits, helps settlement members meet their regulatory ring-fencing obligations and facilitates recovery and resolution planning.
Non-shareholder settlement members agree to a different commercial construct in lieu of a shareholding in CLS Group Holdings. Instead of an investment in shares, non-shareholder settlement members will pay a monthly minimum fee for a defined number of months. Beyond the defined time period, non-shareholder settlement members will pay for their submissions. All other membership eligibility criteria remain the same as shareholder settlement members and non-shareholder settlement members have the same rights and responsibilities as shareholder settlement members.
All settlement members, irrespective of their settlement membership category, will benefit from the same risk mitigation, multilateral netting and operational efficiencies and business growth opportunities CLS provides.
David Puth, CEO of CLS, comments: “The introduction of alternative models for membership is an important development in our efforts to broaden access to CLS. Growing our global presence through such expansion efforts is a key part of our growth strategy to further reduce risk, underpin financial stability and deliver the unique benefits of CLS to the global FX market. These two participation models will allow CLS to build on its current growth in membership, and we look forward to welcoming new members.”