CLS, a financial markets infrastructure (FMI) delivering settlement, processing and data solutions across the global FX ecosystem, has witnessed continued growth in settled values of cross currency swaps submitted to CLSSettlement, with a 27% year-on-year increase (Q2 2022).

Cross currency swaps exhibit significant settlement risk exposure due to the high value of the initial and final principal exchanges. By using CLSSettlement, participants can mitigate the settlement risk associated with these transactions. Furthermore, as cross currency swap flows are multilaterally netted against other FX transactions within CLSSettlement, users also benefit from a significant reduction in daily funding requirements.
 
The increase in traded values in cross currency swaps submitted to CLSSettlement demonstrates industry commitment to the updated version of the FX Global Code’s settlement risk principles, including greater emphasis on the use of PvP mechanisms where available.