bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

HSBC plans to introduce later this year a service aimed at eliminating settlement risks in foreign-exchange transactions.

The continuous linked settlement (CLS) system, jointly developed by CLS Bank Services and 60 financial institutions including HSBC, is a mechanism designed to reduce settlement delays due to time-zone differences.

When it becomes available in October, it will enable transactions in seven major currencies, including the United States dollar, euro and British pound.

CLS Bank president and chief executive Joseph De Feo said the service would eventually be extended to cover other currencies, including the Hong Kong dollar.

'We have been holding discussions with the HKMA [Hong Kong Monetary Authority] and we believe the Hong Kong dollar will be included by the end of 2002,' he said yesterday.

HSBC head of institutional banking (Asia Pacific) Geoff Armstrong said the bank would be offering a full global CLS service later this year.

'But it's too early to say how much in savings this will generate,' he said.

According to Mr Armstrong, the CLS system will complement the real-time gross settlement system (RTGS), also aimed at reducing settlement risk.

Mr De Feo said while the RTGS was associated with a single currency, the CLS system would bring together settlement across different currencies.

'The system will provide real-time linkages between central banks and commercial banks [in different countries] through the CLS Bank,' he said.

The 60 CLS shareholders include HSBC, Standard Chartered Bank, Goldman Sachs and Morgan Stanley.

According to Mr De Feo, an initial investment in the CLS system of US$200 million would be equally split among the shareholders.

He said the system would enable financial institutions to address settlement risks caused by time-zone differences, as cross-border transactions became more sophisticated.



China’s offshore yuan breaks major benchmark as appreciation momentum builds

China expands digital-yuan push to Singapore and Asean trade routes

Forget the US dollar. Watch water and energy resources instead

China showcases US joint effort after pair sentenced over drugs-related money laundering

Foreign exchange market

System to smooth settlement risks in HSBC foreign exchange dealings