CLS Group (CLS), a provider of risk mitigation and operational services for the global foreign exchange (FX) market, has started settling payment instructions in the Hungarian forint (HUF) on behalf of its settlement members. This brings to 18 the total number of currencies eligible for settlement through CLS.
CLS is a systemically important financial market utility, whose mission is to mitigate settlement risk in the global FX market. During 2015 CLS has settled, on average, the equivalent of $4.8 trillion per day on behalf of its 64 settlement members and 18,000 indirect participants.
The Magyar Nemzeti Bank (MNB), Hungary’s central bank, sought to enhance financial stability in the Hungarian market by making its currency, the HUF, eligible for CLS settlement. Hungary recognised that a partnership with CLS would reduce settlement risk among banks trading the HUF and would strengthen the overall stability of the Hungarian financial system. While adding a new currency to the platform is a major endeavour, involving extensive preparation and testing, the project was completed in less than two years as a result of close co-operation between the two parties.