CLS solidifies its position.

This article reports that Continuous Linked Settlement (CLS), the electronic settlement network for foreign exchange, is handling a growing proportion of transactions globally, according to a new report as of June 2004. The survey shows that CLS is becoming an increasingly established and integral part of the foreign exchange markets. But some of the network's earlier plans, such as adding money market instruments, have been delayed. The report by TowerGroup found that two-thirds of the member banks of CLS now use it to settle at least 50% of their daily foreign exchange volumes. TowerGroup predicts that by the end of 2005, nearly 90% of CLS members will be using the network that extensively. Banks feed trades into the system and CLS matches and settles both sides of each trade simultaneously at fixed points through the day. Jonathan Butterfield, executive vice-president of marketing and communication at CLS Bank, says he is pleased but not surprised at the findings of the TowerGroup report. The creation of CLS was the result of a protracted period of consultation with banks and central banks. The next step for CLS is to develop market data services based on the flows it observes, which will make the system more relevant to the front office at banks rather than catering predominantly to the back office.