Continuous Linked Settlement Bank (CLS)

CLS was created in 2002 by 20 leading dealers of world foreign exchange market as specialized interbank settlement center. The organization has the American banking license.

Why transactions in CLS are profitable

Existing in the system of the rule (April, 2014) allow to manage risks: if the bank decided to exchange, for example, pounds for yuans, a system guarantees receiving yuans in the necessary volume and at the stipulated rate. Calculations out of the CLS system can lead to losses of an izz of change in the exchange rate of currency in time from the moment of the conclusion of the transaction before its execution.

Performance Indicators

A system is used for commission of very big deals, their volume can reach 3‑4 trillion dollars in separate days. In it 95% of all transactions on 17 currencies entering it and more than 50% of all currency and exchange transactions in the world are made (April, 2014).

Ruble in CLS

Inclusion of ruble in CLS will mean growth of its popularity and liquidity because, for example, some banks do not trade at all in currency which does not enter this system. Inclusion of ruble in CLS will mean that it became completely hard, having stopped being "formally convertible". It means for the ordinary person that rubles can be exchanged abroad at a normal rate, and businessmen will have an opportunity to sell and buy goods for rubles.

2011: Forefront of inclusion of ruble in CLS

For the first time announced intention to achieve inclusion of ruble in number of accounting currencies of CLS of the Central Bank in 2011. Process of reduction of the Russian payment system in compliance to requirements of CLS bank began. According to the actions plan according to the introduction, for example, implementation of international standards of the electronic messages necessary for the accession to CLS should begin in the second half of 2015, is going to pass to this standard by 2017. Besides, Russia needs to revise the legislation, in particular to permit to open ruble accounts in the Central Bank to foreign banks.

2014: The Government of the Russian Federation suggests to allow foreigners to participation in NPS

In April, 2014 it became known that the Government of the Russian Federation, despite economic sanctions from the USA, hopes to make ruble freely convertible currency. In the response on amendments to the bill "On the National Payment System" the Cabinet of Ministers suggests to include ruble in number of accounting currencies of CLS and also to allow foreign banks to participation in the national payment system (NPS).

In a withdrawal of the government it is about foreign banks, "the central payment clearing counterparties performing functions". As the foreign bank explained RBC a source in the Bank of Russia, in this formulation is CLS (Continuous Linked Settlement Bank) performing the international trading of currencies, its inclusion in the Russian payment system is necessary to enter ruble into number of currencies which are trading in international market. "It will make ruble convertible and will increase its attractiveness" — adds a source^[1].

For April, 2014 with the rights of the third party (can buy currency through clearing banks) participate in CLS Alfa-Bank which conducts transactions through UBS, and VTB operating through JP Morgan. In November, 2012 process of the accession to CLS began Sberbank. Now they exchange currency through providers who charge the fee. The entry of Russia into CLS will allow to do it directly, saving on the commission.

As a rule, the largest credit institutions become official clearing banks from the country in CLS. "It is banks with the large volume of a currency component, they can act as liquidity providers if ktoto from participants cannot pay off according to the transaction" — the chairman of the board of National payment council Alma Obayeva explains. To be integrated into a system, the bank needs to pay a contribution in the amount of 4.5 million dollars. "Most likely, it will be interesting to the first two-three banks" — Obayeva adds. Earlier representatives of the Central Bank said that Sberbank and VTB will be the most probable candidates.

Readiness of bank to include ruble in number of the currencies converted in international market is not known yet, however the interlocutor of RBC who is taking part in negotiations with CLS claims that at last recently another meeting in the Central Bank said that "process goes according to the plan". According to a source of RBC in the payment market, not a fact that CLS will make the positive decision on the Russian currency as the relations between Russia and the USA remain intense, and CLS have the American license.

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