CLS Group is planning to expand its third-party FX settlement services to Korea, following a recent announcement from the Korean central bank that could see increased volumes from non-bank financial institutions.
The Korean Won currently accounts for 1.2% of daily FX turnover globally, and the expansion of third-party settlement services to include the currency comes as market infrastructures look to mitigate settlement risk for a wider pool of counterparties.
“Today’s announcement is the result of our ongoing collaboration with the Bank of Korea and FX market participants. Ensuring mitigation of the most significant risk counterparties face in FX transactions – settlement risk – remains a key priority for our organization,” says David Puth, CEO, CLS.
The move from CLS comes following the decision from the Bank of Korea that is expanding the range of FX transactions eligible for CLS payment-verses-payment settlement to include those of non-bank financial institutions. This could mean increased settlement volumes from institutional investors in Korea.
“We gave seen an increase in third-party volumes transacted via CLS globally, so this policy change is a welcome development for the FX community,” adds Rachael Hoey, head of Asia, CLS.
CLS Group Expands FX Settlement To Korea
CLS Group is planning to expand its third-party FX settlement services to Korea, following a recent announcement from the Korean central bank that could see increased volumes from non-bank financial institutions.