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25 November 2004
Standard Bank has become one of only two local banks to be both a full settlement member and shareholder of CLS Group Holdings. CLS Group Holdings is the holding company for CLS Bank that operates the Continuous Linked Settlement (CLS) system, a banking system aimed at removing settlement risk from the global interbank foreign exchange market.
This brings to 71 the number of commercial and investment banks that are shareholders of CLS Bank. CLS Bank links 11 of the world's central banks and many of the world's leading financial institutions. CLS settles over 130 000 instructions a day, with a gross value of more than US$1.3 trillion.
With the CLS system, which was developed in response to regulatory concerns about systemic risk, both sides of a foreign exchange trade are settled simultaneously on a trade-by-trade basis. This mitigates settlement risk.
Says Willie Potgieter, Director global foreign exchange and international banking services at Standard Bank: "The management of risks in the often highly volatile financial markets is extremely important. As one of the leading players in the South African foreign exchange market, Standard Bank recognises the importance of an initiative like CLS, which reduces the risks currently inherent in settling foreign exchange transactions.
"We are glad to play a role in the inclusion of the rand as a CLS Bank-eligible currency."
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