CLS Redesigns Cleared FX Service
Posted by Colin Lambert. Last updated: July 30, 2025
CLS has unveiled a redesigned CLS Cleared FX service, which was first launched in 2018 – as was the case with the original launch, LCH ForexClear is the first central counterparty (CCP) to go live on the new platform.
The redesigned service enables CCPs to connect and submit bilateral settlement instructions on behalf of their clearing members, integrating their flows into the main CLS Settlement session. LCH ForexClear has integrated settlements of its cleared deliverable FX contracts into those sessions.
CLS says the redesigned service offers CCPs and their clearing members enhanced risk mitigation, significantly improved operational efficiencies, and greater liquidity benefits through a consolidated settlement model. “The operational efficiencies derived from both services will be advantageous to our business, offering multiple benefits that come from cleared FX trades being integrated in the main CLS Settlement session through CLS Cleared FX,” says Tharidu Gamwara, business manager, global currencies and emerging markets trading at JP Morgan.
“Mitigating risk in the FX market is a major area of focus for our business,” adds, Matthew May, global head of market structure and non-financial risk – FX, EM Rates and commodities at HSBC. “As the largest financial market in the world, robust risk mitigation and capital optimisation in our FX procedures are vital. With LCH ForexClear joining CLS Cleared FX, the benefits of the two services together will be bringing additional efficiency to us and the wider market.”
Highlighting the increased efficiencies, Andrew Cooper, chief services officer at CLS, explains, “CLS has created a more efficient service that will benefit central counterparties such as LCH ForexClear and its clearing members. Our redesigned service offering reflects the broader trend of financial institutions focusing on best practice in mitigating FX settlement risk and increasing efficiencies associated with centrally cleared trades. The new service demonstrates benefits we can offer to the wider FX marketplace by leveraging our unique position as a financial market infrastructure and collaborating with established service providers that share the same client base.”
Andrew Batchelor, head of ForexClear, LCH, adds, “ForexClear and CLS operating under the new redesigned service, will be instrumental in continuing to provide more efficient risk management in the global FX market. The synergy and robust affinities from joining the main CLS Settlement session via CLS Cleared FX will enable us to better serve our clients.”
The Full FX View
This could be an important moment in the FX market if – and it remains an ‘if’ – the redesigned service delivers efficiencies in a cost-effective manner. As noted, this is a relaunch of a service that is seven years old, but the timing could be better this time around, not least because capital costs are a much bigger issue for market participants than they were in 2018.
The FX swaps market, in particular, has eyed clearing for some years now, especially attracted by the capital benefits, but the workflows just haven’t really been there, because they wanted to settle inside CLS but the workflows ran parallel to each other. If this delivers (no pun intended) for these traders then we could see a surge in volumes through the service, as well as more CCPs coming onboard (Eurex Clearing was also connected to the original CLS Cleared FX service).
CLS remains a critical infrastructure for the FX market, and ForexClear has made good inroads into the NDF space especially. The large carrot still dangling, however, is FX swaps, but – as has been the case throughout the evolution of clearing especially – while the integrated service looks exactly what the industry needs, success will only be assured if the economics work.
