CLS is a global multi-currency settlement system that aims to eliminate foreign exchange (FX) settlement risk due to time-zone differences. The CLS settlement service, provided by CLS Bank, allows both legs of a FX trade submitted by members to be settled simultaneously across the books of CLS Bank and therefore guarantees finality and irrevocability of the settlements.

CLS went live in September 2002 and initially settled FX transactions in seven major currencies - the Australian Dollar, Canadian Dollar, Euro, Japanese Yen, Pound Sterling, Swiss Franc and US Dollar. The Singapore Dollar (SGD) was included in CLS in September 2003, together with the Danish Krone, Norwegian Krone and Swedish Krona. As a result, FX trades involving SGD and other CLS currencies can be settled in CLS without exposure to FX settlement risks.

Three local banks - DBS Bank Ltd, Oversea-Chinese Banking Corporation Ltd and United Overseas Bank Ltd, who are CLS shareholders - started settling their eligible FX trades through CLS Bank in December 2002. For efficiency, the three banks have established Clearing & Payment Services Pte Ltd (CAPS), a common clearing utility, to process their CLS transactions.

Oversight

CLS is regulated and supervised by the Federal Reserve in the US as an Edge corporation. The US Federal Reserve also chairs the CLS Oversight Committee (OC), in which MAS participates along with other central banks. The CLS OC provides a mechanism for central banks whose currencies are settled in CLS to carry out their individual oversight responsibilities.

The US Federal Reserve organises and administers the CLS OC, which operates in accordance with the Protocol for Cooperative Oversight of CLS (Protocol). The Protocol was adopted by the CLS OC to avoid duplication of effort by the central banks, foster consistent, transparent communications between the central banks and CLS, and enhance transparency among the participating central banks regarding the development and implication of international and domestic policies applicable to CLS.

CLS is a designated payment system under the Payment and Settlement Systems (Finality and Netting) Act 2002 .

Resources

Protocol for Cooperative Oversight of CLS

The Singapore Dollar Cheque Clearing System (SGDCCS), US Dollar Cheque Clearing System (USDCCS) and Interbank GIRO System (IBG), collectively called the SACH systems, are provided by the Singapore Automated Clearing House (SACH). These systems are operated by the Banking Computer Services Pte Ltd (BCS).

The SACH systems process mainly interbank retail payments. These retail transactions form a large volume of important business and retail transactions such as salary and bill payments. Obligations from financial transactions such as those arising from stock trading may also be settled through SACH systems. SACH clears transactions on a multilateral deferred net settlement basis.

Actual funds settlement for IBG and SGD cheques take place in MEPS+ while for USD cheques, settlement occur in the Cheque Settlement System operated by Citibank N.A., the appointed settlement bank for USDCCS. These systems are designated under the Payment and Settlement Systems (Finality and Netting) Act to provide for the enforceability of netting arrangements under certain scenarios and to give certainty to the default arrangements of these systems in the event of the insolvency of a participant.

NETS was founded in 1985 to establish Singapore’s national PIN debit scheme, NETS Electronic Funds Transfer at Point-of-Sale (EFTPOS). The transactions settled via NETS EFTPOS are mainly higher volume lower value retail payment transactions.

NETS was founded in 1985 to establish Singapore’s national PIN debit scheme, NETS Electronic Funds Transfer at Point-of-Sale (EFTPOS). NETS is the EFTPOS scheme operator, processor and the acquirer of the service. The transactions settled via NETS EFTPOS are mainly higher volume lower value retail payment transactions. In September 2011, NETS EFTPOS was gazetted under Section 7 of the Payment Systems (Oversight) Act (PSOA) as a designated payment system given its widely accepted nature and potential impact on public confidence in payment systems and the financial system in Singapore.

The participants of the EFTPOS scheme are banks in Singapore. These participants are also issuers of the NETS EFTPOS pin-debit card.