One of the legs is charged inside CLS to reduce the net position of each settlement member in the two currencies concerned. The other „leg“ is charged outside of CLS. Each billing member has a unique multi-currency account within CLS. At the beginning and end of a normal billing day, each billing member has a zero balance on their account. When the settlement service is operating normally, CLS starts and ends the day with a zero balance on its central bank accounts and settlement member accounts. Settlement members can send instructions directly to CLS regarding their own FX operations and the FX operations of their third-party customers. CLS does this by operating a payment or payment settlement service (PVP) that reduces the risk of settlement of FX transactions of its settlement members and their (third parties) customers. We protect our customers from billing risks by simultaneously settling payment instructions for FX transactions with our unique payment-for-payment system. On an average day, we paid about $5.5 trillion in payment instructions on behalf of our customers. However, the financing required to settle this amount is set on a multilateral network basis (each member of the settlement only paying the net amount of its combined payment obligations in each currency, while adjusting the gross value of its instructions). On each settlement date, CLS pays on each settlement date, when it is determined that the accounts of reporting settlement members perform several risk management tests, each pair of payment instructions matching simultaneously, by performing the corresponding balances on the accounts of CLS settlement members. The counting of payment instructions and related payments is final and irrevocable.
The in/out swap reduces the payment obligation by an average of 75%, resulting in a need for CLS financing of less than 1% of the total gross billing value. Billing members are direct participants in CLSSettlement. Since then, they may be shareholders or non-shareholders or affiliates. The shareholders are shareholders of CLS Group Holdings AG, our parent company. Settlement members can submit payment instructions regarding their own FX transactions and those of their (third) customers. Third parties are the customers of settlement members who wish to conduct their currency transactions through CLSSettlement. Third parties include banks, a-bank financial institutions, multinationals and funds. Settlement members support all payment orders and financing on behalf of their third-party clients, as third parties do not have direct access to CLSSettlement. ClS was established in 2002 with 39 members and seven currencies. Since September 2017, CLS has paid 18 currencies, 79 shareholders, 66 reference members and more than 24,000 third-party customers. CLS operates a global multi-currency liquidity settlement system that definitively determines settlement risk by combining PvP settlement via CLS central bank accounts, local real-time gross settlement systems (RRAs) and multilateral payment networks supported by resilient infrastructure.
 CLS eliminates the main risk by using PVP – you only get paid if you pay.