CLS is a systemically important financial market utility, whose mission is to mitigate settlement risk in the global FX market. During 2015 CLS has settled, on average, the equivalent of USD4.8 trillion per day on behalf of its 64 settlement members and 18,000 indirect participants.

The Magyar Nemzeti Bank (MNB), Hungary’s central bank, sought to enhance financial stability in the Hungarian market by making its currency, the HUF, eligible for CLS settlement. Hungary recognized that a partnership with CLS would reduce settlement risk among banks trading the HUF and would strengthen the overall stability of the Hungarian financial system. While adding a new currency to the platform is a major endeavour, involving extensive preparation and testing, the project was completed in less than two years as a result of close cooperation between the two parties.

David Puth, CEO of CLS, comments: “We are very pleased to welcome the Hungarian forint onto the CLS system. While already one of the world’s top 25 most active currencies, we believe that the forint is a currency with significant growth potential. From the outset of this process, it was very clear that there was appetite from both regulators and market participants to settle the forint through CLS. We look forward to continuing to work with the central bank and our existing clients to expand participation of both local and foreign institutions in the Hungarian market.

“The addition of another currency to CLS, combined with the continued growth in participation, is a positive endorsement of our model. We strongly believe settling a currency through CLS enables counterparties to gain significant benefits, including reduced settlement risk, greater cost control and access to a global network of trusted counterparties.”

Dr. György Matolcsy, Governor of MNB, comments: “We wholeheartedly welcome this successful collaboration with CLS. Approximately 90% of trading in the Hungarian forint takes place internationally, so it was important for us that it became eligible for CLS settlement. The CLS model provides a proven and trusted model for safe and efficient settlement of FX transactions and reducing settlement risk will reinforce the stability of our financial system and benefit the wider economy.”