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General TradingC
Continuous Linked Settlement (CLS)
Continuous Linked Settlement (CLS) is a settlement system operated by CLS Bank International that eliminates settlement risk in foreign exchange transactions by using a payment-versus-payment mechanism. It settles transactions in 18 major currencies simultaneously, ensuring both sides of a trade are exchanged at the same time.
Example
“The bank routed its EUR/USD trade through the CLS system, ensuring that both the euro and dollar legs settled simultaneously and eliminating the risk of one party defaulting.”