5.1 Maintaining CLS preferences

This topic describes the overview of CLS Preferences.

Below are the mandatory maintenance required for enabling CLS instructions pick up and further settlement of same.

• Setting up CLS preferences for the branch.
• Allow customers to settle their deals via the CLS bank.
• Maintain currency restrictions for customers to participate in CLS trades.
• Maintain currency preferences for the branch exclusively for CLS.
• CLS bank holiday calendar maintenance.
• Identify the counterparties participating in CLS and the type of link with the CLS bank, whether direct or indirect. Specify the settlement instructions for CLS deals

Maintain CLS Preferences for the Branch

The CLS preferences for FX deals entered into a branch can be maintained at the Foreign Exchange Branch Parameter screen. User can display the ‘Foreign Exchange Branch Parameter’ screen by typing ‘FXDBRMNT’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

For more information refer to the FX User Manual, Chapter 7,Section 7.2.

Allow a Currency to Settle Inside CLS

When setting up currency details in the ‘Currency Definition’ screen, user can allow a currency to be CLS compliant by selecting the ‘CLS Currency’ option. FX deals in the CLS currency only will be eligible to be routed through the CLS bank. User can display the ‘Currency Definition’ screen by typing ‘CYDCDEFE’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.

For more information refer to the FX User Manual, Chapter 7,Section 7.2.

Identify the customer as a CLS Participant and maintain currency restrictions

At the time of maintaining, the Treasury Customer Additional details user can mark the customer as a ‘CLS Participant’. User can invoke the ‘Treasury Customer Additional details Maintenance’ screen by typing ‘STDTRCIF’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.User can capture currency restrictions only for customers who are CLS participants. A list of allowed or disallowed currencies for CLS trading can be maintained in the ‘CLS Currency Restriction’ screen. Click on the ‘CLS Restrictions’ button in the ‘Treasury Customer additional details Maintenance’ screen to invoke. Only if the customer is allowed to transact in a CLS currency, the particular deal will be eligible for CLS trading. However, user have to ensure that the branch at which the customer operates is also qualified to process CLS deals i.e. the branch should also be marked as a CLS Participant.

For more information refer to the Core Entities and Services User Manual.

Maintaining CLS currency preferences for the branch

User can maintain CLS preferences exclusively for currencies that are allowed to participate in CLS trading. You can use the ‘CLS Currency Details’ screen available in the Application Browser for defining the CLS preferences. You can invoke the ‘CLS Currency Maintenance’ screen by typing ‘FSDCLSCD’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button

For more information refer to the FX User Manual, Chapter 7,Section 7.2.

Maintain the Holidays for CLS Bank

User maintain a holiday calendar for the CLS Bank through the ‘CLS Holiday Calendar Maintenance’ screen. You can invoke the ‘CLS Holiday Calendar Maintenance’ screen by typing ‘FSDLCHOL’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button.At the time of booking a CLS deal, the system will use the CLS Bank holiday calendar to check if the value date of the contract falls on a holiday. If the value date falls on a holiday, the deal will not be saved as a CLS deal. The system will process it as a normal FX transaction

For more information refer to the FX User Manual, Chapter 7,Section 7.2.

Maintain the participant type for CLS customers

After identifying a customer to be a CLS participant, you have to specify the type of relationship the customers/financial institutions have with the CLS bank. This can be done through the ‘CLS Directory’ available in the Application Browser. You can invoke the ‘Continuous Linked Settlement Bank Directory Maintenance’ screen by typing ‘FSDBICDI’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button

For more information refer to the FX User Manual, Chapter 7,Section 7.2.

Treasury Settlement Instructions Maintenance for CLS deals

The settlement preferences for a customer can be maintained at the ‘Settlement Instructions Maintenance’ screen. User can invoke the ‘Settlement Instructions Maintenance’ screen by typing ISDTRINS’ in the field at the top right corner of the Application tool bar and clicking on the adjoining arrow button. The settlement instructions exclusively for CLS deals has to me maintained. For this, user has to select the module ‘FS’ which will indicate that the instructions are applicable to CLS deals alone.The debit and credit accounts maintained for the module ‘FS’ and ‘CLS Currency’ combination will be referred to as the ‘Control Accounts’ and will be debited/credited on liquidation of a CLS FX deal. Entries will be posted to the Control Accounts at the individual deal level. On receipt of pay-out/pay-in advice from the settlement member, you can pass a net entry to the Control Account and post the other leg to the Real CLS Nostro account.

For more information refer to the FX User Manual, Chapter 7,Section 7.2.