5.3 Processing a CLS deal

This topic describes the details to process a CLS deal.

• A Foreign exchange deal booked in front office will flow to Pre- settlement Manager that decides on the CLS instructions to be applied or not for the FX deal.
• The CLS instruction pick up will happen only if all the CLS eligibility checks are satisfied for the Branch, Customer, Currency, Cut off, Settlement Instructions and Product combination. else, the deal will get booked with Non – CLS instructions and becomes a gross settlement.
• For a successful CLS instructions mapped deal, a MT 304 (Confirmation Message/ Advice of a Third Party deal) swift message is generated automatically from the Pre- settlement Manager.
• Upon pick of CLS instructions details for a deal, at the FX Pre- Settlement Contract Input screen under additional Info tab the CLS eligible flag will be checked and contract gets STP’ed to Product Processor.
• CLS deals will not get routed to the Unconfirmed queue. The SGEN event (Settlement Message Generation) will be suppressed for CLS eligible deals. The Payment and Receive messages, the Debit and Credit advices will also be suppressed.
• The CLS deals will not form part of the ‘Netting Agreement’ and hence will be excluded from the FX netting process, both auto and manual.
• The accounting entries will be posted to the Control Accounts at the individual deal level. At the save of the contract the system will check whether the Settlement Accounts are ‘CLS Control Accounts’ (the Pay/Receive accounts maintained for the module ‘FS’).
• Settlement instructions with module ‘FS’ is picked up selectively for the amount tags ‘SETBOTAMT’ (Bought Settlement Amount) and ‘SETSOLDAMT’ (Sold Settlement Amount).
• During amendment, if a CLS deal becomes a non-CLS deal, the system will display an error message. Amendment of CLS deals will be allowed only if the CLS Status is ‘Matched’ or ‘Un-matched’.
• In the case of New, Amend and Reverse operations, the CLS Status will be updated as ‘Un-matched’.