Cat-18 · T218 · Cross-Border FX & Payments

PvP Settlement Synchronisation Model

Compare CLS, bilateral PvP, and sequential FX settlement across principal risk exposure, timing mismatch, netting efficiency, and operational complexity. Based on BIS PvP guidance (November 2022) and CPMI PvP progress report (July 2024). Client-side. Zero PII.

PvP · CLS Bilateral FX Settlement Risk Zero PII Client-Side
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Settlement Parameters
CLS eligibility varies by currency pair [1]
Single-leg notional for settlement risk calc
Total bilateral daily FX volume with counterparty
% of gross that nets to zero bilaterally (typical 60–85%) [2]
Conventional settlement cycle for the pair
PvP Design Memo
Regulatory & Reference Citations
  • BIS CPMI (Nov 2022) — Facilitating increased adoption of PvP FX settlement. Available at bis.org/cpmi/publ/d208.htm
  • CPMI Progress Report on Adoption of PvP FX Settlement (Jul 2024) — bis.org/cpmi/publ/d236.htm
  • CLS Group — CLS Settlement Service: 18 eligible currencies, settles ~$6.5T daily gross. clsgroup.com
  • FSB (2021) — FX Settlement Risk: Progress on the 2013 action plan. fsb.org
  • Basel III LCR/NSFR requirements introduce settlement risk within the LCR stress scenario (BCBS 238)