The bank that operates the global CLS foreign-exchange settlement system is CLS Bank.
More precisely, the operating institution is CLS Bank International, part of the CLS Group. It provides CLSSettlement, a specialized infrastructure for settling foreign-exchange transactions. The service was created to reduce the danger that a participant pays the currency it sold but fails to receive the currency it bought.
CLS uses payment versus payment, or PvP, settlement. The two currency legs are linked so that one payment is completed only when the corresponding payment can also be settled. This approach addresses the timing and counterparty problems highlighted by the 1974 collapse of Bankhaus Herstatt.
The bank is a limited-purpose institution regulated by the U.S. Federal Reserve and maintains central-bank accounts for eligible currencies. CLSSettlement covers 18 major currencies and processes transactions submitted by settlement members, with other financial institutions and companies able to participate indirectly through members. A common mix-up is to answer “CLS Group,” the corporate parent, when the question specifically asks for the bank operating the settlement service: that entity is CLS Bank International.