Midas Kapiti International (MKI) has announced it is developing software that will add support for Continuous Linked Settlement (CLS) foreign exchange deals to its three banking back-office packages - Equation, Midas and OPICS.
CLS is a new foreign exchange settlement service designed to reduce risk by establishing a Payment-versus-Payment process on a real-time basis. An industry organisation, owned by 63 shareholder banks and registered as the CLS Bank, has been set up to provide the infrastructure necessary for the new system.
The service is set to go live around October this year and all member banks expect to be integrated by third quarter 2001. The first wave of member banks using the system will be settlement members, with accounts and direct connections at the CLS Bank. These settlement members will then sell their CLS services to other user members as well as third parties.
The implementation of CLS will have wide-ranging consequences on the foreign exchange market and will require companies that wish to benefit from reduced risk and increased liquidity to make sure their back office systems can cope with the new trading process laid down by the CLS Bank.
John Burton, MKI's strategic marketing manager, says the company has tailored its solution to meet the needs of third party banks wanting to benefit from CLS, as well as the member banks.
"The databases of Midas, Equation and OPICS will include all of the static data required to identify an eligible CLS deal, which can then be processed in real time to ensure compliance with the strict timescales imposed under CLS settlement," he says.
"This automation and the significant reduction in payment volumes that will be achieved by CLS should produce significant operational benefits for our users."
MKI joins the growing number of financial software vendors releasing stand-alone, modular or integrated solutions to cope with the new CLS infrastructure. Companies such as City Networks and Logica have also announced CLS functionality in their flagship financial products.
