CLS - Continuous Linked Settlement

The CLS system, which was established in 2002 by a group of major foreign banks to reduce the risk in settling foreign currency transactions, operates as an international clearing house for foreign currency conversions. The operations performed in the CLS system are similar to those of RTGS system, but instead of settlement activity in one currency, the CLS system carries out settlement and conversion activities from currency to currency simultaneously. The CLS system provides settlement services for 17 currencies, and all the central banks in those countries are connected to it directly through their RTGS. The CLS system settles more than 50 percent of all foreign currency conversion transactions worldwide.

In May 2008 the shekel joined the CLS system. The inclusion of shekel in the settlement by the CLS completed the important part in the implementation of the reform in the payment and settlement systems in Israel.

The addition of the Israeli currency to the international system has significantly reduced the conversion risks involved in the activity between Israeli businesses and those abroad, reinforcing their stability. The inclusion of the shekel among leading world currencies currently handled by the CLS system greatly strengthens Israel's currency and makes it fully convertible, traded freely around the world.

Joining the CLS was impossible, unless the Zahav system - in which the payments in local currency are immediate and final - was launched in 2007.

The CLS system is owned by more than 70 financial institutions worldwide, and is supervised by the American Federal Reserve Bank, in conjunction with representatives from all countries whose currencies are traded in the CLS.