CCIL has developed FX-CLEAR, a Forex Dealing System. FX-CLEAR will offer both Order Matching and Negotiation Modes for dealing. The FX-CLEAR will cover the inter-bank US Dollar-Indian Rupee (USD- INR) Spot and Swap transactions and transactions in major cross currencies (EUR/USD, USD/JPY, GBP/USD etc.) The USD-INR constitutes about 85% of the transactions of the total Forex transactions in India in terms of value.

• Reducing the cost of forex transactions in India by providing cost-efficient trading terminals. CCIL will provide the FX-CLEAR to the members free of charge where as similar available systems cost them Rs 50000/= to more than Rs 3 lakhs per month per terminal depending on the services they choose to have.

• Offering enhanced value added trading features to meet the real needs of market relating to forex transactions. Some of the features like market by price (best 5), market by order (best 5), market movements, orders with price, time and quantity conditions etc. which are available in Order Matching Mode of FX-CLEAR are not available in other existing Forex Dealing System in India.

• Enhancing the depth of the market through wider participation of banks. Currently, many banks have not availed the services of the existing Forex Dealing Systems because of the higher cost. As mentioned above, CCIL will provide the FX-CLEAR to its members free of cost, all banks in India will avail this service and thus CCIL would help in enhancing the depth of the forex market in India through participation of more banks.

CCIL will provide STP (Straight Through processing) for all trades in USD-INR done on FX-CLEAR . All deals concluded in USD-INR currency pair on CCIL's dealing platform will be taken up for settlement by CCIL's forex clearing and settlement system. This will include deals on both the Order Matching Mode as well as the Negotiation mode.

Reducing the counter-party and default risk by ensuring suitable settlement mechanism. The predominant risk is settlement risk which is the risk that settlement does not take place as expected. Settlement risk comprises both credit and market risks. The risk management system of CCIL for forex clearing and settlement system includes tools for managing credit risk by way of membership norms and member-wise Net Debit Caps (NDC) besides a loss allocation procedure and tools for managing market risks such through collateralised lines of credit, operation of a settlement guarantee fund etc.

By using the CCIL's FX-CLEAR, the Members will have the advantages of CCIL's institutional structure and standing, the Straight-Through Processing (STP) facility, cost efficient Forex Dealing, automatic Price discovery in addition to other qualitative benefits.

The order matching mode will be a neutral, anonymous and truly order driven dealing platform. It will work on the principle of 'full price discovery'. In this mode, orders (Bid and Offer) with valid inputs will be accepted for dealing and the system will endeavour to match these with the counter-orders available in the order book, based on price and time priority. The counter-party's identity will not be disclosed to either party until the matching has resulted in a trade. Initially, CCIL provides this mode for USD-INR currency pair. Subsequently other currency pairs may be made available in this mode.

In this mode, a dealer will be able to converse through exchange of messages electronically with dealers of all other members for the purpose of arriving at a negotiated deal in the forex market. The Deals negotiated will be captured as confirmed trades once acknowledged by both the parties. This mode will be available for other major currency pairs besides USD - INR.

The membership of the FX-CLEAR Segment will be initially extended to the Forex Clearing segment members of CCIL at no additional cost. CCIL will provide STP (Straight Through processing) for all trades in USD-INR done on CCIL forex dealing platform. All deals concluded in USD-INR currency pair on CCIL's dealing platform will be taken up for settlement by CCIL's forex clearing segment. This will include deals on both the Order Matching Mode as well as the Negotiation mode. The facility to integrate the Forex Dealing System with member's front-office/back office system is also available by providing them downloadable CSV files. The Forex Dealing System of CCIL will use the INFINET network.