Multinet International Bank, a proposed multilateral currency netting venture, said it has received a special-purpose charter from the New York State Banking Department.

"Multinet continues to move closer to making bank-based multilateral currency netting a global reality," said the venture's chairman, Garret Glass, a senior vice president at First Chicago NBD Corp.

Owned by eight North American financial institutions, including Chase Manhattan Corp. and First Chicago NBD, Multinet still needs Federal Reserve approval to access the central bank's Fed Wire electronic funds transfer system and its Treasury Book Entry System.

Multinet is designed to use multilateral netting to reduce foreign exchange settlement risks in the banking system. In multilateral netting, the credits and debits between trading parties in various countries are netted out, leaving just one balance to be settled.

If fully approved, Multinet will be the second clearing house for multicurrency trading. Last year, the London-based Exchange Clearing House, or Echo, became the first organization to begin providing live multilateral netting services.

"The regulators have to look very carefully at all aspects of" Multinet's application, Mr. Glass said.

"We think we will be multilaterally netting by the end of the year."

Multinet access to the Fed's payment systems hinges on several issues, particularly liquidity. The clearing house needs to show how its accounts will be established overseas, and how secured lines of credit are arranged.

In the interim, it has an arrangement with FX Net - a London-based netting service primarily used to settle contracts through bilateral agreements - through which it would clear currency contracts first processed through FX Net.

FX Net currently has the largest share of foreign exchange volume. Observers said the deal, struck in January, might pave the way for a merger between the two organizations.

The Federal Reserve Bank of New York declined to comment on Multinet's pending application.

In another example of the industry's heightened interest in such clearing services, the Group of Twenty, a group of international banks - including Chase and Citicorp - recently announced its goal of establishing a payment-versus-payment system for foreign exchange, called Continuous Link Settlement.

Payment-versus-payment is the simultaneous sending and receiving of both legs of a foreign exchange transaction.

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