International Business Machines Corp. will use money transfer software from Fundtech Ltd. in the system it is building for CLS Services Ltd. of London.

CLS Services will use Fundtech's system to clear and settle U.S. dollar portions of foreign exchange payments.

CLS, which has the backing of the influential committee of investment and commercial banks originally known as the Group of 20, hired IBM to provide the technology for CLS Bank, a proposed settlement institution that would be based in New York.

Fundtech, an Israeli firm, competes against such firms as Transaction Systems Architects Inc. and Logica PLC.

Joseph Mazzetti, executive vice president at Fundtech, said CLS Bank will be operational by the end of next year. Six currencies will be traded initially.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.